Xerox CEO Says Color, Services, Partnerships Are Keys to Drive Growth, Customer Value; New Services for Large Enterprises, Products for Small Businesses; OfficeMax Signs $18 Million Contract

Business Wire, Oct 27, 2005

BOSTON -- Xerox Corporation (NYSE: XRX) Chairman and CEO Anne M. Mulcahy today announced a set of offerings and customer contracts that demonstrate how Xerox is executing a growth strategy driven by increasing demand for document management services and for color in businesses small to large.

At the company's annual briefing with industry analysts and research firms, Mulcahy introduced new assessment services and software to help large companies increase the productivity of their printing operations by up to 40 percent and reduce costs by 20 percent. For small and mid-sized businesses, the company launched its most affordable black-and-white office multifunction product yet - starting at $399 - and a competitive color laser printer priced at $499.

Xerox's leadership in color and services continues to draw customers. OfficeMax, one of the nation's largest office superstores, signed a four-year, $18 million deal that will put 1,280 Xerox color products in retail stores across the United States. Following a review of competitive color systems, OfficeMax selected Xerox DocuColor 240/250 color multifunction systems and Xerox CopyCentre(R) C2636 digital color copiers to provide high-quality in-store printing services.

In a five-year contract at Dow Chemical Co., Xerox is helping to upgrade global document management systems with about 3,500 new Xerox color and black-and-white digital multifunction systems that will provide greater reliability and cost savings.

Building on market successes, Mulcahy said Xerox is pursuing a combination of "new and reinvented" opportunities designed to better serve customers and capture a bigger slice of an estimated $112 billion market.

"We have new opportunities in document consulting services to help customers take costs out and put value into business processes that revolve around paper and digital documents," Mulcahy said. "We are also reinventing the fast-growing color document market through superior digital color technology for small and medium-sized businesses, large enterprises and print providers."

Color Growth

Mulcahy noted that Xerox's flagship iGen3(R) Digital Production Press is gaining momentum as the high-end digital color press of choice for commercial printing customers worldwide. More than 17 iGen3 presses were sold over seven days at the Print 05 exhibition last month in Chicago.

Xerox is the industry leader in color equipment sale revenue, according to research firm IDC.(1) The company has a No. 1 market share position in high-speed digital production color and black-and-white cut-sheet systems that produce brochures, invoices, manuals and other documents on-demand.(2)

To expand its leadership position, Mulcahy said Xerox has placed top priority on improving all kinds of customer interactions. A series of Xerox Lean Six Sigma projects has been launched to make it easier and more effective to work with Xerox. Global process improvements are under way in areas such as account management, billing, and customer support.

"Growth is not just about customer acquisition," she pointed out. "It's about intense customer collaboration - providing Xerox people, processes and technologies to deepen relationships and solve real customer problems. By doing that better than anyone else, we can provide an unbeatable, sustainable advantage."

Leading with Services

To better serve customers in large enterprises, Xerox is expanding services designed to make the business of making documents less costly and more efficient. Through new Production Optimization Services, Xerox is helping companies make the most of their digital and offset printing technology investments. Lean Six Sigma assessment tools and simulation software help Xerox consultants identify inefficiencies in print and mail operations, eliminating wasteful steps and automating the way documents are produced and distributed.

For example, First Data Corporation (NYSE: FDC), a $10 billion electronic commerce and payments leader, turned to Xerox to streamline its printing processes and facilities. Using a tool called Lean Document Production developed in Xerox research labs, Xerox redesigned First Data's in-house print shop, increasing productivity and maximizing how equipment is used.

"Xerox's analysis and recommendations helped First Data reduce expenses and, more important, improve the quality of service we can provide to our output services clients," said Tim Rosenthal, senior vice president, Output Services, First Data.

Xerox's Production Optimization Services join other services offerings, including Xerox Office Services such as Office Document Assessments, fleet management and help desk support. The company's value-added services business is ramping up with nearly 100 multimillion-dollar contract signings this year around the world.

Partnering for Growth

To advance its document management strategy, Mulcahy emphasized the growing role of partnerships to deliver Xerox technology and services. Xerox is currently working with leading companies such as Accenture, CapGemini, EDS, Enovation and others to expand its market reach. Partners also are increasingly involved in other areas, including research and development, product distribution and administrative processes.