Xerox What About Canon?

Xerox What About Canon?

by ray stasieczko February 22, 2020

Carl and John, maybe it's time to kick HP to the curve and build a better HP. It appears the absolute stubbornness and lack of reasonable dialogue is drowning the needed consolidation conversation in a pool of complacency. It might be time to take advice from the business leader we all know, Ray Kroc - who once said.

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Unlike the fast food industry the Print Equipment and Services Industry is shrinking and must consolidate then diversify. Those who consolidate first will position themselves to be the fittest and drive the market's new future. It seems as HP believes they do not need to advantage themselves with a consolidated merger. It seems as they believe their survival in a declining market will come from solitude, an approach which most would agree is totally against the realities of the marketplace. Will this mis-calculation will become their achilles heel?

Here’s my thoughts on an alternative plan which could provide Xerox the hose Ray spoke of.

We all remember when Ricoh bought Ikon. Everyone in the industry said wow Canon missed a great opportunity, and this will cost them. The year was 2008; here's a paragraph from a Reuters article.  

TOKYO (Reuters) - Copier and printer maker Ricoh Co Ltd will acquire U.S. office equipment distributor Ikon Office Solutions IKN.N for $1.62 billion, in what could be a blow to rival Canon Inc in the key U.S. market.

Well, now it's 2020, and could Canon again have an opportunity to change the course of an industry? Let's explore a possibility that I see as the HP executive leadership, and its board continues denying the realities of the market’s needed consolidation.

I was a big fan of this merger; however, the HP Leadership's on-going arrogance to the status quo is challenging my confidence in HP’s future. So, maybe it's time to imagine something different. 

Let’s Imagine a Canon Xerox partnership a partnerships which tells HP good luck with Samsung.

Canon, this could be your chance to redeem your missed opportunity in buying Ikon back in 2008. Of, course partnering with Xerox would be a much bolder and greater opportunity. Where Ricoh failed with Ikon Canon could succeed with Xerox. 

Think of what Canon and Xerox would bring each other. Here are a few things I see. 

  1. Direct to market sales and service for Canon, replacing way more than they lost to Ricoh in 2008. Xerox is the largest direct and dealer channel in the industry.
  2. Xerox needs a Manufacturer with the recent divorce of Fuji, and Xerox would benefit significantly with the Canon portfolio. Also, Keep in mind that Canon's market cap is very close to HPs. Canon has the depth and resources to bring alternative products to market as HP claims they will. Canon- 24.85 High24.85 Low24.62 Mkt cap 32.90B HP- 22.70 USD +0.060 (0.27%) Mkt cap 32.99B
  3. A Canon Xerox relationship would create a position to wipe HP Print off the map. Xerox, who currently services more HP Printers under contract (MPS) Managed Print Services, then HP themselves. Remember, Canon manufactured nearly all of the millions of HP printers Xerox services and, more importantly, provides supplies to as part of the Xerox MPS Contract. How would HP address their OEM Toner without an agreement with Canon. Maybe HP thinks all those Canon made HP printers will be replaced by HP's Samsung printers. Most in the industry would bet against that.
  4. Canon and Xerox both understand the dealer and direct go to market strategy and have much better relationships with the dealer community. Three years ago, HP declared when they bought Samsung, they were going to disrupt the A3 business. Today we don't see a whole lot of disruption from HP. Some questions How many new dealers has HP contracted with? How many competitive A3's have they replaced?
  5. The Xerox equipment made by Canon many would say is much better than HP's Samsung line and would provide a complete portfolio.
  6. Now that we can visualize this. Think about this. Xerox and Canon come together than go buy HP. Xerox/Canon would be a combined 40 Billion in market cap. The HP argument about the little buying the big becomes mute. The reality is an industry needing consolidation will consolidate and HP might find themselves on an island of obsolescences if they continue fighting the inevitable.

John Visentin and Carl Icahn obviously have options and soon may give HP what they want leaving them to complacency. A place where A different Xerox partnership defeats them. 

Another manufacturer which would be just as disruptive as Canon is Fuji. Ok, many are saying Fuji they already tried that. No they did not try what I am suggesting. Think about Xerox and Fuji coming together to buy HP. Those six paragraphs above would be the same for Fuji. After all it seems as Xerox and Fuji settled their differences pretty quickly. Maybe there was a reason most refuse to imagine.

The saying, "Let's see what the future holds," should not be a waiting game. Instead, it should be the prelude to opening one's imagination. 

Many in our channel are imitating the HP Leadership. They sit in silence and hope yesterday continues on a little longer. We are witnessing many of the industry's leaders and analysts acting more like parrots, only repeating what they here never articulating what they imagine. Very few have the imagination or the willingness to explore what could be based on what should be.  

My friends, it will be those who can imagine and those who refuse to accept the status quo, which will seek out what could be. Those interested in the exploration follow me or, more importantly, join in and together, let's discuss the route on the journey towards constant relevance.

In Closing: I wanted to share for those who may not know as my audience continues to grow. Some of what I have imagined and how those visions came to light. I believe the future is so much less threatening for those who have been there in their minds first.

Here’s some of the industry’s greatest disruptions which I discovered while traveling through the future.

In a 2014 interview, I predicted Xerox would split divesting themselves of their services business. Three years later, Xerox splits its business. Here’s a link to the interview.

In 2017 speech at Remax summit in Zhuihu China, I told the audience HP Should buy Xerox and listed the reason why. Yes, I was the first one to say and argue the case. Here's an article published by RT Media regarding that.

In 2018 In a video, I predicted that a major retailer such as Staples or Office Depot would buy a mega dealer inside the Imaging Channel. Well, we all know that story, which came to reality in February 2019 as Staples bought DEX Imaging Here's a link to the video.

In the spring of 2018 I started the A4Revolution at a Lexmark roadshow. This started the industry's dialogue on the coming disruption which A4 will cause the A3 world of the channel. Here's the article.

In early 2019 I predicted the likelihood that Thoma Bravo, after purchasing ConnectWise, would roll Continuum into ConnectWise positioning ConnectWise to one day go direct to market with IT Services. Thoma Bravo did combine the two in late 2019, and I still see a path for a ConnectWise direct global business model. Here's a link to an article published on the subject. 

Well, there's a few of the things I saw coming. My friends it has never been more important to explore with open minds. The constant discussions of how things won’t work are stifling the channels innovation.

I welcome all to join me on "The End Of The Day With Ray!" My Video Series posted most days on Linkedin and YouTube. Over the last year, our audience continues to grow, and I am greatly appreciative of all those who support, follow and understand this. 

"Status Quo is the Killer of all that will be invented." 


Ray Stasieczko CEO/Founder TEASRA,The Innovation Channel and Host of The End of The Day With Ray! 

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