XEROX MULCAHY RETIRING AS CEO
XEROX MULCAHY RETIRING AS CEO
2009-05-22 at 11:15:17 am #21903
Mulcahy retiring as Xerox CEO; Burns tagged as successor
Document management company Xerox Corp. reports that Anne M. Mulcahy, chairman and CEO, will retire as CEO on July 1.The Norwalk, Conn.-based company says that Xerox president Ursula M. Burns was named by the board of directors as the new CEO. Mulcahy will keep serving as chairman of the board.Mulcahy, 56, assumed the role of CEO of Xerox on Aug. 1, 2001, and was named chairman on Jan. 1, 2002. She rose through the Xerox ranks, having started as a sales representative in 1976, eventually serving as president and chief operating officer of the company from May 2000 through July 2001. Mulcahy has also held senior management positions in sales, human resources and marketing, and led the Xerox business division that sells products for reseller and dealer channels.Mulcahy is credited with — among other accomplishments — creating Xerox Global Services, which offers document-related outsourcing, imaging and consulting services, which in 2008 generated $3.5 billion in revenue.Burns, 50, joined Xerox in 1980 as a mechanical engineering summer intern and later took on roles in product development and planning. In 2000, she was named senior vice president, corporate strategic services, heading up manufacturing and supply chain operations. Burns later took on the broader role of leading Xerox’s global research as well as product development, marketing and delivery. In April 2007, Burns was named president.Xerox employs approximately 57,100 globally and reported a 2008 profit of $230 million on revenue of $17.6 billion.
Xerox keeps up R&D, risks cannabilization
* Plans to keep R&D spending level despite recession
* Company introduces new line of solid ink printers
* Does not fear risk of cannibalizing own laser printers
NEW YORK, May 09 – Eyeing a chance to bear down on its rivals, Xerox plans to keep up the pace of spending on research and development, even if it means cannibalizing some of its products as customers rethink their choices about office equipment.
Xerox President Ursula Burn is driving engineers at the printing and document management company to come up with ideas such as a new solid ink system ColorQube, whose print heads can jet over 150 million drops of ink per second.”We are extremely bullish and fairly dogmatic on research and development and how you invest in it during good times and bad. It’s tougher to make a dollar than it’s ever been in my life, but a dollar can still be made,” Burn told Reuters in a recent interview.”We are making sure that we do not damage our infrastructure and our value proposition. That’s why we are still investing in innovation.”
Xerox, which reported $17.6 billion in sales in 2008, slightly better than the year before, spends around $1.5 billion on R&D, Burns said. That includes development costs at Fuji Xerox, a joint venture between Xerox and Japan’s Fuji Photo Film Co.Xerox’s R&D budget — exclusive of Fuji Xerox — has declined in each of the past three years, falling to $883 million in 2008.But proportionally, the company sees 2009 on par with recent years. At its analyst day in November, CFO Larry Zimmerman pegged 2009 R&D spending at 4-5 percent of revenue. This compares with 4.9 percent in both 2008 and 2007.
After three years of development, Xerox earlier this month introduced ColorQube, which promises to shrink the cost of color printing for high-volume users to 1-3 cents per page, on par with that of black and white printing.The product line, aimed at users who print 15,000-30,000 pages a month, also creates less waste — a “green” angle that Burns hopes will help lure customers of rivals including Ricoh, Canon and Hewlett-Packard Oddly enough, ColorQube can replace laser printers, those workhorse models found in a multitude of offices — many made by Xerox. Burns says she is not afraid that customers might replace one Xerox machine with another.”We are more concerned that there is significantly more opportunity to attack our competition,” she said. “The best way to grow our business sometimes is to cannibalize our own, or to cannibalize a technology …. It’s a beautiful problem to have. I lose no sleep being in this situation.”
The goal of most leading printing and document management companies is to seed the corporate landscape with machines.While business may be slow due to the economic downturn, the companies that survive will still need to print internal communications, as well as documentation for both current and prospective customers. Color is seen as a way to spur response from those who are targeted.But Burns, along with Xerox Chief Executive Anne Mulcahy, may be kept awake by the pace that its customers are delaying purchasing decisions. Xerox’ first-quarter earnings report showed a 14 percent decline in color revenue and a slowdown in color page growth.
Research firm IDC, in a statement that praised the advanced technology of ColorQube, noted however that customers who might desire color systems aren’t immune to sticker shock.While Xerox’s ColorQube contracts employ a system whereby users pay for the ink used — rather than pages printed — the machines introduced this month range from $21,000 to $26,000.”Until color hardware prices are nominally higher than black/white laser’s, the adoption curve of color in the office will continue to be evolutionary and not revolutionary,” said Angele Boyd, IDC’s research vice president for hardcopy peripherals.
Burns admits the economy is unpredictable, and that even this new printer-and-ink line line won’t pack much financial punch this year.”I wish this product could turn the economy around. But we are not expecting (that),” she said. “We expect that the financial impact of this product in 2009 will be very small primarily because it is the introduction year. But as the machines expand in the field, as the economy gets better, we expect to see a measurable impact.”