Xerox: Back On Track

When Anne Mulcahy was named CEO of Xerox in 2001, the company had posted a $94 million loss for that year and its stock was about $5 per share. Last year, Xerox earned $894 Million and its stock hit double digits. Tech Data CEO Steve Raymund said recently that Mulcahy's ‘assignment to rescue an American icon was accomplished.& she recently spoke with CMP Editors about the channel&s role in Xerox&s success. following are excerpts:

CMP: Can you detail how the channel will help you sell more services and solutions?

MULCAHY: Our [Solutions Advantage] pilot is helping us to learn what [solution providers] need and how much we have to invest to re-create turnkey tools to deliver services our [SMB] clients want. It includes everything from assessment services, utility model tools, asset management services for the optimization of hardware, supply replenishment services. The other thing we need to provide is training. We have to train on the value proposition, beginning with the business problem.

CMP: Why is SMB important to you?

MULCAHY: If you talk opportunity for growth with the senior team at Xerox, it&s one of the top opportunities regardless of the business we&re running. We have to support it with incentives and the right motivation. If you want to grow your business at Xerox, you better work with SMB. We need the right parameters in place to ensure that SMB business goes to the channel, and that there is no conflict with a direct sales team.

CMP: What kinds of processes are you putting in place to ensure there is no channel conflict for SMB customers?

MULCAHY: You&re never 100 percent clean, but I think we&ve made a ton of progress. We have clearly engaged more on indirect and we are more focused and narrow on the direct side. I think we&ve decided if a product is channel-ready, it&s going to the channel. End of story. There is no exclusive to direct. If the product suits the channel in terms of acquisition, we want to be there.

CMP: Has the channel been doing its job?

MULCAHY: We need the channel to get comfortable with new technologies. I was so excited about our own launch of Workcentre c2424 in the channel. I think it&s one of the best products: multifunction, solid ink. But it&s not moving in the channel as quickly as we want.

CMP: Why do you think adoption hasn&t been there?

MULCAHY: I think there&s responsibility on both sides. We understated the market development needed for a new category of product. You&ll see us do more marketing. It&s a new segment of functionality. We have to do more to create pull for the product. Distribution and resellers need to do more. It&s easy to sell what you sold in the past vs. describing a new product. We can do more on the market demand. Our job is creating awareness.

CMP: Why do you partner with Dell?

MULCAHY: It&s in a market segment we don&t optimize from a distribution segment. It&s low-end, giveaway distribution. For us, it builds volume that we don&t deliver through any of our value-added channel relationships. It&s manufacturing leverage.

CMP: Do you have concerns that they will start to build the product themselves?

MULCAHY: It&s a balancing act. We are managing it with tight parameters. In this case, it&s a Fuji/Xerox relationship, not a Xerox relationship. That&s the confines of where it&s going and we'll manage it as such.