Xerox Brings Partners Under One Program

The Stamford, Conn.-based maker of copiers, printers and all-in-one units is locked in a market-share battle with Lexmark, Oki Data, Hewlett-Packard and other vendors and has refocused on the channel.

"We do need to streamline, and we're working on a number of things in that area," said Mark Drum, Xerox's director of channel marketing.

To date, Xerox's channel strategy has been complicated. Its partner tiers include agents, which are authorized resellers that have partnered exclusively with Xerox; higher-volume resellers, including those in Xerox's pilot program to ship multifunction products through the channel; legacy resellers from Tektronix, which Xerox acquired and now considers one of its lead "office" product units; and resellers, which will be able to source low-end Xerox products later this year via general distribution.

Meanwhile, Lexmark and Oki Data have more traditional and uniform channel structures, and printer king HP has been able to meld its legacy solution provider base with some resellers that had done business with Compaq before those companies merged last year.

Xerox aims to roll out its new channel structure within the next 12 months, Drum said.

"We need one program for selling entities, independent of what your shingle looks like," he said. "You'll be going to market with us under one program. I think it's something we know we have to do, and we're working on it."

Xerox's decision to streamline its channel structure is good, but it's three years too late, said Annette Raynor, president of XACT Solutions, a Colts Neck, N.J.-based Xerox reseller and a former Xerox agent and dealer. After XACT invested in a business that included those three separate relationships with Xerox, the vendor began undercutting the solution provider by selling directly to customers over the Web, she said.

Though Xerox's move to prune its channel is a step in the right direction, the effort has pitfalls, Raynor said. "Anytime you combine more than one organization, who's going to take precedence?" she said. "Are you going to give the agent model premier dibs on your new strategy?"

While agents have an exclusive vendor relationship with Xerox, they "don't have the infrastructure," Raynor added. "They don't bill, and they don't have credit lines to buy."

When XACT ended its agent relationship with Xerox, it took eight months to restructure the solution provider's business model into a traditional reseller, Raynor said.