New york – Realizing it is missing many sales opportunities, Xerox has decided to expand its channel across North America.
During its annual industry analyst conference, held here earlier this month, the imaging company’s North America president Jim Firestone admitted Xerox isn’t winning as much IT business as it could. Xerox’s indirect business now makes up 40 per cent of its entire revenue. However, it is the fastest growing area, which is why the company has shifted focus toward the channel.
“The way our strategies will play out will see service having a large account thrust,” Firestone said. “Customer interfacing will be mainly direct, while working with partners. But in the SMB (market) we will have a higher share of indirect.”
According to Mike Harvey, Xerox Canada’s vice-president of marketing, the company does well selling higher-end product (20 ppm printers) through the channel to enterprise customers.
The channel is mainly made up of old Tektronix resellers. Xerox acquired the solid ink printer manufacturer because of the presence it had in the channel and for its solid ink research and development.
“Specifically around colour, we have a channel program that has been well recognized and we built that through the Tektronix channel,” Harvey said, “and now we want to start to play into the cross-channel product segments.”
Xerox Canada is targeting three areas: customers with single function laser printers who are transitioning to MFPs, small-to-mid-size companies and workgroups within enterprise accounts.
“This is not a straight substitution play,” he said. “It makes sense in office environments to take that (single function printers) to multifunction printers.”
One of the highlights of the conference was the launch of what Xerox claims is its fastest MFP. The WorkCentre 4150 starts at $2,199 and is intended to reach into the small and medium markets in Canada through the channel.
Network printers are being replaced by MFPs because of versatility and document archive with scanning capabilities, said Bradley Hughes, research analyst for peripherals at IDC Canada
Colour is the fastest growing segment with 129 per cent growth for MFPs, according to IDC research.
“End users like colour laser MFP three times more than other printers. It is a strong market to play in,” Hughes said.
Xerox Canada’s current go-to-market strategy encompasses 200 direct sales reps, 80 independent agents that sell on behalf of the printer manufacturer and a few hundred resellers who are currently focused on its Phaser line of products.
Harvey said its network of channel partners will increase dramatically. He said he would not be surprised if the company base shoots up to 2,000 reseller partners. “The new product plays across all channels and we’ll enable customer to have the ability to buy it any way they want, either through the channel or as part of an existing fleet or on a cost-per-copy lease plan. This is what we mean by expanding the channel,” he added.
Direct sales staff to help
Xerox Canada’s direct sales arm will also now be encouraged to push the 4150 series through partners. “The way the lead generation works is the direct rep hands over the (customer) to the reseller and receives full commission for it. Direct sales have an incentive to push that through the channel,” Harvey said.
According to Harvey, Xerox is working with distributors such as Synnex, which is developing a cost-per-copy sales plan (see page 1). He believes that many resellers are also working on their own plans to sell on a piecemeal basis. Xerox Canada is currently piloting some resellers to sell Xerox’s own cost-per-page program.
Xerox also unveiled new tools for software developers to customize the company’s DocuShare Enterprise Content Manager software. The new Web-based tools will enable these developers to do more collaboration and personalize blogs and wikis by using XML technology.
Xerox also released a company-sponsored telephone survey of 250 IT staff in the U.S. showing most are struggling with document management. Eighty-three percent see it as an area ripe for improvement in their organization. One-third felt their organizations don’t have a handle on the costs associated with document technology and services.