HP Risks Losing Customers’ Trust

When a firm as big as HP needs to issue a clarification about a new policy because of customer outrage, you can assume that at least some of the anger was caused by a lack of consideration somewhere in the process. After all, big companies don’t become big by infuriating their customers and HP is among the biggest.

What happened with the ProLiant firmware debacle is a series of poorly thought out events on the part of HP vice president Mary McCoy who is in charge of supporting the company’s server products.

It’s easy to follow the missteps. First, the company issued a new policy on support without warning and long-time customers used to receiving certain types of free updates, suddenly weren’t eligibile.

Unfair policy

To make matters worse, the announcement took place only a few days before it took effect, leaving HP customers with no time to make adjustments. On top of that, the blog entry that McCoy used to make the announcement was poorly worded, and made statements there simply weren’t true. If you parse the blog entry, it looks like something written by a politician who is raising your taxes while claiming that they’re being lowered.

Making matters worse was a clarification that was long on excuses, and short on actual information. Basically, what McCoy said is that customers were going to have to pay for support that had previously been free, and if they don’t like it, too bad. And oh, by the way, those new charges start this week, long before you have time to consider them in your IT budget.

Much of the reason is because HP customers had assumed that support for things like firmware upgrades would continue to be free because they always had been free. To some customers it was a significant reason for choosing HP over IBM. For others it’s a change of policy for support of an asset that they purchased with different assumptions. Either way, it smacks of unfairness.

Poor form

This is not to suggest that HP shouldn’t require a support agreement of some kind for things like firmware enhancements. There are good reasons why it’s actually a good idea. But customers are outraged not so much because it costs money, but because of the way it was handled.

Perhaps a better way would have been to change the warranty language on all new HP ProLiant servers to reflect the new policy, and then make sure that the changes were highlighted. That way customer may not love the new costs, but they won’t feel that HP is pulling a fast one.

While taking a long term approach may not start bringing in the bucks for McCoy immediately, it will eventually have the same end, but without alienating customers. Likewise, providing some warning in advance that there would be new support requirements, tied to a date that makes budgeting sense, would also have been much more fair to customers.

Had the charge been announced in February 2014, as it was, but timed to take effect at an obvious budget start date such as October 1 or January 1, 2015, it would have been far more palatable.

Minimal impact

In reality, the actual impact on most businesses is probably minimal. I’ve owned HP servers for decades, and by the time a server is out of its normal support time, firmware updates that aren’t tied to safety or security requirements are rare to the point of being non-existent.

As an example, I own two HP ProLiant ML310 servers. One is an ancient G2 machine for which there have been no meaningful updates for years. Even the drive controller, which can’t recognise more than 130 GB hard drives hasn’t been updated. There’s no need to have to worry about the cost of firmware updates, because there haven’t been any for years.

My other server is a fairly new ML 310 Gen 8, which is still under warranty. I can get any firmware update for free until the warranty runs out. When that happens the new support agreement will cost about $70 (£42) per year, and it covers a lot more than just firmware updates.

Lack of trust

As a small business owner, I can afford that. Larger businesses with more servers will be able to negotiate much lower support rates on a per-server basis than I can. So we’re not talking about a huge expense for most companies.

But this isn’t really about the cost. This is about McCoy’s seeming lack of concern for her customers and about changing a practice that’s been in place for years without warning and with no notice. In a sense, McCoy has broken the trust of HP’s customers, which means that she’s told those customers that she doesn’t really care how this affects them. In their view, all she sees is a desire for more money.

Speaking again as a business owner, I would do anything to avoid breaking the trust of my customers, even if it cost me a little money. In the long run, all you really have is trust.

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Originally published on eWeek.