The approach tends to work best with start-up Internet companies, which typically have little capital and less ongoing revenue. Ordinarily, dot-coms are a bad bet for traditional leasing arrangements. Sensing opportunity, H-P has stepped in to offer attractive terms to selected startups, using unconventional ways of minimizing risk. By laying off the risk, H-P gets a big potential upside, and entrepreneurs get to keep control of their companies. That's a far cry from the traditional model of fixed amounts paid at regular intervals for a fixed period.
Revenue sharing is also an option here.
ViaLink's Web-based Item Catalog connects food retailers with suppliers to exchange product, price, and promotion information. In early 1999, H-P gave viaLink the servers it needed to power the Item Catalog application, and continues to provide consulting and outsourcing services. H-P arrived at its new leasing strategy after a series of failed sales calls to fledgling Internet companies. We saw this pattern emerging that you can't approach the Internet with old assumptions about how business is done. That's not to say that H-P is being reckless with its new approach.