Xerox Services Expands Beyond ACS Into Cloud, Verticals

It's been eight months since Lynn Blodgett was named president of Xerox Services. Previously, he was president and CEO of Affiliated Computer Services (ACS), which was acquired by Xerox in February 2010. Blodgett held court in a suite at the U.S. Open tennis tournament this week, taking time between Maria Sharapova serves to talk to CRN's Scott Campbell about Xerox's services catalog, including cloud offerings and its flourishing partnerships. Here are some excerpts from the conversation:

You were named in charge of Xerox Services this year and ACS is integrated into Xerox now. Can you give us an update on how that's going?

Most of our services revenue has historically been focused on larger organizations. We needed a mechanism to get our services out to broader, small, medium business base. One of our approaches was to work with partners like Cisco and we're offering our cloud solution through the Cisco VAR network, which works well for us. It's great reach.

[Related: 6 Ways To Strengthen Partner Loyalty In The Cloud Era ]

What made you decide to leverage another vendor's partner network as opposed to trying to leverage your existing partners or try to build a new channel partner base yourself?

We've had a good relationship with Cisco for a long time. We've been looking at ways, asking what else can we do that makes sense that helps them and helps us. As we explored that, cloud seemed to be a very natural [space]. It's much more cost effective for us to do it that way. We get to take advantage of huge investment they have in building that network. It's also a good way to ramp up in a more controlled way.

It's been about a year now that that partnership has been in place. How's it going?

We've released our products and had them set up and working. It's going well. In two years, it will be much more significant than it is now. It's a growing business. I think it's given us a good [offering]. We offer cloud to our enterprise customers directly and this given us a good [opportunity] to go to customers that we just usually wouldn't have access to.

I think many traditional VARs wouldn't think of Xerox when they think of cloud. What are some things you've learned and kinks you've had to work out in bringing the offerings to market?

I think that the cloud is only one thing that we do. We have dozens of different services that we provide and different services that have different success working within the Xerox network. For example, finance and accounting or human resource and outsourcing, those two are things that are so generally required that having a Xerox senior account executive go to their customer and say did you know we can now do finance and accounting [services]? That's a relatively easy concept to get across, right? It's a little more complicated to talk about Medicaid and it's a narrower market. Customer care is another good example. The fact that we do customer care is conceptually relatively easy for people to grab onto. Those kinds of services have been easier for the Xerox global

Last year, Xerox held its first big partner show in several years, the Fusion conference in San Antonio, where CEO Ursula Burns talked a lot about bringing traditional network managed service providers into managed print. Can you give us an update on that initiative?

Right now, it's a services function but it's still integrated into the technology business because so much of it is wrapped around the device. It's a very good, growing part of the business. I personally think it's the future for major enterprise type printing situations. We're growing well there. It's a combination of some great software and the way that we manage the fleet.

What are some other areas where you see as strong growth opportunities?

If I had to point to a single vertical, it would be health care. We provide services to the providers -- those would be the doctors, the hospitals. We're coming out with new solutions and new platforms for the provider side. We also do a lot of work for the payers. That would be the insurance companies, the claims processing. We help them with the whole process of managing claims. We continue to broaden the services that we offer under that. The third is we have a lot of great relationships with government. We provide the Medicaid processing services for many states. Our most recent major win was California. They really dovetail itno the whole ecosystem: the providers, the payers and now the insurance exchanges. We have some contracts with states and are aggressively seeking more.

Would you agree with the sentiment that you can't be just an IT service provider anymore and that you really need to be a business service provider?

Yeah, we have an IT business that we run infrastructure for entire organizations but our entire focus is in what we call thick verticals, to your point. Where we provide experts in retail who can bring retail solutions. You're right, the idea of being a pure vanilla infrastructure provider is gone. There is some of that that happens but most of that is being driven now by solutions that are more business specific.

Finally, what are some other areas where you expect big growth?

I think transportation is a very exciting area. The reason that I like transportation because no. 1 we have great solutions and are a market leader with many services within the broad transportation area. But I think the new technology that we've gained being part of Xerox has manifested itself in transportation and other areas into services that we provide. I'll give you an example. We just won a contract with the City of Los Angeles working with on-street parking. We were able to take data that we had accumulated because of the ticket processing that we've done for a long time and gave that to the folks at PARC, the Palo Alto Research Center, for Xerox. They are incredibly smart people and they wrote some algorithms and did some other things and said let us give you some suggestions that the city could significantly improve this whole process from a customer point of view, from a revenue point of view and an efficiency point of view. They really came back with some exciting advantages for the customer.

How often do you guys leverage PARC?

PARC is my generic term for all the research facilities of Xerox, but we have customer training sessions very regularly there. We take our major customers there. We bring in some scientists from PARC and lock them into a conference room for the day and talk about the future, what are the big problems people are facing. They're tremendous. They come out of there with lists of things to do and implement in the future. And they have also tremendous talent that we're able to point people, once we hear what [customers'] issues are, PARC becomes a mechanism to point people toward.

In summary, the former ACS business sounds like it has found a home within Xerox. Any challenges you still have?

The transition is going very well. Ursula has done a tremendous job of getting the right level of integration and at the same time preserving the entrepreneurial spirit that made ACS such a great company.

PUBLISHED SEPT. 6, 2012