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HP and Xerox Partnered Up - What Does That Mean?

HP and Xerox have been frenemies since the 20th century. Both manufacture A4 and A3 printers, but they’re also longtime partners in the OEM space. Each has a focus on both consumers and enterprise users, but they excel in different technologies.

This partnership (announced in June 2019) has Xerox sourcing certain A3 and A4 hardware engines from HP (most of which use Xerox ConnectKey controller software) in exchange for supplying toner for HP products. In addition to sharing technology, they also partnered in the Device as a Service (DaaS) market. 

Let’s dive into what the HP-Xerox partnership means for the print business.

Revitalizing Samsung’s Print Technology

Although the partnership is between Xerox and HP, it revolves around Samsung technology. Back in November 2017, HP completed a $1.05 billion acquisition of Samsung’s print business. The deal included an existing OEM partnership Samsung struck with Xerox back in 2004. 

Samsung had already been supplying hardware for the majority of Xerox’s A4 printer lineup. This partnership essentially solidifies the pre-existing partnership that was already in place. So why is it important?

For starters, Xerox already partnered with Fujifilm to create Fuji Xerox all the way back in 1962. This joint venture partnership creates over 80% of the engines currently used in the products sold through Xerox Corporation’s transactional and contractual channels.

The partnership with HP gives Xerox more bargaining power to negotiate better deals with Fuji Xerox. It effectively cuts off a major revenue stream in the western world, while giving HP a host of new ways to serve its enterprise customers.

What to Expect from the Merger

Both HP and Xerox have a lot of office equipment installed in businesses around the world. So, let’s break everything down to what it means for end-users.

Will Print Hardware Change?

Technology is always evolving, but there’s no need to worry about this partnership making existing print technology obsolete just yet. The performance on the hardware side won’t be very noticeable to anyone but printer technicians. 

Xerox-branded laser printers will be using versions of the same Samsung-engineered hardware on the inside. They will still use the same Xerox toner, while HP laser printers will start integrating Xerox toner as well. Xerox is also rolling out HP’s DaaS platform by the end of the year, which will expose HP to its strong small business user base.

How Will Printer Performance Change?

The software side will see the biggest effects of this partnership. 

Xerox’s ConnectKey platform is an app-based virtual assistant that streamlines workflows and makes cloud-based managed services possible. Installing this ecosystem on HP hardware opens on-device capabilities to interact with business apps like Salesforce, QuickBooks, and Concur. This is in addition to the Dropbox, OneDrive, and Box compatibility HP already had. 

Meanwhile, Xerox’s cloud-based Docushare Flex content management platform will be available on HP’s commercial PCs. These PCs are already preinstalled with HP’s TechPulse software that proactively monitors device health for diagnostics. Now they’ll have much more powerful document management capabilities too.

Keeping Both Businesses Competitive

The OEM partnership between Xerox and HP is expected to create waves across the industry. Aside from Fuji Xerox, Canon also has an existing OEM deal with HP for its printing lasers that could be jeopardized. It exposes both companies to each other’s business customers while giving Xerox a much-needed injection of revenue.

Xerox has seen revenue slipping entering 2019, and its negotiations for a merger with Fujifilm ended up in an aggressive court battle. In addition to fighting a $1 billion lawsuit stemming from that, the company was looking to unload $3.5 billion in debt by selling its consumer financing arm.

HP, on the other hand, just settled multi-million lawsuits involving it HP printer firmware, ink cartridges, and even faulty sales commission tracking/pay. It also needs new revenue streams to remain competitive in the print business.

A Birds-Eye-View of Technology

It’ll be interesting to see how Epson and Brother respond, but for now, HP and Xerox’s partnership represents both companies’ dedication to expanding the print business in the 2020s. Advanced technologies like 3D printing, virtual and augmented reality, blockchain, artificial intelligence, and the Internet of Things are creating a fourth industrial revolution. 

HP and Xerox are strengthening ties to support all of these technologies in a new age when IBM’s quantum computer is disrupting encryption. Technology is advancing faster and further than ever before, and businesses are leveraging these technologies to disrupt the old guard. Even major global enterprises like HP and Xerox aren’t safe.

Contact Edwards Business Systems today to learn more about how to navigate and take the lead using modern technology.

October 1st, 2019