Xerox Corp. Thursday announced it is pulling the plug on its small office/home office (SOHO) business.
Over the next six months the Stamford, Conn.-based company will phase out personal copiers, ink-jet printers, and laser and ink-jet multifunction products. Laser printers and Tektronix phaser products will not be affected. Product research and development in North America will stop immediately. It will, however, continue to provide service, support and supplies for its SOHO products owners.
A Xerox spokesperson says the decisions shouldn’t be viewed as an abandonment of the reseller community. He says it is still committed to those selling to the networked office environment.
Jim Miller, president of the SOHO business group, Xerox Corp., says it thought getting into the market in 1998 was the right move, but after it began producing products the market shifted. He says growth slowed, the market became more competitive in terms of pricing, and it became difficult to finance it. In October it announced it was looking for an equity partner, but the search came up empty.
“We looked at the turn around strategy of the company and we decided it was better to focus on the core business of the office, publishing market place and production market place with colour and services and solutions,” says Miller.
“We we’re not going to be able to fund it as aggressively as we need to to make it a truly successful business.”
About 1,500 jobs are expected to be cut, 10 of which are in Canada. Miller says about 250 will be repositioned to provide supplies, support and service to existing customers.
The decision, however, won’t shake the Canadian SOHO market to its foundation.
“I think the impact in the market will be small and that goes in part to the reasons why Xerox is exiting this marketplace,” says Raymond Quan, research analyst for printer research IDC Canada in Toronto. “Penetration probably wasn’t quite what they expected in their time frame. No one likes to make these decisions, but it’s good at least Xerox has the leadership to make these kinds of tough decisions now rather than, for pride sake, continue.”
“For the long term it was the right thing to do and you’ve got to give them credit for that.”
Kevin Hiebert, president of Mississauga, Ont-based Cell-A-Net Inc., which repairs, maintains and sells Hewlett-Packard products, says one less player in market will have some impact on what he calls a very compettive market. “I think it’s good for the market; it’s an over saturated segment,” he says.
Chris Stoate is the president of Laser Networks Inc. which provides cost-per-page printing services focusing on medium to large companies. Of the decisions he says, “Any energies they can devote to that (enterprise business) would be good for them.”
“Arguably this would mean they could redirect their resources to the areas that they need to address the most which is corporate and enterprise document solutions. It makes sense.”