When Russell Peacock surveys his new domain as chief of Xerox North America,
he sees a brand that has high recognition and appeal in the market, but only 40
percent coverage of IT decision makers and 18 percent market share.
His goal: Drive that coverage to 50 percent of decision makers and 20
percent market share ownership by 2013. And what’s going to get him there are
services and channel partners. The end goal is making Xerox’s market position
as dominant as its brand recognition.
In an interview with Channel Insider, Peacock waxed about the enormous
opportunity Xerox has in services that range from business process automation
to managed print services for small businesses. “We’re proud of the fact that
we can offer a solution to all customers in all segments. It can be one printer
for an SMB customer to a multibillion-dollar custom deal,” he said.
Indeed, this isn’t our father’s Xerox. In February, Xerox closed its $6.4
billion acquisition of Affiliated Computer Services—an outsourcing and
integration firm that competed directly with the likes of HP Services (EDS)
and IBM Global Services. While Xerox plans
to operate ACS as a wholly separate entity,
the inclusion of the new company’s revenues catapulted Xerox’s top line from
$15.2 billion to $22.7 billion.
But the Xerox-ACS deal isn’t Xerox’s
first foray into services. It’s long operated its Xerox Services division,
which provided professional consulting and integration work for large
enterprises. And in 2007, it bought Global Imaging Systems, a leading reseller
of document management technologies, which continues to expand its SMB and
small enterprise document management and print services businesses. And Xerox
is stepping up efforts to expand its managed print services through its
existing Page Pack 3.0 program.
It’s that arsenal of firepower that’s got Peacock fired up. The document
management market, which includes printers, is roughly $120 billion with a mere
$20 billion going toward print managed services. The business process
outsourcing market, which ACS and Xerox
Services plays, is worth upward of $500 billion globally. The potential rewards
for upward shift in either of these segments are huge.
The new weapon in Peacock’s arsenal is Xerox Print Services, a program
that’s under way in Europe and going through the beta
testing in the United States.
XPS is a middle ground for managed print services, designed specifically for
small enterprises. Where Xerox Global Services has large robust MPS
offerings and Page Pack is designed for SMBs serviced by the channel, XPS—he
says—is right-sized for small enterprises that want the benefits of managed
print without the features demanded by their larger counterparts.
In total, Peacock expects to grow Xerox’s managed print services by 50
percent in 2010, and partners—VARs and MSPs—play heavily in that growth
strategy. Partners investing in managed print services—either through XPS or
Page Pack—will find competitive advantages with existing and new customers.
“It’s getting harder to differentiate based on hardware alone and services is the wrapper that does that,” Peacock says.
Xerox’s 12,000 authorized resellers and partners are critical to the success
of Xerox’s vision and Peacock’s goals. But Peacock doesn’t shy away from the
fact that success only comes with investment, and he says the rewards will go
to partners that make the necessary investments in Xerox and its offerings.
“If someone is already carrying our brand, we don’t want to say carry on as
usual. We need to listen to the partner and customers, and figure out where the
market is going. From there, we should reward the partners for making the
investments with us,” Peacock says.
The cautionary note from this interview comes from Peacock’s reflection on
Xerox’s market coverage plan and what it’s willing to do to expand share.
Xerox’s acquisition of Global Imaging Systems and the eight subsequent
acquisitions made by GIS since 2007 show
that Xerox is willing to buy into geographic regions where it has weak coverage
and penetration. He cites the example of Global Imaging’s 2009 acquisition of
Comdoc, a large Ricoh reseller, to gain access to 14,000 customers in four key
states—Ohio, Pennsylvania,
New York and West
Virginia.
While being bought out may come as good news for some VARs, it also shows
Xerox’s willingness to take some deals and markets direct to gain the best and
highest penetration and market share. Peacock says it’s not adversarial to the
channel, but rather contingent upon local market dynamics. His underlying goal
is making Xerox—and its extended ecosystem of subsidiaries and channel partners—fiscally
healthy and growing.
“I’m excited about the opportunities,” Peacock says. “We’re in a unique
position. We have a crisis of opportunity, and if we do it right, we can return
Xerox to market dominance.”
LAWRENCE M. WALSH is
a vice president and market expert specializing in security and channels at
Ziff Davis Enterprise. His blog, Secure Channel, follows security
technologies, vendors and trends in the channel. You can reach him at lawrence.walsh@ziffdavisenterprise.com;
and follow him on Facebook
and Twitter.