For a long time, there were basically two faces of Xerox. The first was as a provider of printers and copiers that relied on a modest channel to help compete with rivals such as Hewlett-Packard. The second is a far more lucrative business that helps construct and manage the workflow involving the documents that eventually become output on a Xerox device.
Recognizing that printers and other devices become a whole lot stickier inside a customer account when they are embedded within those workflows, Xerox is now teaching its channel partners how to deliver those higher-value services themselves.
The company intends to drive two-thirds of its technology business revenue through partners by 2017, with a significant percentage of that revenue coming from partners that are delivering higher-margin workflow automation services enabled by Xerox, said John Corley, president of channel partner operations for Xerox.
Although there’s nothing wrong with being a traditional reseller or even a provider of managed print services, staying profitable is a major challenge. Competition across those categories is nothing less than fierce. As a result, solution providers that either resell hardware or just deliver a single type of low-margin managed service clearly need to find other ways to add value.
While printers may not be the first things to come to mind to start that journey, Corley said it turns out that when you add up all the money spent on printing and workflow services, it’s roughly a $40 billion market.
To make that shift simpler, Xerox is now providing partners with access to Xerox App Studio, a tool through which they can start becoming more familiar with developing more sophisticated workflow automation applications along with APIs that make the company’s output devices more programmable.
Xerox views this effort as not only a mechanism to drive more sales of printers and copiers, but also its own services. The assumption is that as more partners move into the workflow-automation space, they will be in a better position to pull higher-margin Xerox services along with them.
The degree to which that will occur will, naturally, remain to be seen. But given all the difficulties classic resellers and managed service providers (MSPs) are having maintaining profitability within their existing business models, the time has come for many of them to start having a much different conversation with their customers about adding value at a time when output devices, such as printers, are now pretty much taken for granted.
Michael Vizard has been covering IT issues in the enterprise for more than 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.