Xerox, HP Inc. Partner Together on PCs, Printers, DaaS Technology

HP Inc. and Xerox today announced a sweeping business-partnership expansion, with Xerox to begin selling HP Inc. PCs, PC displays, and PC accessories.

Xerox will also source from HP certain A4 and entry-level A3 printers, and copier/MFPs, with the majority running on Xerox’s ConnectKey controller software. Xerox will supply toner to HP for these and other products. The printers will be based primarily on the laser printing technology HP acquired from Samsung in 2017.

The two companies also agreed to partner in the Device as a Service (DaaS) market. Xerox will become a DaaS specialist in HP’s Partner First program in the United States.

Xerox says its own services capabilities and customer reach in the small to mid-size business market, combined with HP’s DaaS PC offerings, “will allow both companies to meet a wider range of customer needs.” Under the partnership, Xerox will be authorized to sell HP PCs, displays, and accessories to its commercial customers through DaaS. HP will also make Xerox’s cloud-based content-management platform DocuShare Flex available on its commercial PCs distributed in the United States.

Xerox President and Chief Operations Officer Steve Bandrowczak commented: “This announcement broadens our portfolio of products, software and services, expands the reach of DocuShare Flex, increases productivity in our toner facilities, strengthens ConnectKey’s position in our printer family, and makes us a formidable player in the IT Solutions business especially with the small to mid-size business we know so well.”

Enrique Lores, president of HP Inc’s Imaging and Printing group, commented: “This arrangement is an extension of our existing relationship and creates incremental opportunities for HP in several important areas. It further demonstrates the strength of HP’s differentiated IP and portfolio and positions the business for growth over time in both office printing and DaaS.”

The companies will announce release dates for the relevant A4 and entry-level A3 printers closer to product launches. Xerox expects to begin offering HP DaaS to U.S. customers in the second half of 2019.

Our Take

This expanded partnership between HP and Xerox is interesting for many reasons. First, HP is said to have inquired about purchasing Xerox in January 2018, before the now scuttled Xerox-Fujifilm take-over deal was announced – might this be the first step? And last year, note that activist Xerox investor Carl Icahn, who was instrumental in the scuttling of the Xerox-Fujifilm deal, had proposed that Xerox partner with what he called “under-served PC makers” such as HP Inc. or Apple.

Second, what does this mean for Xerox’s partnership with Fujifilm in Fuji Xerox? Xerox own a 25-percent stake in Fuji Xerox and sources much of its hardware equipment from Fuji Xerox. Now it will be sourcing some A4 and A3 products from HP.  Xerox CEO John Visentin had last year suggested that Xerox may source equipment from other vendors. Note, however, that Xerox has sourced some of its printer and copier hardware from Samsung in the past. Since HP purchased Samsung’s printer business a few years ago, this expanded partnership will  continues this sourcing relationship.

The new HP-Xerox partnership may also reflect the influence of a number of former HP executives recently appointed to Xerox management. These include Steve Bandrowczak, Xerox president chief operations officer; Xerox CEO John Visentin, Mary McHugh, Xerox senior VP and chief delivery officer; and Naresh Shanker,  Xerox chief technology officer and senior vice president.

Last, here’s one interesting bit of trivia: this won’t be the first time for Xerox selling PCs. In 1981, it introduced the Xerox Star, a desktop PC (based on the Xerox Alto PC) that started at $16,500 – equivalent to about $45,400 in today’s dollars.

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