*NEWS*XEROX & H-P AT WAR
*NEWS*XEROX & H-P AT WAR
2003-11-26 at 9:50:00 am #8004
High-End Copier Space Heats Up
For most companies, cost savings are not derived from cheaper devices that produce documents — such as printers — or from the management of those devices. It is in the overall workflow, from the creation of a document to its final destination.
Hewlett-Packard’s announcement of its foray into the high-end copier market may have been timed for Comdex, but it also came less then a week before Xerox’s 2003 Investor Conference. Xerox stole back some of the thunder by threatening to protect its market share “with a vengeance.”
There are always — well, usually — two sides to every story. In the tech world, it generally does not suffice for one firm to say, for example, “We’re going to kick butt in such-and-such a market.” Usually, the reply from competitors is swift — something like, “If you think we’re going to be standing still while you kick, think again.”
Boils Down to Execution: According to Xerox CEO Anne Mulcahy, “There’s a ton of opportunity in front of us, and now it all comes down to execution.” In Xerox’ case, that statement amounts to fighting words. “They’ve had to pull themselves out of the gutter,” Gartner analyst Peter Grant told NewsFactor. “They’ve cleaned up a lot their mess.”
Xerox is slowly chipping away at its US$11.8 billion in debt. More importantly, the company is poised to take on Hewlett-Packard as it moves into the high-end copier and document-management space. “I think they’ve got a very aggressive product line,” noted Grant. “But with Xerox, it’s never been about products. For them it’s been [about] execution, channels, service and support. They’ll be very focused.”
Taking Candy from Whom?: It may not be so easy for Hewlett-Packard to follow through on its plans to take 10 percent of the market by the end of 2004. “The way the copier deals are set up — on long term contracts — it’s hard to go in and turn over much more than that,” said Grant, “so it’s an aggressive step to say ’10 percent in the first twelve months.’”
Still, the output segment of the I.T. space is ready for major consolidation, driven by HP’s move into the market, Grant believes. For most companies, cost savings are not derived from cheaper devices that produce documents — such as printers — or from the management of those devices. It is in the overall workflow, from the creation of a document to its final destination.
“You take hundreds to thousands of workers and change the way they work and get it done faster,” suggested Grant, “[and] that’s where the big savings are.”
Extreme Prejudice: That is where HP hopes to build a new business — after IBM at No. 1 and Xerox at No. 2. “Where you’ve got three or four strong players today, they’ll continue to get stronger and push out the second-tier vendors [such as Canon and Ricoh],” Grant says.
Still, HP can exploit one Xerox weakness: It has no end-to-end solution. “HP is very comfortable saying, ‘We can handle your desktops, servers, output, networks, help desk — we can do all that,’” noted Grant. “Where Xerox is willing to say, ‘We can handle your fax, printing, copying — and we’d like to stop there.’”
But Xerox issued a provocative outlook for 2004, stating, “Xerox continues to defend with a vengeance its leadership position….” Perhaps the gloves are about to come off.