It stands to reason that if one wants to still look good at the age of 110, it takes more than a little cosmetic surgery to make it reality. For the Xerox Corporation, it began with January’s separation into two companies: Conduent, a business process outsourcing company, and Xerox, the document technology company. The process continued two months later with the single largest product launch in Xerox history.
That is a facelift of epic proportions. But it doesn’t end there.
Xerox is transferring tens of thousands of direct sales accounts to its channel partners, providing endless opportunities for those partners to grow business while enabling Xerox to concentrate direct sales on the largest accounts. Xerox is also seeking to bolster its dealer recruitment efforts on a global scale with double-digit growth, and the company seeks to further augment its commanding share of the managed print services space.
But there’s no denying that much of the buzz surrounding the Norwalk, CT-based manufacturer centers on the launch of the ConnectKey portfolio of 29 AltaLink and VersaLink printers and multifunction devices, announced in March. ENX Magazine had the opportunity to speak with Mike Feldman, executive vice president of Xerox Corp. and president of North America operations, who shared his views on how this mammoth initiative will enable Xerox to establish a better foothold in the A4 market while bridging the paper and digital divide by enabling end users to print for less while printing less. The company also seeks to maintain its standing as a leader in both the A3 space and managed print services realm.
Tell us about your career path leading up to Xerox.
Feldman: I started with IBM, doing an internship while at Pace University. I went directly to HP after graduating and spent 24 years there, working in the printing group as well as with PCs, servers, storage and other IT related products and services. I also worked directly with channel partners, end users and enterprise customers. I left HP in 2012 and a few months later joined Xerox. At first, I was running our large enterprise business globally as well as the managed print services business. The MPS business was responsible for not only direct MPS, from Xerox to enterprise customers, but also our MPS business with channel partners who were serving their customers, mostly SMBs. Some of those channel partners were also serving larger customers as well. I performed that role for a little over three years.
On Jan. 1, when Xerox separated into two companies, we reorganized and I became the president of North America operations for U.S. and Canada. Now I run sales and service delivery to all of our customers, both direct and indirect through our channel partners and all customer segments—enterprise, SMBs, graphic communications and everything else that we do with all of our customers and partners.
Our channel partners consist of multi-branded dealers; sometimes we refer to these as document technology partners. These are some of the bigger dealers you’ll find across the country—Loffler, Usherwood, LDI—as well as our distributors like Tech Data, SYNNEX and Ingram, plus other channel partners and direct marketers. Xerox agents are a big part of our channel business and we’re working hard to transform the model of how we work with the agent dealers and really strengthen their business.
Earlier in the year, it was reported that Xerox is moving tens of thousands of direct accounts to channel partners. How is this progressing?
Feldman: It’s ongoing. We did move some accounts earlier in the year and we’re moving another small group shortly. Another big move is planned for Jan. 1. We’re in the final stages of planning and hope to have all of that set up and completed by Sept. 1, and then we’ll be in execution mode so that by Jan. 1, we’ll be moving those accounts. It’s a significant number, tens of thousands of accounts. We have a direct sales organization that can cover a certain part of the market, but there are so many thousands of accounts that we can’t cover because we don’t have enough direct sales people. That is where the channel comes into play as an extension of our market reach.
Today, we have too many accounts that we segmented to our direct sales organization. If you look at the account ratio of each sales person, they have more accounts than they can cover well. As a result, we miss opportunities. Our channel partners think we’re covering them, so they’re serving a different set of accounts. We feel we can enable our partners and acquire more dealers to be representing Xerox and reach these accounts in a proper way. We can save our direct sales force for the large accounts, the Fortune 1000 companies, and they can hunt for new business with companies like General Motors. We don’t have much business with them, and the rep that is assigned to GM probably has many other accounts. If that rep had only eight or 10 accounts, he or she could spend more time building relationships with the right people and pursuing those opportunities, while our channel partners, multi-branded dealers and our Global Imaging Systems set of companies can handle the rest of those accounts.
In March, the company announced the largest product launch in its 110-year history, the new ConnectKey portfolio of 29 AltaLink and VersaLink printers and multifunction devices. Walk us through the genesis of this undertaking.
Feldman: We’ve been listening closely to our customers through customer advisory councils and other forums where we get feedback. Customers are saying they want to have a tablet or smart phone-type user experience with our devices. They want the screen to have apps on it and they want to be able to press a button and get something done quickly. They want it to be very intuitive. The MFPs can be so much more than just a printer. Customers want to access their documents on these devices. These documents may sit in a cloud repository like DropBox, or could be on-premise, in a SharePoint or a Xerox DocuShare-type of format. Users want to access the document, sign it or translate it into a different language.
We heeded that feedback and came out with these 29 products, the VersaLink and the AltaLink, two families with one user experience and one platform for apps. We’re making it so that these devices—we’re now calling them workplace assistants, because they’re so much more than a printer hiding in a corner—can be in the center and people can get much more out of them. We just needed the right user interface and the right platform, the right security and mobility, with scanning capabilities on the smaller devices. That’s what we’ve achieved with these products.
Your Future of Work Global Tour attracted more than 2,000 customers during the course of 16 events to tout the ConnectKey portfolio. What are the early sales results and how was it received in general?
Feldman: It exceeded all my expectations, both in crowd size and the enthusiasm of our partners and customers about the devices. They loved the industrial look and feel of the devices, the apps we were demoing and their usability, and the fact that the tablets are built into the machines. The feedback was enormous. We’ve already won some awards and had positive reviews from Keypoint Intelligence—Buyers Lab, Better Buys and PC Magazine.
Sales are growing. Some of these products weren’t available for order until June. By the end of September, all 29 will be shipping. We’re very excited about the early results were seeing, particularly the A4 lift we’re getting. We’re going to make a splash in the A4 market, which we’ve been underserving in the past. A3 is a space where we have a market-leading share.
In conjunction with the Global Tour, Xerox released a pair of marketing kits designed to replicate the Future of Work experience. How would you characterize the impact of your marketing efforts?
Feldman: Some of the partners who came out for the tour wanted to host an event at their own location and bring in 50-100 customers for a smaller-scale presentation. That was the genesis of these marketing kits. We called them an “event in a box.” We shipped our partners everything they would need to pull off an event. They’re extremely excited about it. I’ve seen some of the events on LinkedIn; they’ve been posting event pictures, talking about how many people attended. It’s an exciting opportunity for our partners to spread the word to their customers.
One of your stated goals is to expand MPS growth and leadership in the SMB market. How are you approaching this objective?
Feldman: We’re a market leader with a significant share of growth in managed print services. For years we’ve served customers directly with MPS, and over the last six years we’ve grown our channel MPS market and opportunity, which is designed for our channel partners to serve their clients, primarily in the SMB space. We know that 75 percent of SMB purchases are made through channel partners. We’ve been working hard to ensure our managed print services offering is easy for our channel partners to interact with and onboard new customers into. We are supplying our partners the right kind of reporting so that they can deliver the value-add to their customers. Also, billing is simplified, whether it’s a cost-per-page model or some kind of base-plus-click structure. We’ve also started a new MPS accreditation program that recognizes a select group of our most strategic channel partners who have demonstrated the desire and the capacity to substantially grow their MPS business. These partners are getting extra investments in tools, marketing and support for their business.
Xerox is also seeking to recruit dozens of new dealers in 2017 and grow that business by double digits. How are you progressing in this regard?
Feldman: It takes time from the point when a multi-branded dealer is signed up for them to get significant revenue. The first quarter was a little slow, but the second quarter was very good and we’re projecting a huge growth for the second half. We are on strategy for expanding our distribution capacity through channel partner signings and acquisitions. We’re also making sure that all of our partners understand our new connected products, including A3 and A4, as well as light production color and we’re equipping the resellers with the tools, training and support, along with the managed print services programs they need to grow their revenue and business. Some recruitment examples include Memphis Communications Corp., an IT service provider; and Standard Business Systems of Little Rock, AR. This is happening globally as well: we’ve signed three companies in the UK.
Xerox has incredible brand equity. We’re not just interested in growing our own mono-branded agents or our own Global Imaging Systems; we want to expand with multi-branded dealers. They’re making the investments on their own to come to our training events for sales and service delivery, so they can get up to speed and start to ramp up that revenue.
The Xerox 9700, which set many of the benchmarks for office printing, celebrates its 40th birthday this year. How is Xerox positioning itself to address the office market’s printing needs going forward?
Feldman: We’re proud of the 9700, it was a real breakthrough. Our energy is on the next 40 years and beyond. We’re in an environment now where we’re seeing the physical and digital worlds collide. With our new 29 ConnectKey products, we believe we can help our customers with a new experience and allow them to do things that they didn’t think were possible a few months ago. That is where we’re heading with this digital and physical intersection. The apps are the way to get there. The user experience made that all very easy for customers. We’re delivering a smart phone-type user experience. Users want to be able to interact with their documents in a physical world but also in a digital world. They want to use the Internet of Things to call Xerox for service or support or new toner cartridges. All of these incredible ideas that are coming out represent the next 40 years for Xerox. The apps are the game-changer.
Global Imaging Systems announced in May that it had acquired MT Business Technologies of Ohio. What can you tell us about GIS’ growth strategy?
Feldman: When we acquired GIS in 2007, they were a billion dollar organization; today they are over $2 billion. GIS has been growing organically and inorganically, and we think that model works very well. Early in the year, we bought Laser Resources of Iowa. As we find great dealers out there, we’ll continue on with that strategy. It is a fragmented environment and there are still opportunities for more of that type of consolidation. We’re always diligent and disciplined on who we acquire.
What changes in the BTA space are influencing your go-to-market strategy, and what influences will play a role in your strategy going forward?
Feldman: I see a huge opportunity there for the dealers to step up their game in delivering value to their customers. The days of customers just buying printers or multifunction devices to only print or copy something are quickly disappearing. Customers want more services, more solutions to help solve their business problems. They want the vendors and the dealers to help them print for less and print less.
Managed print services can do that by right-sizing the fleets and consolidating them, standardizing on one vendor and one user experience. By using MPS, you’ll automatically fulfill toner and not have a bunch of cartridges sitting in a closet. Once you are able to deliver better print for savings to the customer, the conversation quickly turns to how to become more digital, lower print volumes and put more things into a digital environment. Using workflow automation and best-in-class benchmark security are the ways to do that.
The products that we have in the office space, the VersaLinks and the AltaLinks, as well as our production and light production products—the new Versant 180 and 3100—are incredible products not only for our customers but for our partners to deliver to their customer sets as well. They can break into new opportunities in the office as well as the back office, where they’re printing more high-volume types of documents. It’s absolutely the way of the future.
What are your top tasks as president for Xerox North America?
Feldman: We’re always extremely focused on our end customers and our partners in delivering a great experience to them. That experience goes across sales and service delivery, and providing billing to them that’s very clear and concise. We have an internal saying, “customers for life,” because customers never want to leave, so don’t give them a reason to leave. We prioritize customer loyalty and satisfaction. A second priority is going after all the new business out there. It’s a big market, both in the enterprise and SMB spaces, and we need a smart strategy that is both a direct model for those large customers as well as an indirect model for our medium and smaller customers. Playing the right go-to-market strategy is a huge priority to gain share.
What can Xerox do to build upon what it’s already been able to accomplish?
Feldman: We are an equipment sales revenue market leader, globally. However, we’ve been lagging in the A4 market with the smaller printers and smaller multifunction devices. That’s an area where we can use our success with the bigger devices to deliver on the A4 promise. With MPS, we are the market leader in the enterprise, and we can offer so much value to our partners so they can deliver a similar experience to their SMB customers.
With our mono-branded agents, we’re transforming the model. We’ve had a long history with agents and it’s always been a model where they have sold product on our behalf and we’ve given them a commission. We’re changing that to a buy-sell model, where they can actually buy products and resell them at their price and service the devices. We’re enabling them to do so much more. We’re recruiting dozens of dealers throughout the world, multi-branch, large dealers, BTA-type dealers, or document technology partners as we call them, to extend our reach into the SMB space. And we are a leader in production color and that market is transforming with inkjet technology. That’s how we build on a foundation of strength and extend it into other opportunities where the market is growing. There’s a huge opportunity for Xerox.