Xerox Seeks To Reassure Investors - And Channel Partners - Amid Restructuring
By Chad Berndtson, ChannelWeb
3:52 PM EST Mon. Nov. 24, 2008
The article is a great read, I recommend it.
Here is a summary of the interview, with commentary:
Mulcahy regarding Xerox VARs
"We've seen some pressure [on VARs] trying to keep inventories strong and managing cash -- they're worried about their customers the same as everyone else. But overall, we've seen a good robustness in terms of equipment sales."
The Xerox VARs are still holding firm. - GW
On conflict over the Global deal:
"We have been surprised and delighted that it has not been the case to the degree we thought it might be at the beginning," Peacock said when asked about overlap between Xerox's reseller channel and the Global Imaging Systems side. "We've tried to [reassure] that in this situation, one plus one plus one needs to equal four. This is all about getting Xerox in front of more buying decisions and making sure the customer can get in front of Xerox."
- Understood. - GW
On Xerox reducing R&D resources from 5 percent in 2008 to 4 percent in 2007, and if that meant the company was "giving up on innovation:"
"Absolutely not," she said. "That includes almost nothing upstream in research. If anything, it's the next stage of productivity. We believe we're not sacrificing anything but capturing efficiencies due to the maturity of the business."
- In one of my older posts (The Death of Xerography) I talked about Xerox eliminating R&D in photocopiers. Xerox does not commit any dollars to the future of photocopiers and as Mulcahy states , they are reducing resources to general R&D by one point.
It seems the "propeller-heads", no offense, of PARC are concentrating on Nano-Spring Arrays - and Magic Paper not the ball-mouse. - GW
On Xerox's green strategy:
"[Customers] care. We are literally being asked to present the impact on carbon footprints," Mulcahy said. "There's an environmental impact and also happens to have a great impact in terms of reduction of waste."
Maybe Xerox should refer all those asking about "carbon footprints" over to the HP site. I doubt it. - GW
On cancellations:
"We're seeing nothing materially different. We do think there's a higher hurdle rate for decisions -- more due diligence, the explicitness of ROI. But we've been seeing that for a while, that's nothing new," she said.
Sounds like "cancellations" refers to customers canceling orders or engagements. I like the phrase "higher hurdle rate" - but really, when haven't ROI or due diligence been factors? -GW
On the continued push into SMB markets:
"Five years ago, we would have done very little on the SMB product portfolio," Mulcahy said. "Last year, 18 products were focused on SMB. The fact that we had so little business in SMB for such a long time, well, it's great to go after incremental revenues instead of substitutional revenues. 2008 has been the single biggest year for us in terms of SMB product introductions."
The Global assimilation may have factored in on this- but what in the world is "substitutional revenue"? Lease renewals? Xerox is playing is smaller deals now. - GW
On Ricoh's acquisition of Ikon and how it reshapes the marketplace where Xerox, HP, Konica Minolta and Canon all play:
"Times have changed, and there's no question there's more opportunity to be won," said Mulcahy.
"In terms of IKON, they continue to be our No. 1 competitor in every market we're in," Russell Peacock, president, North American Channels Group added, "In terms of their transition to be 100 percent Ricoh vs.Canon - and Ricoh-based, that's going to be challenging for them.
"Typically the customer who has a Canon product becomes very loyal to that product because of functionality vs. Ricoh," he continued. For them to retain that customer is going to be a challenge. It'll be disruptive. In terms of ourselves, we compete with them every day. But we bring a better solution to the table than they do. Let's stay focused and not get preoccupied with other things, because when you do that you get distracted from what makes you great."
Good point. Focus. And just like everybody else, focus on IKON Canon accounts - the blood will be in the water for the next year at least.
Summary -
Xerox is in a good position. They are reducing costs, and extending more into new markets(SMB)plus moving gear.
Xerox is committed to it's VARs.
Looks like the IKON/Ricoh conglomeration represents more opportunity than worry.
Green is everywhere and the decision process is getting more challenging.
New toner, solid ink, and SMB market - the new Xerox.
