Xerox announced that its desktop DocuMate scanners (which are actually made by JFL Peripheral Solutions/Visioneer), now have a driver to work with Linux operating systems based computer. The driver is called SANE (stands for Scanner Access Now Easy).
Competing against Xerox where a customer wants to use tabs in a production print environment? Xerox’s Freeflow system apparently has the following disadvantages:
- all text on tabs must be manually created
- no way to insert or remove a tab without completely resetting all subsequent tabs
- no way to preview all tabs
- now way to print just tabs
- no linewrap or image support
- font can not be changed after creation
Xerox announced new partnership with OpenText, makers of Captaris RightFax, to offer the document management software solutions. OpenText currently supports 20,000 active fax servers.
Xerox makes big news when it announced it acquired Affiliated Computer Services Inc. (ACS). Details:
- Total purchase price of $6.4 billion (Xerox’s largest acquisition ever)
- Purchase price made up of Xerox buying each ACS share for $18.60 in cash and 4.935 Xerox shares, for an approximate total of $63.11 per ACS share, or 34% more than ACS’s stock was trading for
- Xerox also is now responsible for $2 billion in ACS debt
- According to InfoTrends; “Xerox will not likely be able to make any other large investments in the near to mid-term. Xerox may have to limit its investments in R&D. In many respects,
Xerox can’t afford to fail.”
- Xerox’s total annual service revenue will now be $10 billion per year
(compared to last year’s $3.5 billion, of which only $300 million was on process outsourcing)
- Xerox’s total revenue overall will be $22 billion per year worldwide
- It hopes for cost savings of $400 million 3 years after the purchase.
- Will be run as a separate division, with former ACS CEO, Mr. Lynn Blodgett, reporting to Xerox’s CEO, Ms. Ursula Burns. It will be called “ACS, a Xerox company”
- Lynn Blodgett & brother Jim formed Unibase Technology of Sandy, UT in 1985
- Unibase sold out to ACS in 1996
- ACS was founded 21 years ago (1998) by Darwin Deason to serve banking industry.
- ACS is based in Dallas, Texas and was ranked 401 on the Fortune 500 list
- ACS ranked 22nd on Fortune’s top performing stocks
- ACS has 74,000 employees with 500 locations in 100 countries.
(28,324 in the U.S. and 31,035 offshore)
- In contrast, Xerox has 54,000 employees worldwide. (does not include employees of Fuji of Japan which makes most Xerox branded equipment)
- ACS has 14 data centers total located in Dallas (TX), Bangalore (India) and Monterrey (Mexico)
- ACS provides technology used to run the E-ZPass electronic toll system in the U.S.
- In December of 2008, ACS was found by a Dallas judge to be illegally operating automated traffic ticketing machines without a proper license
- In March 2007, ACS was accused of vandalizing traffic speed cameras in Washington DC after it lost the contract to a competitor
- In 2006, ACS faced bribery charges in Canada, after police officers accepted lavish gifts from the company, including travel, sports tickets and female escort services – in return to a recommendation that ACS be given a no bid, $90 million photo ticketing contract.
- ACS also manages administrative operations for multiple arms of the U.S. government
- 40% of ACS’s revenue comes from government contracts
- 90% of ACS’s new contracts last year were business process outsourcing from other firms
- Xerox estimates that the business process outsourcing market is $150 billion per year.
- ACS is the largest provider of managed services to governments in the U.S.
with more than 1700 customers.
- 25% of ACS’s revenue comes from healthcare industry (primarily Medicaid contracts for 15 states) which it expects to grow as the government pushes electronic medical records (EMR) systems
- Deadline from federal government for EMR is 2015.
- 92% of ACS’s revenue is from U.S.
- ACS is also the U.S.’s large student loan processor
- ACS’s total revenue last year was $6.5 billion, a 5.9% increase over previous year
- In contrast, Xerox posted declines for last 4 quarters
- ACS’s profit last year was $350 million
- ACS has made nearly 100 acquisitions over last 20 years.
- ACS’s stock was originally trading at $47.25 per share, while Xerox’s was $8.23 per share
- Before acquisition, Xerox had $1.22 billion in cash and $6.7 billion in debt
- ACS has 80% of revenue in business process outsourcing and 20% on information technology outsourcing
- Sales of IT services in U.S. grew 8.2% in 2008 to $806 billion according to Gartner.
- Xerox felt pressure after Hewlett Packard had bought Electronic Data Systems (EDS for $13.2 billion) and Dell Computer had purchased Perot Systems (for $3.9 billion).
- When asked why Xerox bought ACS, Ursula Burns said; “Customers are saying – We need help with the entire document infrastructure. We’ve got the technology piece of the back office and the technology piece of automation. We need help with the information piece. By combining Xerox’s strengths in document technology with ACS’s expertise in managing and automating work processes, we’re creating a new class of solution provider. A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth.
The way we were going was going to take 10 years (to transform from a product company into a service provider). The path we were on wouldn’t have given us the scale fast enough.”
- Lynn Blodgett said; “ACS continues focusing on our core capabilities, including transactional business processing, customer care, information technology and human resources. These capabilities touch millions of lives every day through governments and commercial enterprises around the world. We are committed to providing significant value for both our clients and stockholders. We also know that for ACS to expand globally and differentiate our offerings through technology, we need a partner with tremendous brand strength and leading innovation. Xerox offers that and more to bring our business to the next level while strengthening theirs.”
- Xerox claims that it previously shared only 20% of its customers with ACS.
- Xerox claims that ACS is primarily a U.S. based company, and most of growth for ACS will come from Europe, Asia and South America.
- The two main competitors to ACS in this market left are Accenture Ltd. and Computer Sciences Corp.
(are they up for grabs as well?) Others in this market space are IBM Global Services, HP Enterprise Services, Deloitte, Unisys, Sourcecorp & Hewitt Associates.
- Computer Sciences Corp. is the manager of networks for NASA and the U.S. Navy, and is based in Falls Church, VA. 35% of its revenue is from government contracts.
- Accenture has a market value of $27.8 billion with 180,000 employees
- Hewitt Associates, based in Lincolnshire, IL, is worth $3.38 billion
- Other smaller firms are Cognizant Technology Solutions Corp, CGI Group Inc.
and Sapient Corp.
- Other firms looking at acquiring services companies are Cisco Corp and Oracle Corp.
- Oracle is currently closing a $7.4 billion deal for Sun Microsystems Inc.
- Standard & Poor’s will cut Xerox’s corporate credit rating to BBB-.
- ACS tried to sell itself 2 years ago to private equity firm Cerberus Capital Management
- 5 months ago ACS took over computer operations of Novell Inc. of Provo, UT.
What do other think about this acquisition? Here are comments from the Gerson Lehman Group, financial advisors in Business Week magazine:
“will end up further de-focusing the company’s core business as well as the weakening of ACS’s competitiveness in the marketplace”
- “Xerox’s big bet on services with the ACS acquisition is not likely to be successful”
- “Xerox has failed miserable in financial services sector by acquiring several large financial services firms in the early 1980s (Van Kemp Merrit…….and others costing many billions around 1983)”
- “mixing ACS with Xerox’s main line business is like mixing oil & water”
- “will result in ACS losing market competitiveness and market share as well as decline
in its gross margin”
Less than 48 hours after the Xerox/ACS announced, some shareholders filed a lawsuit to stop it in the Delaware Court of Chancery.
- Contends that officers and directors of ACS breached their duty of loyalty
- Claim that executives of ACS were conflicted because of approximately $16 million to be paid to them
- Former founder Darwin Deason supposedly receive an extra $300 million in Xerox stock
Investment firm, KKR, is on track to own up to 16.5% of Kodak. Former Kodak CEO, George Fisher, is one of KKR’s senior advisors. (Does Mr. Fisher see Kodak as a future acquisition target?)
Kodak’s proposed settlement of a race discrimination lawsuit goes before Judge Jonathan E. Feldman.
- Lawyers filed a motion asking for approval of a payout of $21.4 million
- Attorney’s fees would take $9.7 million of the payout
- The rest would result in payment to former employees of ranging from $1000 to $75,000 apiece.
Kodak announced that its board of directors has amended its contract with CEO, Antonio Perez, so that he remains in his current position until 12/31/2013. The previous contract ended in 2010.
Will new accounting rules change copier leases?
- Since 1976, all industries have been allowed to account for equipment leases as either a capital lease or an operating lease
- Operating leases allow customer to account for the copier lease as a monthly expense rather than an asset that goes on the balance sheet.
- The Financial Accounting Standards Board (FASB) has put together a project designed to change the rules by eliminating operating, or off-balance-sheet leases. This could go into effect in 2011.
A dealer in Michigan grows by focusing on solutions:
- ImageSoft Inc. of Southfield, MI, was named to Inc. 5000 fastest growing U.S. businesses
- Revenue growth rate of 87.47%
- Named one of Metro-Detroit’s 101 Best and Brightest Companies to Work For
- Has 44 total employees
- Just opened satellite offices in Grand Rapids (MI), North Carolina and Oregon
- Founded in 1006 by Scott Bade, James Leneschmidt & Steve Glisky
- Has 143 customers ranging from government, healthcare, insurance, education and manufacturing
- Just won bid for electronic content management (ECM) system for Oregon Judicial Department, which handles 600,000 cases per year
Intel Corp. demonstrated a chip-based authentication scheme that could allow or prevent devices to access a computer network. It is called vPro with Active Management (AMT) technology, and could also be used to prevent non-original manufacturer-made cartridges from being used in printers and MFPs.
IKON, a division of Ricoh, announced it won a facilities management bid from a large law firm
- Duane Morris LLP, which is headquartered in Philadelphia, PA
- Has 700 attorneys in 24 offices in U.S. and internationally
- Includes all new Ricoh MFPs and printers
- Total revenue and length of contract not announced
IKON announced it will conduct a presentation called “Running the Numbers for ROI” at the upcoming Mailing Systems Technology Conference in Chicago.
Apparently Ricoh’s Regional Vice President, in charge of wholesale in the Midwest, Chuck Parr, has left the company.
Promos that Ricoh is apparently offering through its branches in the 3rd quarter of 2008
- Zero % finance leases
- Reps can waive up to 6 months of remaining payments of existing customers’ lease.
- C900 program of $0.05 for color clicks and $0.0055 for b/w clicks
Ricoh announced that it will recycle copiers in Japan, England and Ireland. Details:
- Each machine is stripped down to chassis
- Replace all lifetime parts
- Fit all mods and firmware updates
- Respray external panels
- Are priced 25% less than equivalent new models
- Have either “RC” or “R” in the model name to denote that they were used copiers that were recycled
OpenText Corp. was awarded with a “Strong Positive” listing from Gartner’s 2009 MarketScope for Records Management providers. OpenText offers enterprise content management software, including Captaris RightFax.
The global market for printer, copier & MFPs declined in first half of 2009 according to Gartner:
- shipments totaled 51.3 million units including office and home use devices
- a decline of 20.2% compared to year previous
- office printing devices down 24.5%
- HP holds 40% marketshare, down 3.4%
- Canon has 19%, Epson 14.2%, Brother 6.2%, Samsung 4.9%
VistaPrint, a large print for pay, continues to grow its revenues:
- Since 2005, revenues grew from $90 million to $515.8 million (450% growth)
- CEO is Robert Keane
- Incorporated in Venlo, Netherlands
- Has sales offices in Lexington, MA, Barcelona (Spain), Montego Bay (Jamaica), Winterthur (Switzerland) and Paris (France)
- Has 20 million repeat customers
- 60% of its sales are through its website
- Printshops are located in Windsor, Ontario, Canada and Venlo
- Average on-line order is $33.00
- Ranked 16th on Fortune 100 Fastest Growing Companies
- Recently became the provider for Fedex Office (formerly Kinko’s) web-to-print sales
In order to increase print volumes, Hewlett Packard is now offering templates for brochures, fliers and business cards through its MarketSplash website for owners of its printers. The site also will offer a print fulfillment option, giving end user the ability to choose a local HP authorized print service provider.
Hewlett Packard announced changes at its Graphics Solutions business unit. Michael Hoffmann has been replaced by Christopher Morgan as the new Senior Vice President.
Hewlett Packard filed a complaint with the International Trade Commission, seeking to stop several companies from selling compatible printer cartridges that violate HP patents. Companies listed were:
- Zhuhai Gree Magneto-Electric of China
- InkPlusToner.com of Canoga Park, CA
- Mipo International of Hong Kong
- Shanghai Angel Printer Supplies of China
- SmartOne of Hayward, CA
- Shenzhen Print Media of China
- Comptree of City of Industry, CA
- Jingjie Imaging Products of China
- Tatrix International of China
- Ourway Image of China
According to an article in the Wall Street Journal, Hewlett Packard is considering merging its printer/MFP division with its computer division. Details:
- The printer and PC operations had been combined early in the decade, but HP CEO Mark Hurd separated the units soon after he took over 4 years ago.
- PC unit is run by Todd Bradley
- Printer/MFP unit is run by Vyomesh Joshi (who spent $1 billion in R&D to develop the Edgeline)
Fogra of Munich, Germany, announced it has certified the Oce’ CS665 Pro (relabeled Konica Minolta bizhub PRO C6501) as a Validation Printing System, meeting the requirements of the latest ISO-based FograCert certification. The is the approved standard for sheet-fed and web offset printers.
On Wednesday, October 21st, at the U.S. District Court in San Francisco, before Judge Jeffrey White, the three major OCR engine makers will argue over their patents, with representatives from Nuance, ABBYY and IRIS appearing.
New managed print services solution. Dynamic Supplies announced that its PrintSolv software will now automatically sends printer and copier information back to a fulfillment system. It monitors client’s toner levels and proactively flags an order when the level reaches a predetermined threshold. The new feature is called “Proactiv Supplies Fulfillment”
Oce’ reported its last quarter’s financials:
- Reported a net loss of $36 million
- Revenues declined 10%
- operating income down 14%
- net income down 1%
- Share value feel 6.5%
- CFO, Hans Kerkhoven stated that Oce’ would continue to use cost-cutting to mitigate revenue declines and would not forecast a return to net profit
- Has cut 1,170 jobs so far this year, with a targeted total of 2,350 jobs to be eliminated
- net debt of 566 million euros
- color is now 31% of revenue
- non-recurring revenues down 23%
- recurring revenues down 7%
Konica Minolta’s Australian division announced it has now placed 500 bizhub PRO systems in the country, for a third of the production print market. The latest sale was a C6501 to Oxford Printing of Sydney.
Pitney Bowes steals an executive from Ricoh. Lori Ann Cerullo, formerly VP and GM of Ricoh’s InfoPrint division, was named VP of U.S. Sales for Pitney Bowes, in charge of the Document Messaging Technologies business unit.
Pitney Bowes released results of a survey that found 57% if alumni chose direct mail as the preferred method to receive information about the school that they attended.
Several customers filed a lawsuit against Fuji of Japan, claiming the company knowingly sold defective digital cameras. The suit was filed in the U.S. District Court in New Jersey.
Toshiba announced it will cut in half the amount of research and development money it spends on computer chip/semiconductor technology
Toshiba announced it will launch an LED lightbulb capable of producing 810 lumens, the equivalent of a 60 watt lightbulb. The bulbs will sell for the low price of $101.00.
Toshiba completed the purchase of Fujitsu’s hard drive business for $334 million.
Toshiba announced it is letting go of Jerry Lumpkin, who was VP in charge of the company’s computer division, known as Toshiba America Information Systems.
Des Plaines Office Equipment, a Sharp dealer owned by Chip Miceli, announced it is purchasing one of its competitors in the Chicago marketplace, by acquiring ABM Office Equipment (Xerox and Kyocera Copystar), which was owned by Gaylord Smilden. This is Mr. Miceli’s third acquisition in 3 years.
Duplo, maker of duplicators, three years ago announced it would relabel Sharp copiers, and call them the Duplo Docucate series, and hoped to add $40 million in sales annually to the company. This target was never reached, and when asked if they would continue, the company responded; “ we are reconsidering our business direction for Docucate in 2010”
Lenovo, which bought the PC business from IBM, announced it will relabel the Lexmark X543dn desktop color laser A4 MFP and call it the Lenovo MC8300DN. This their first Lexmark product, as the other desktop products that the Chinese company relabels are from Brother and TECO of Taiwan.
Kyocera now offering a managed print services program, called FASTrack, which is based on FMAudit software.
Kyocera gave out more details on its platform for embedded software in its MFPs, called “Hybrid Platform for Advanced Solutions” or HyPAS:
- provides separate Java and Web Services software developer kits
- Java embedded applications allow company to extend the existing feature set, with more advanced serverless capabilities
- Web Services applications can be implemented on a range of platforms using almost any
- PanelPlus, based on Java, offers pre-programmed OneTouch buttons for scan to email,
scan to PC, or FTP with customizable icons
- PrintQ Manager server based software enables print user authentication and authorization via Active Directory, provides print job queue on control panel and integrates with HID card readers
- KYOcapture is a relabeled version of NSi’s AutoStore
- Equitrac Office and Express
- OpenText RightFax
- Future product is a scanning utility for Apple iPhone and iPod Touch
NEC announced it will relabel the Kyocera TASKalfa 620 and call it the NEC IT6200. In addition, it will relabel the Kyocera TASKalfa 820 and call it the NEC IT8200.
Netaphor Software Inc. announced it is now shipping SiteAudit version 3.0, offering new features of its managed print services software.
Print Audit, makers of managed print services software, announced it is compatible with Microsoft Windows 7 operating systems.
Trying to sell document management solution? Here is a few facts:
- 4 drawer file cabinet holds about 10,000 pages of paper
- 100 gigabyte hard holds enough info to fill 200 filing cabinets
- Documents can be organized into logical electronic files that can be retrieved through
convenient keyword searches
- Document privacy and security are improved through password protected access
- Information is backed up regularly to create disaster recovery strategy
Industry research company, Raymond James & Associates stated the following about IT sales:
- Sales increased by 6.5% in second quarter as compared to first quarter of 2009
- Expects IT sales to fall 10.6% as compared to last year
- Sales for SMB focused resellers are expected to fall 15.5%
- Large corporate account shipments fell 15.7% compared to last year
- Sales to public sector increased by 1.3%
According to Access Markets International Partners of New York, the country of India will spend $.13 billion in 2009 on printers and printer supplies, which is a 7% increase.
Dell Computer was ordered by the New York Attorney General, Andrew Cuomo, to pay $4 million in restitution for deceptive and fraudulent business practices. The charge was that Dell pressured customers to fix their own computers, even though they were under warranty.,
Results of a survey conducted by Business Roundtable revealed:
- U.S. chief executives are not ready to step up hiring or capital spending
- 40% expect to cut U.S. jobs over the next 6 months
- 13% expect to add jobs
- 35% expect to lower capital spending
- 21% plan on increasing capital spending
- 51% expect their sales to increase slightly over next 6 months
- Expect U.S. gross domestic product to decline 0.9% in 2009
Canon announced it is pulling out of the 2010 Photo Marketing Association (PMA) trade show in February, 2010 to cut costs.
Lasermaster International Inc. (LMI), maker of generic toner cartridges, announced it is building an 86,000 square foot manufacturing facility to add on to its plant in Phoenix.