Boy oh boy, you just never know whats going to happen in our industry! Xerox down and out for the count three years ago, and boldly takes a step where no manufacturer has gone before. Xerox has upped the anti in the MFP War. Xerox acquiring Global Imaging located in Tampa, Florida will add an additional 1400 sales people on the street in the SMB market, plus an annuity stream that may top 1 Billion Dollars. The total price is $1.5 Billion, I'll bet there are a lot of Global Execs counting their greenbacks right about now and getting ready for an early retirement.
However, what does this purchase mean for the rest of the industry? Ricoh, Canon and Konica Minolta stand to lose substantial placements and revenue streams in the years to come. Hey, I think it may be time to start buying Danka and Ikon stock, if you think Ricoh and Canon are going to stand buy and not do anything... I think you haven't seen the whole picture yet. The time may be right for Ricoh to buy Ikon and Canon to buy Danka, its all about protecting your channels. Well, Xerox just took a big chunk of their channels today!
If Ricoh and Canon bought Ikon and Danka, could we see a replay of what happened twenty years ago, when Ikon and Danka first started. Could there or is there enough room for another huge round of dealerships being merged and bought to form a new conglomeration of dealers under another National Corporation?
How will Xerox handle their new partner? I for one would like to know how Xerox is going manage a direct sales force and then the sales force of Global, they are of two different cultures in the industry. Can they develop a successful marketing and dealer program that will enable both the direct sales force and Global to co-exist? Will Xerox handcuff them with short margins on boxes, supplies and parts? What about the logistics of supplying a 21 new core regions? I'm sure there is going to be many headaches and many success stories. Another question, what happens with Xerox's direct sales force? Will they be merged with the 21 core offices, will they be able to keep their jobs...... very interesting, we'll have to wait and see.
How will the Global employees react, their culture was always to sell against Xerox. Xerox was the name you had to beat, do they then become complacent because they now have the name?
I havn't seen or heard from a Xerox salesperson in my territory in the last few years and yes I concentrate in the SMB market place. Now, things will change as they always do and will, I will also have to change as I always do, when Xerox comes to town!
Art, where's the revenue stream for Xerox in this? Is Xerox going to stand back and allow their new step-children to service those Canon, Toshiba units in place? Better yet, is Canon or any of the other manufacturers going to allow Xerox personnel to service those units? What about those leases with Service and Supplies built-in - what's going to happen 90 days out when Xerox says "OK, for those of you still here, you're selling Xerox and thats it!"?
ReplyDeleteBig questions arise in this merger - though Xerox has a history of very foolish purchases. Biggest question I've got is what's going to keep a heavy-hitter sales type from walking down the street with his portfolio or opening a storefront nextdoor selling and servicing the same brands Xerox is getting rid of.
Xerox' salesforce can handle themselves and the enterprise level where pricing and competitive pressures aren't that great. Where they need the boost is in those small to medium offices that have three to five copies and fifteen printers and Xerox can't get their foot in the door. As a Xerox alternate channel we can't get the margins out of the Xerox boxes and just can't sell those Xeropx printers with no margins - sure aftermarket revenues are there but our salestypes can't make it on $200 gross profit deals.
This looks more like the Xerox of the early '80's when Ricoh came to the US and Mother X lost her sales force and entire market share and began her slooow slide that almost gutted the company. Now she's forcing those that made Global a success, leave and make someone else successful.