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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.