HP and Xerox will need to address their "fundamental problem" of having no obvious future advantage, partners warn as the two firms hash out a potentially joined-up future.
As tense exchanges between the two firms continue, with Xerox Thursday threatening to take its bid directly to HP shareholders after HP's board rejected the print giant's opening bid, partners are questioning what the future might hold for a joined-up version of the two hardware behemoths.
"The two of them together can certainly cut costs, but that doesn't address the fundamental problem of how are they going to build a company that is focused on emerging technologies and growth technologies, which neither of their product lines are?" Mike Maddox, president and CEO of Lansing, MI-based channel partner ASK told CPI.
While HP has its 3D printing devices, Maddox points out that neither firm has a strong foothold in the world of emerging tech.
"I don't see either one of them as a leader in emerging technology, so although it could be an efficient tie up, there's no obvious future advantage, so to speak, in terms of [them both having] the same aging technologies and the way the industry is headed."
Others agree. Carl Mazzanti, president at Hoboken, NJ-based eMazzanti Technologies, an HP and Xerox partner, told CPI that "there'll be a lot of innovation that needs to take place" at any merged company.
Indeed, Maddox notes that the workstation - one of HP's core products - may not have a future, so without innovation and diversification, the path of the merged company is far from clear.
"We're becoming a cloud world and an increasingly digital world. Thirty years from now is there even going be a workstation? I think this could be a move out of desperation because their foundation is shaking. There's no value-add component [in these offerings]…"
Still, he points out that the two companies are huge with billions of dollars in revenue annually, so a change of focus could spell success and longevity.
"If they can create enough efficiency and get rid of their leverage and create emerging technologies in the cloud, digital transformation or 3D printing, I think there's probably a myriad of opportunities that they can capitalise on with their size and scope and reach. Hopefully, that's what their focus is by saving costs through a merger."
There may also be issues regarding the pace of the different product suites.
Mazzanti notes that printers and PCs are generally on a different refresh cycle, which may cause issues for Xerox.
"I'm not sure how well Xerox will do managing a PC business. It's a different product portfolio - there's a different speed of innovation on computers than there is on the printer business. Printers stay around three years; models are around for multiple years.
"PCs on the consumer side are moving every six months, with massive changes every six months," he said.
When it comes to the two vendors' channels, there are also marked differences in the relationships between the two vendors and their partners, which is at least good news for Xerox partners, he added.
"Xerox has become more channel focused than it was primarily in the past [but] HP is by far the industry leader in channel focus.
"So for a partner like us it makes a ton of sense, because it expands our printer lineup with the same partner program that we already like and it would immediately give us a bigger product portfolio that would hopefully carry the brand name."
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