You won't find many companies listed in the dictionary as a verb. Xerox, best known for its color and black-and-white copiers, also provides printers, scanners, multifunction devices, and a panoply of services. The company sells document management software and copier supplies and offers consulting and document management outsourcing services. Clients come from the financial services, graphic arts, health care, and government sectors, among others. Customers have included Aspen Marketing Services, Fiat Group, and Ingersoll-Rand. The company's subsidiaries include Affiliated Computer Services (ACS), Global Imaging Systems, and the Palo Alto Research Center (PARC). The US provides nearly two-thirds of sales.
After the global recession helped to knock down Xerox's sales by about 14% during 2009, the company rebounded in a big way in 2010, boosting sales by about 30%, with a relatively modest uptick in profits. Through stringent cost control measures, the company has been able to remain profitable, although not with the margins seen earlier in the decade. With economic uncertainty still affecting many countries, Xerox remains on the watch for signs of decline around the world. Fluctuations in currency exchange rates are a constant source of concern. Looking to cut fixed costs, Xerox has outsourced the manufacturing of many products and faces potential risks if manufacturing contractors are unable to meet demand due to various factors. The company is looking toward color printing and copying, customized digital printing for publishing and marketing, and outsourced services as key areas of growth.
In 2010 Xerox acquired ACS for about $6.4 billion in cash and stock. The deal expanded its portfolio in document management services and strengthened its business process outsourcing, IT services, and other business services. It also tripled Xerox's service revenue, from $3.5 billion in 2008 to some $10 billion in 2010. The move followed similar acquisitions by other companies in the industry. Rival Hewlett-Packard significantly expanded its services portfolio and clientele through its 2008 acquisition of Electronic Data Systems (renamed HP Enterprise Services), and PC maker Dell invested heavily in its corporate services organization with the 2009 purchase of ACS competitor Perot Systems.
Xerox made other smaller acquisitions in 2010 to boost its services business, including ExcellerateHRO (benefits administration and relocation services), TMS Health (outsourced customer service for the health care industry), and Spur Information Solutions (software for the transportation industry).
The following year Xerox bought WaterWare Internet Services to expand its selection of Web-based application development, integration, and customization services, particularly for the the health care industry. The acquisition added digital capture and management functions for health records and pharmacy order automation to Xerox's DocuShare enterprise content management system. The company also acquired digital document products distributor Concept Group and print software and consulting services provider NewField IT in 2011 as part of an effort to expand its presence in the UK, particularly in the small and medium-sized business market.
Once synonymous with copying, Xerox now generates most of its product sales from printers and multifunction devices. Though black-and-white systems traditionally accounted for the majority of Xerox's equipment sales, the company increased the number of color systems across its product lines, with a greater emphasis on higher-margin services and high-end printing systems. To that end, the company phased out its consumer product lines, including its personal ink jet printers.
Xerox gets more than 80% of its revenues from post-sale sources, including maintenance and document management services, consumable supplies, and financing. Growth of its post-sale segments is fueled in part by the company's shift to color systems, which expend consumables at a faster rate than black-and-white devices. Xerox is also building up its document management consulting business, which monitors and manages device usage for clients and migrates businesses to multifunction machines.
Addressing the Asia/Pacific region, Xerox holds a 25% stake in a joint venture with FUJIFILM called Fuji Xerox. The JV develops, manufactures, and distributes document processing products in Australia, China, Japan, New Zealand, and other areas of the Pacific Rim. Fuji Xerox also conducts joint R&D with Xerox; the companies received about 1,600 US utility patents in 2010.
Ursula Burns was promoted from president to CEO in 2009. Burns, who got her start at the company as a mechanical engineering summer intern, previously held roles in product development, manufacturing and supply chain operations, marketing, human resources, and strategy. Her predecessor, Anne Mulcahy, had served as CEO since 2001 and spearheaded a massive effort to regain market share and improve the company's bottom line. Early efforts included major job cuts and divestitures, but recent years saw the company acquire a number of businesses.