Xerox Sells European Research Center Specializing In Artificial Intelligence Work

Xerox has sold a French research facility focused on AI, machine learning, computer vision, natural language processing and ethnography to an Internet company in Korea.

The Norwalk, Conn.-based Xerox said its 80 researchers and administrative staff in Grenoble, France, will become part of Naver, which operates a Korean search portal, mobile messenger, video messenger and community line. Terms of the deal, which is expected to close in the third quarter, were not disclosed.

"The majority of the research taking place at XRCE [Xerox Research Center Europe] was supporting Xerox's business process outsourcing unit, now an independent company, and no longer aligns with Xerox strategy," Steve Hoover, Xerox's chief technology officer, said in a statement. "This transaction will allow us to better optimize our R&D investment, focusing in areas more aligned to our business."

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Xerox plans to continue operating its famed Palo Alto Research Center (PARC), as well as its Canadian research center, according to the company. Those facilities specialize in digital manufacturing and inkjet and digital printing, the company said, along with some of the capabilities found at the Grenoble facility such as artificial intelligence, computer vision, machine learning and ethnography.

Xerox's European research center was founded in 1993, and is located in Europe's Silicon Valley, the company said. The company plans to arrange licensing agreements with Naver and maintain ownership of the intellectual property coming out of Grenbole, according to Xerox.

Edge Business Systems said the research relevant to the Xerox products and services it represents is primarily taking place at PARC or in collaboration with Fuji, and not at the soon-to-be-sold facility in Grenbole, according to Josh Salkin, managing partner at the Atlanta-based solution provider.

Salkin said he's excited Xerox expressed a commitment around keeping its U.S.-based research facility in Palo Alto, Calif. He hopes Xerox invests proceeds from the sale into pursuing opportunities around its A4 product portfolio so that the vendor can better compete against the likes of Brother, HP Inc., Kyocera and Lexmark.

All told, Salkin said he sees the sale as a natural part of Xerox refining its perspective on who they now are following the spinoff of the company's business process services division at the start of this year.

Naver, for its part, said the acquisition will considerably accelerate its development of artificial intelligence and ambient intelligence technologies around the globe. Specifically, Naver said it expects the acquisition to strengthen its research around autonomous vehicles, deep learning, intelligent 3D mapping, robotics and natural language processing.

"The research expertise at the European center is perfectly aligned with Naver's," Chang-hyeon Song, Naver's chief technology officer, said in a statement. "We expect immediate, powerful synergies."

The French Work Council's consultation on the acquisition has been completed, Xerox said, and closing the sale is now subject only to the fulfillment of certain customary conditions. Xerox executives were not immediately available for additional comment.

The sale of Xerox's European research facility comes months after the retirement of Sophie Vandebroek, a highly-accomplished engineer credited for driving innovation at Xerox during her decade-long tenure with the company. Vandebroek assumed the Chief Operating Officer position at IBM Research in January and was replaced within Xerox by Hoover, who had served as CEO of PARC since January 2011.

Xerox has in recent years divested from non-core elements of its business in an effort to double down on its document technology and document outsourcing capabilities. At the start of 2017, Xerox spun off its $6.7 billion business process services division – which was renamed Conduent – essentially undoing its $5.6 billion purchase of Affiliated Computer Services (ACS) in February 2010.

In late 2014, Xerox sold off its $1.5 billion IT outsourcing business to France-based IT services Atos for $1.05 billion. Xerox said at the time that the move would allow the vendor to focus its services operations more heavily around business process and document outsourcing.