Wednesday, May 2, 2012

Why We Can't Let Xerox Go

If you've been in the industry for over a year, you know how much the ecosystem changes.  You also know that rumors of business deals churn faster than your 36 month ex-dates.

Especially when it comes to which OEM is buying who, what dealership is consolidating and who is getting sued by Canon/HP.

We have a small but rather colorful niche which is likely to get a bit smaller.

Not 'doom and gloom', it just is.

I keep my eyes out for new and interesting tidbits of information, getting a feel for trends - nothing statistically supported, no study groups or polling numbers.  I pay attention to how often a company or person pops up on my 'radar'.

Over the last 60 days its been Xerox - more specifically, Ursula Burns.

Videos and quotes have been flowing into my view so often and I decided to listen in on the Xerox earnings call.  Very interesting.

These calls pretty much go without incident - one typically needs to listen deeply, digging out encoded tidbits of insight.  It is quite typical not to hear any mention of competitors and report the landscape in extreme generalities.

That's why one statement made me do a double take:

Ursula Burns, Xerox Corporation, Chairman and CEO, responding to a question posed by Bill Shope - Goldman Sachs, Analyst on the competitive landscape, 2012, Q1 earnings call:

"...Yes, I think that I would speak about two companies outside of the other group. 


So the other group is Canon, Ricoh, KM. You know, the normal technology people, technology hardware providers, and they are still infants in document outsourcing.


They are really not large players. They are trying to get together solutions and offer them, but we really don't compete actively against them..."


WOW - bit of the old smack-down, eh?

Now listen, I have never worked for Xerox, seems they are the only OEM I don't have intimate experiences with, and it is true that I write for the Business Transformation Center  which is Xerox sponsored, but up until 12 months ago, I considered Xerox a competitor.

Twenty-four months ago, I evaluated PagePack. Ten months ago, I was looking at PagePack 3.0. and just 8 months back I evaluated the ColorCube. Xerox hardware and program are impressive, any way you shape it.

Over the past 60 days I have come to know the story of Ursula Burns - out of the projects and up through the ranks.  I like that.

At Less than 9 bucks, XRX is a steal.

Merger talk and take-over rumors are part and parcel of the imaging industry - from Ikon to Danka, Ricoh to Global, everyone on the outside recognizes the incestuousness atmosphere while we inside shrug our shoulders and say, "what?"

The swirling chatter today is that the X is prime for a take-over and Dell or HP are would-be suitors.

Personally, I don't think HP is a strategic position to take on anyone.  And I don't think they are all that gun-ho on continuing down the toner-based path.

So what about Dell?

With Xerox deriving over 50% of its revenue from services, Dell might fare well acquiring all those inroads to global IT entities; spin-off the Global arm, converting it into cash.  Again, I doubt Dell wants to get into the copier/printer world, wax-based or otherwise.

I know what you're thinking - who else would take Xerox?  Look west...far west...Seoul.

Samsung may want a channel where they have none now.  Samsung might like the idea of instant invite into the best of the Fortune 500.

Nawwwww...it'll never happen...still...

Detroit hasn't been the Automobile capital of the World for decades.  GM is owned by Canada and Chrysler has been sold off to an Italian automaker.  Boeing has to compete on the world stage no longer holding dominance.  And HP is in the middle of sending her once cash-cow, out to pasture.

What happened to all the American companies?

Well, in the End, money is money - generated by clicks, seats or acquisitions - it makes the world go 'round.





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