"The t side [of the information-technology equation] is all about deflation and commoditization," Firestone said. "So we need to move to IT with a big i and little t."

Firestone delivered the keynote speech at IT industry association CompTIA's annual Breakaway conference, taking place in Las Vegas until Friday. More than 850 representatives from manufacturers, distributors and VARs are gathered here to share know-how and discuss industry trends.

Even though IT companies have taken great pains to cut their costs by eliminating waste and outsourcing, margin pressures remain as intense as ever. For the channel, that means paying more attention then ever to adding value and wrapping services around technology.

"Competition keeps getting tougher, customers keep getting more demanding, and the penalty for indecision has gone through the roof," Firestone said.

Firestone cited a recent Gartner Group report saying that the number of IT suppliers, distributors and resellers will dwindle in the next five years. He said Gartner predicted that 30 percent of today's channel companies, primarily VARs, no longer will exist, he said.

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To remain viable, VARs must deliver services around technologies such as voice over IP, security and what Firestone called "smarter document management."

For Xerox Corp., which does business with about 10,000 resellers in North America, the latter is especially important. Firestone said he believes that helping customers implement smarter document management strategies provides a sustainable competitive edge to resellers.

"Companies that focus on how documents and information are managed are better equipped to reduce costs, respond to changing market conditions and increase profits," he said.

In an interview with The Channel Insider, after his speech, Firestone said Xerox is making a big push through the channel into the small and midsize business space.

Xerox traditionally has had deeper penetration in larger companies, but the company wants to increase its SMB share with the help of VARs and a set of lower-cost products developed specifically for smaller companies, he said.

To penetrate that market, Xerox is putting a lot of effort into training and investing in channel partners, who are best equipped to deliver help meet the business needs of small companies, he said.

"The channel is about adding value, and our product line is mostly about adding value," Firestone said.

To help VARs add value, Xerox Wednesday launched an analytical tool resellers can use to determine the direct and indirect costs associated with document output.

The tool, called XOPA (Xerox Office Productivity Advisor), gives resellers an opportunity to tackle inefficient document processes at small and midsize companies. Xerox partners can use the tool, which uses modeling algorithms to expose the true costs of printing and copying, to prepare productivity-boosting recommendations.

Chris McPherson, a solutions consultant at Landmark Systems of Madison Heights, Mich., said his company already is using XOPA. In one instance, he showed a customer how to save 22 percent in the office environment. With the savings, the customer decided to buy another multifunction copier/printer.

McPherson said he plans to use the tool extensively now. "Every time I'm approaching a customer now I'm at least telling them about it," he said.

Firestone used the Landmark example in his speech to illustrate how VARs can deliver value with XOPA.

"That's a great example of meeting the part of every customer need that begins with the question, 'Here's our savings target. Can you hit it?' The right answer required a services-led approach in addition to new technology," he said.

During the keynote, Firestone also addressed the importance of partnering, not only between VARs but also in the context of Xerox's channel strategy. He pointed out that as head of Xerox North America he heads a group responsible for direct and channel sales, placing distributor and reseller operations at the same level as the company's direct sales.

"Partnering is not just an enabler of our strategies, it is our strategy," he said. "We are increasing partnerships and incentives, expanding channel products and services. We'll never eliminate conflict, but we can make better decisions on how to serve customers and make it easier to do business with Xerox."

Xerox is trying to stem any potential conflicts by defining precisely which products and customer sets, such as SMB, are to be targeted through the channel, Firestone told The Channel Insider.

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