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Monday, September 28, 2009

The Big are getting Bigger: Xerox 's Largest Acqusition Ever, Affiliated Computer Services: Who?

"We don’t see the world going paperless." Burns on CNBC.

Xerox announced, today, it will purchase Affiliated Computer Services creating a $22 billion global enterprise for document technology and business process management.

The deal is initially valued at $6.4 billion.

Affiliated Computer Services is what's called a "BPO" or "Business Process Outsourcing" provider.

ACS Started in 1988 as a provider to the banking industry. Today, ACS is 23rd on the VAR 500 and boasts recurring revenue of around $5 billion and 74,000 world-wide employees.

"Our recurring revenue model has allowed us to generate healthy growth. The growth potential with this deal will generate solid returns and provide employees the opportunities to expand their expertise," said Lynn Blodgett, president and CEO of ACS.

Indeed, Ursula stressed this new business group will bring "a significant boost to our profitable annuity stream".

The revenue Xerox generates from services will triple from $3.5 billion in 2008 to an estimated $10 billion in 2010.

ACS has nothing to do with copiers, printers, and output devices - it's all process outsourcing and resides in the
the realm of EDS and Perot Systems.

Xerox is moving from the Third stage, Enhancing the Business Process into the Fourth stage of MPS, Managing the entire Ecosystem.

Also, ACS has the largest position in MediCaid and health care field.

So now the field is complete - HP/EDS, DELL/Perot, Xerox/ACS and Ricoh/IBM.

There is a very good interview from CNBC, here. Check it out.


  1. It has been over a year since I commented on the analogous relationship between football and the copier sales cycle. In this spirit, I must give UM credit for continuing to focus on it's "core business", leading the Big Ten in rushing yards despite being the "spread offense" darling of the Midwest. While "wildcat" schemes like MPS and the BOS (Back Office that one!) continue to gain favor on the field of play, I stand by the tried and true concept of handing the ball off to a capable back, behind a strong, quick and disciplined offensive line, and gaining good yardage. Use UM football as a benchmark and understand that while "the spread" is a good way to be offensively diversified, your core business will always be "taking the ball and running with it".

  2. Docu -

    That is a very good analogy. It comes down to blocking and tackling...

    My biggest warning is not to treat MPS as a marketing technique - the old model is more like running Option or Wishbone -

    I know Michigan hasn't made their Q-Back run the line of scrimmage in a few decades but does 'Bama still run a Whishbone?

    Thanks for the comment keep coming back -!


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