Xerox Steps It Up: The VARBusiness Interview With Gary Gillam

Xerox, long known for its innovation and crackerjack R&D, is pushing heavily into the higher-end worlds of document-management software and color printing. A new partner program -- in pilot today -- is being aimed at solution providers who want to climb up the value chain to start more sophisticated document-management practices. Gary Gillam, vice president of North American channel operations at Xerox, recently sat down with VARBusiness managing editor/technology Carolyn A. April to discuss the company's efforts to move partners up the technology food chain, penetrate the SMB space and increase mutual profitability.

VB: How big is your partner universe in terms of distributors and solution providers?

Gillam: We have the three broadline distributors: Ingram, Tech Data and Synnex. And because we are in the peripherals business, specifically printers and MFPs, we've got some supplies-only distribution partners. All told, we've got about six North American distribution partners. As far as resellers, if you look at our solution-provider program, the award-winning PEAK program, we have about 1,700 people in it today. In the past six months, we introduced a program called Advanced Solutions, and so we are migrating some of our solution providers to smarter document-management practices with us. And that's starting as a pilot in southern California, and now we are populating that program with account managers across the country. That's going to be transforming 150 of those [1,700] relationships into Advanced Solutions partnerships this year.

VB: Is that the direction you see the industry evolving to right now? Document management offers a better opportunity for partners because they can do higher-level services and sophisticated solutions?
Gillam: It is. Frankly, there isn't much of a future for solution providers just to do products; they have to migrate to [higher-end solutions]. Xerox really wants to leverage [partners'] role as a trusted adviser in a number of accounts we have not penetrated yet, so we are building out with Advanced Solutions a toolkit that consists of document-management software from Xerox or third-party partners, assessment tools and cost-per-print because many customers want to migrate to that kind of a solution.

VB: From a technology perspective, what are the hottest products coming out of Xerox today?
Gillam: Color is absolutely the driving force, whether you are talking about multifunction or printers. So much of our business growth now is coming from color, in both MFPs and printers. And specific to MFPs, smarter document-management software like DocuShare from Xerox is really something that we've been very successful in introducing into the solution-provider channel.

VB Let's talk about customer segmentation. Lots of vendors are pushing into the midmarket and small-business space. What is Xerox's approach?
Gillam: In the Xerox office space at the very high end, we have 8,000 salespeople. It's a very large direct sales organization, and they are working with enterprise accounts. They are not working with small businesses or the small part of the midmarket. But even in the enterprise space, where customers are biased toward an IT solution provider or integrator, [the direct team] hasn't been working with the channel that much. We are working with that large-selling organization to get integrated with the channel in the enterprise. But we are really working with the channel to penetrate small and midsize businesses. We exited SOHO in 2001, so we're not in retail at all. The solution-provider channel is, in fact, our critical channel there, and we are building out programs and products they can win within the SMB space and drive a lot of growth.

VB: What are you doing to drive partner profitability?
Gillam: That is really critical to a leveraged relationship: mutual profitability. For us, it amounts to trying to create a total solution relationship so that these partners, particularly in the color [space], are capturing the annuity business, that post-sales opportunity. If you look at color-network printers, the consumables opportunity is five times that of a mono printer. If you look at the revenue opportunity over the life of the printer, consumables represent three times the revenue opportunity that selling the equipment does. We really have biased the annuity business toward solution providers. [Other things we have done are] built out an ASP program in the past couple of years, and our PEAK partner program, with a combination of a subsidized front-end through our distribution partners and back-end rebates. It really offers a very attractive program.