Hewlett-Packard Enterprise Financial Services (HPEFS) recently announced a "Force for Good Financing Program" that offers favorable financing incentives for new, qualified SMB and enterprise customers that have demonstrated a measured sustainability commitment. The program aims to address increasing technology and digital transformation costs for companies while supporting successful sustainability efforts. Eligible businesses must have an ESG score within a pre-determined range as determined by Dun & Bradstreet ESG Intelligence’s ESG Rankings, among other factors.
Force for Good offers reduced payments up to 5% on qualifying transactions between $50,000 and $1,000,000 (USD). HPE will provide pack-and-ship services for users and automatically generate an HPE Circular Economy Report at the end of the term. The promotion goes through the end of October 2023 for eligible solutions, including HP Business desktops and laptops, select servers and other HPE data center solutions, including storage and Aruba networking gear.
As part of the program, HPE also announced global onsite decommissioning services for HPE Asset Upcycling customers, as well as the expansion of the HPE certified pre-owned portfolio to include its Nimble Gen 5 Storage.
The circular economy defined
The circular economy is an economic model that aims to keep resources in use for as long as possible by reducing waste and regenerating natural systems. Also sometimes called CE or simply “circularity,” it is a production and consumption model that prioritizes sharing, leasing, reusing, repairing, refurbishing and recycling materials and products to extend their lifetimes as much as possible.
In a 2020 research paper commissioned by HPE, Moor Insights & Strategy CEO and chief analyst Patrick Moorhead wrote about digital transformation and the circular economy. One focus of the paper was the cost savings associated with extending a product's life. If you want to know more about this topic, check out that paper or Moorhead’s follow-on post titled "Leveraging The Circular Economy For Potential IT Cost Savings". Considering how the tech industry's imperative to reduce its collective carbon footprint, the focus on environmental sustainability now weighs just as heavily as cost savings. Yet a structured emphasis on ESG also demands a tremendous amount of resources and effort from a company—a burden that HPE seeks to reduce with its Force for Good program.
"The circular economy has always made sense from a business standpoint when we consider the cost savings and reduction in waste that it creates," Moorhead said about HPE’s announcement. "With environmental concerns weighing more heavily within the tech industry, asset management and purpose-driven financing will help companies maintain their ESG focus while materially impacting their bottom line. Through this initiative, HPE is helping its customers do the right thing for their businesses and for the environment."
Cost-savings for sustainability must be an industry-wide effort
ESG initiatives can create a haves versus have-nots situation among corporations. After all, the wealthiest companies in the world help set the criteria for sustainability. (Consider Amazon’s Climate Pledge, for example.) As companies look to cut costs in an uncertain economic environment, many of them could fall behind as they face more stringent environmental regulations while also grappling with inflationary price pressures. The hard reality is that companies must sometimes choose between sustainability efforts and the creation of shareholder value.
With this program, HPE demonstrates that it understands that not all companies can achieve both objectives alone. Among other benefits, it should help some smaller companies provide more transparency into the end-to-end lifecycle of their IT hardware. With HPE offering complete product lifecycle management, these companies stand to save money upfront as well as lessen the burdens of end-of-life management.
A different kind of SaaS for CIOs who are increasingly ESG-focused
HPEFS's offering is unique because the Force for Good program targets companies that are already recognized for their environmental stewardship. Essentially, HPE is helping them embrace a sustainability-as-a-service model—reducing consumption through a managed-asset program that allows the customers to use only what they need and to pay as they go.
In Lenovo's 2023 Global Study of CIOs, nine out of ten CIOs reported that their jobs now bleed into non-traditional areas beyond technology. And 45% of them have been given explicit ESG roles and responsibilities. Tying technology and corporate sustainability together makes sense, considering that IT uses tremendous amounts of energy, and companies must make an organizationally aligned effort to reduce their carbon footprint.
Ironically, Lenovo itself doesn't specifically market its own everything-as-a-service (XaaS) offering, TruScale, as an environmentally sustainable solution, even though the company consistently shows a strong and measured commitment to environmental progress. TruScale is another scalable, pay-as-you-go model that provides infrastructure flexibility without upfront capital expenditure. The ancillary ecological impact is not insignificant, but Lenovo hasn’t emphasized that in its solution messaging as much as HPE has.
On the other hand, Cisco Green Pay is marketed (as the name suggests) as a "green" solution heavily focused on the circular economy. Cisco Capital launched Cisco Green Pay in April 2022 in select countries across Europe and the Middle East, and recently expanded the program to the U.S. and parts of Asia. Cisco Green Pay offers a 5% incentive (equivalent to HPE’s “up to” discount), predictable payments and a circular economy certification at the end of the deal term. This helps customers build a sustainable IT strategy that solves their environmental goals. Green Pay is available to all sizes of customers and does not require any pre-existing level of sustainability efforts. The initiative is part of Cisco's commitment to 100% product return and supports Cisco's goal to be net zero on Scope 1, 2 and 3 emissions by 2040.
Compounding sustainability efforts in a win-win scenario
Sustainable asset management and financing solutions nicely address companies’ business goals of financing and selling products. The infrastructure providers and OEMs who offer creative, sustainable programs in these areas bolster their and others' ESG and circular economy efforts. While IT decision makers will always optimize for their companies' technology needs, sustainability is increasingly coming into play. Companies must answer to increasingly strict regulations around environmental impact; beyond that, end users will are increasingly making product decisions based on a company's ESG initiatives, which ultimately affects profits as well.
Like many of their peers, HPE, Cisco and Lenovo have created proven sustainability programs. The standout difference is that HPE's offering rewards companies that are further along with their green initiatives. This is a good move as it helps organizations dedicated to sustainability that might otherwise struggle to keep up with the rising costs of IT equipment and carbon reduction.
For now, HPE is frontloading the promotion with a limited-time offer; I suspect that, if the program is a success, HPE will continue it. Cisco is also likely to push other companies along a similar path with a competitive offering. Ultimately, I would love to see the first “S” in SaaS mean more than “software.” Companies are just beginning to address a massive opportunity for sustainability-as-a-service, and I’m here for it.