Xerox Partners Lukewarm On Prospect Of HP Takeover

Xerox partners are conflicted at the possibility of HP leading a takeover bid for Xerox.

After HP rejected Xerox’s initial buyout offer on Sunday, the company left the door open for talks to continue, but some partners who two weeks ago relished the possibility of having Xerox take over HP, are more cautious about their prospects under HP leadership.

“Does HP understand the need for national service from the manufacturer, and a dedicated sales force that is immersed with the customer in helping them find the best solution for them?” asked Troy Tafoya, president of Professional Document Solutions Inc., a Xerox reseller in Fort Collins, Colo.

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Last week, it was HP partners who said a Xerox takeover would “lead to a negative outcome for the entire channel ecosystem,” due in part to Xerox’s lack of skills in the PC market.

“There is a big cultural mismatch around Xerox being able to understand how today’s IT channel model works," said Harry Zarek, president and CEO of Compugen, No. 57 on CRN's 2019 Solution Provider 500. Richmond Hill, Ontario-based Compugen in March was named HP Inc. Personal Systems Partner of the Year for Canada.

For his part, Xerox reseller Jeff Bryant, vice president of operations with Dallas, Texas-based CESCO Inc., is no more enthused at the prospect of working inside HP’s system.

“I don’t like HP’s sales model,” he said.

Xerox Accredited Master Elite Partner Josh Justice, who owns Just Tech in La Plata, Md., said the two partner programs may not be identical, but with HP, at least there is still a channel for partners.

“I think there are synergies between the companies and that time will tell if a deal can be established where HP buys Xerox or Xerox makes another offer to buy HP,” Justice told CRN. “HP is also partner-centric and would need partners to provide the products, supplies and solutions just as Xerox does, so I still see upside from a potential transaction for partners.”

Tafoya said the two men in charge of Xerox, CEO John Visenten and president Steve Bondrowczak, are clear-headed about the challenges the company faces and he feels they have shown the right approach to confront them.

“Key things like making Xerox internally, and externally, easier to do business with, and moving at the speed of business, which over the last decade Xerox management lost focus on,” he said. “They also understand how important the Xerox ‘customer experience’ is through out the sales cycle, and ongoing service and support, is key to growing our business.”

Bryant and Tafoya are both cautious about how HP would handle Xerox strong A3 business, the success of which, the printer king has struggled to duplicate. However, Tafoya said together, the two companies would be “formidable” to compete against.

“Consolidation would … save the companies money, and create a behemoth in the industry that would have our competitors very concerned,” Tafoya said. “Xerox’s strengths, are HP’s weakness and vice versa. Xerox’s great A3 products, production, and strong infield sales and service channels, combined with HP’s proven A4, wide format, and the excellent software they have would be formidable.”