CRN Interview: Anne Mulcahy, Xerox

Xerox CEO Anne Mulcahy sat down with Editor In Chief Michael Vizard and Senior Editor Edward F. Moltzen to discuss Xerox's channel and product strategies.

CRN: Can you explain for us why you've come to believe the channel and solution providers are such an important part of the strategy for Xerox going forward?

Mulcahy: Well, I think there's a number of reasons. We didn't really have to be convinced in a sense because I think the market signals and customer feedback clearly indicated that if you really wanted a business with all segments of the market, then your channel strategy has to include, certainly, resellers and partners and solution providers and just a whole set of options for customers to do business with. I think as you know back in 2000, we had just acquired the Tektronix printing and imaging business, and inherited with that strong channel relationships as well as great technologies and people, and that was really a jump-start for Xerox to say, 'We want to hop onto the growth in an important part of our business,' and clearly we've been thrilled with that and have built upon it in terms of really expanding our reach through indirect distribution.

CRN: I think as part of that question, though, a lot of resellers are out there carrying HP today, and they are feeling pricing pressure. So they're starting to figure out, 'Well, OK, I think I need to move upstream,' and when they think about that, then they go, 'Well, should I go with Xerox, Canon or Ricoh?' So when you get into that conversation, what do you tell them about why go with Xerox vs. the other guys?

Mulcahy: Well, I think that we have already developed a track record and a history with our Phaser printing products that I think the channels are very receptive to. And certainly in my business, with some of our key partners and distributor partners, I consistently get the feedback that they want to do more business with Xerox. So I think we've worked hard to establish a reputation as being a good partner and one that we want to continue to earn as it relates to our relationship with the channels. I also think we've got the widest array of technology available for the channel. So, there's nobody whose portfolio, be it Ricoh or Canon or HP, for that matter, that has as much to offer as Xerox does if they consider going upmarket. And, clearly, we want to take that journey with them.

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CRN: You've made two interesting turns of a phrase lately that we were hoping you could expound upon. One was 'Big I and little t' [referring to a strategy of focusing on solutions rather than hardware] and the other was 'partner or perish.'

Mulcahy: Well, you know what, maybe let me just begin with 'partner or perish.' I think one of the things that comes out of coming through the kind of crisis that Xerox has is that you are absolutely a humbler company. And we've gone through a process of being, I think, pretty transparent in terms of saying, '"We don't do everything well. We're going to work with the best-in-class. We're going to provide that value to our customers by identifying partners who, quite frankly, do certain parts of the value tree better than we do.'

So, we've learned to be a good partner and, clearly, I think that that is a big part of extending your reach going forward. I mean, we've come from a position where Xerox used to do everything for everyone, and now it's all about how can you leverage partnerships to kind of drive growth without having to invest every dollar required to drive that growth proposition. So partnerships are huge for us, and if you look at any event, any marketing strategy we have, the list of partners that we work with— whether they're software partners, distribution partners, services partners—is expanding rapidly and I expect that to continue.

I believe that partnerships will be one of the most significant sources of growth this company can capitalize on, so this isn't a nice to-do, it's not kind of an addendum to the strategy. This is the strategy—to ensure that across the value chain partnering is a major aspect of how this company gets to be more efficient and competitive and grow, with great ratios of kind of revenue to expenses.

CRN: And how do you bring the channel in further, into the part of your business that is associated with the nonhardware services?

Mulcahy: Well, I think in three ways. First of all, they're our partner in terms of the ultimate solution. So, clearly, there's a lot of opportunities where we know that the channel has relationships to kind of engage and make sure that it's an integrated approach and we've clearly demonstrated that with a lot of big opportunities that have been delivered. I think the second piece is getting better at not just delivering hardware but potentially pulls and methodologies that help our partners also kind of approach the value proposition a little bit differently than just selling hardware. And third, then, is really partnering also with folks that actually can deliver and really provide those services on a little bit higher value scale than just providing hardware, so clearly we can cover all of the opportunities and geographies out there. So where we can work with solution providers that can really use the software and hardware to provide a richer list of customer, we would love to ensure that we're partnering very aggressively with those folks.