Xerox rising from the ashes on the wings of colour

Xerox is still making printers. That message is clear, but the company will focus on document management, with a particular interest in colour.

Xerox president and COO Anne Mulcahy told a group at the recent Colours of Excellence launch that this is a pivotal time in the history of the company.

“Many people are concerned about what’s happening at Xerox, and whether we can get back to profitability,” she said.

The best way to do that, she informed everyone, is product. “Virtually every great business is/has/will experience a renewal of enterprise. Now it’s happening to Xerox. The fact is, we need to change.”

Mulcahy stressed that Xerox needs to play to its strength and resources, which she noted means colour. “We’re placing big bets on those applications and we’re pursuing them,” she said.

As recently as February, accusations of accounting irregularities and reports of high debt plagued the company. But Xerox recently announced a turnaround plan that includes growth and cost reduction. Mulcahy admitted in an interview that cost reductions will have to include more staff losses for the document company.

“We’ve announced a really structured cost savings plan. It absolutely involves layoffs, it has to,” she said. The goal of the cost reduction plan is to save US$1 billion by the end of 2001.

Part of the plan is to change the way the company meets the needs of its customers, according to Mulcahy. “It’s not about being all things to all customers, it’s about being everything to some,” she said.

She said this is about Xerox making a choice and not spreading itself too thin. “We’re going to service different markets differently.”

Mulcahy stated that Xerox intends to “own” colour in every sector. “More than 40 per cent of our R&D budget has been moved to colour. Our colour business is guided by the idea of colour everywhere,” she said. “It’s a lot of business and it’s up for grabs.”

She noted that companies will get more bang for their buck as they switch to colour. “As the cost of colour gets closer to black and white, and speed increases, colour will rule the office.”

She noted that Xerox will be looking for equity partners to share the cost of investment in some of the colour markets.

Mulcahy announced the release of FutureColor, technology directed at the print setting and in-plant printing markets. This printer, which measures 30 feet by eight feet, will ship in beta later this year.

The Xerox Phaser 2135, which has a single pass colour design, will print 21 colour pages per minute. Xerox hopes to sell it to medium to large offices. The 2135 will start at US$5,999.

Mulcahy noted that as colour becomes more of an advantage for businesses, people will not be able to continue to be competitive without it. Mulcahy predicted that by the end of this year, more than 20 per cent of the market will be on colour.