Cloud and tablets re-writing IT business model

"The business IT sector is rapidly moving towards tablet computers and hosted applications," explains Smith, whose company supplies IT support to around 1,000 SME's nationwide. "The old business model of selling hardware is rapidly disappearing... The sector is now seeing a shift towards other value added services and advice-led support, as opposed to product sales," he continues. "Hence the declining margin and demand that manufacturers are seeing is filtering through the business and supply chain." Hewlett-Packard says that the 8% cut in its workforce will improve the balance sheet by $3.5bn (£2.2bn) per year. HP reported a 31% fall in profits in the second quarter, to $1.6bn at the same time as the news of the job losses. A company spokesman said that all HP sites would be affected. HP employs over 20,000 people in the UK. "At Prism we have been working for some time to improve our support of mobile devices and develop security and delivery of cloud based applications," says Smith.