Last week, HP announced a range of new products targeted at the SME. Among the new products was a white label application hosting solution. That solution is targeted at Microsoft Exchange, SharePoint and CRM products and the company chosen to provide the solution is UK solution provider, Cobweb.

When HP announced the deal with Cobweb, it started off by implying that it would be running the solution on its hardware. Cobweb's role was to take its existing hosted solutions around Microsoft business products and create a white label bundle that HP would sell through its Value Added Reseller (VAR) channel.

However, under questioning, HP admitted that all it was doing was supplying hardware to Cobweb and not using its own datacentres to run the service. It was also unable to answer any questions about how terms and conditions would be set and how issues such as eDiscovery and data protection would be done.

These are fairly serious questions as they will affect any customer who buys into the service. For example, who provides the support? In the deal between HP and Cast Iron Systems for Cloud services in the USA, Cast Iron agreed to create a bespoke help desk. HP has not made that same arrangement with Cobweb in the UK. This means that customers will be worried that they could find themselves being pinged back and forth between their HP VAR and Cobweb in case of a service outage.

Another concern for customers will be security of their data. Microsoft has recently attracted severe criticism for failing to ensure that any EU users of its Business Productivity Online solution would have their data kept in Europe. Even after it told journalists that the data would only move between Dublin and Amsterdam, it then issued an updated document contradicting that. The document can be found here and the problem is the statement on page 20. As the HP VAR has no direct control over the data it cannot give legally binding assurances over where the data is stored.

A third concern is that of eDiscovery. Companies are increasingly having to deal with legal requests about email. If the HP VAR has no direct control over the data it cannot provide an eDiscovery search. More importantly, if a customer needs to remove references to an individual from their records pursuant to a Data Protection request, the HP VAR cannot provide a destruction certificate.

Cobweb
Given all the issues above, it seems that providing a white label service is fraught with difficulty and that raises the question of why anyone would get involved with this type of delivery. According to Mark Adams, MD, Cobweb, "we have been around for a while. I joined in 2004 when the company was focused on an indirect channel play. Since then we've moved to be a direct channel player."

Adams continued "as part of the direct channel move we have gained ISO 9001, ISO 14001 and ISO 27001 accreditation. This means that business process and security is in the forefront of what we do and has attracted customers from all over the world including Asia and the USA."

Business model
The current Cobweb business model for the channel is "straightforward and simple" says Adams. "The customer is referred to Cobweb by a third party to whom we pay an introduction fee. From that point on, they become a direct customer."

But the HP deal is not structured as an introduction service. It will be sold directly to end users by the HP VARs. "In our white label model the third party doing the reselling will do their own marketing around a solution branded to them" Adams said. "There are some that like to have a joint branding and take advantage of our reputation but that choice is theirs."