By Pete Basiliere, Research Director, Gartner
“Why doesn’t Xerox’s stock price budge?” was one question that I was asked during meetings in New York City last week. It came up because I had participated in Xerox’s “Simple@Work” event for 850 customers and prospects.
In reality, Xerox’s stock price has been moving upward, just not to the range or with the speed that the questioner would have liked. I responded by suggesting that potential investors — and my questioner, as it turned out — do not recognize the company is much, much more than a digital printer and press manufacturer.
Certainly printing and copying is at Xerox’s core and, yes, the number of printed office pages continues to decline. Gartner has forecast that approximately 3.3 trillion pages will be printed in the offices by 2016, approximately 7% less than the volume printed in 2011. Bear in mind, however, that print involves more than office printers, copiers, fax machines and multifunction products (MFPs). Xerox sells printers that produce high volume transaction documents and quality marketing materials.
CEO Ursula Burns has diversified the 75 year old company into business process outsourcing services. The services segment, comprising business process, document and IT outsourcing, was the largest within the company during 2013, with $11.9 billion in revenue or 55% of its total revenue.
The printing and outsourcing markets are tough to compete in. But one of the advantages that Xerox brings to both markets is its extensive R&D capabilities. I have visited three of Xerox’s five research labs over the eight years that I have been with Gartner: Webster (NY), Grenoble (France) and the Palo Alto Research Center (CA). Research that I saw in Grenoble two years ago subsequently resulted in a cutting edge automobile parking management toolset that enables The City of Los Angeles to generate millions of dollars in revenue while reducing traffic congestion caused by drivers circling city blocks looking for a parking space — classic big data analytics on a practical level.
City parking analytics is a market with little competition, does not involve printing and employs analytical tools that can be applied to other business processes. I am not suggesting that the potential parking analytics revenue alone is enough to generate revenue to completely offset declining print revenue. I am saying that Xerox has tremendous R&D talent working on areas that underpin and streamline business processes of all sorts.
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