Xerox/ACS Deal: Pursuing Managed Print?

Xerox’s pending acquisition of Affiliated Computer Services, announced earlier today, has an deja vu quality to it, coming as it does a week after Dell’s move to purchase Perot Systems. Will the Xerox-ACS deal potentially impact the managed print services market? Here’s some analysis.

The Xerox-ACS and Dell-Perot Systems deals involve historically hardware-driven companies looking to dramatically expand in services. The acquired companies have some strong parallels as well — both were founded in 1988 by colorful Dallas businessmen: ACS by Darwin Deason and Perot Systems by H. Ross Perot. And, importantly for MSPs and VARs, both deals focus to a large degree on the enterprise rather than small business customer engagements.

Xerox’s decision to buy ACS for roughly $6.4 billion in cash and stock also has implications for the managed print services market. ACS’s core operation is business process outsourcing in which it assumes responsibility for running a chunk of a customer’s business along with the underlying technology. ACS’ BPO work covers such areas as human resources and finance and accounting. About 80 percent of the company’s revenue is in BPO. ACS bills itself as the “largest provider of managed services to government entities” in the U.S. But much of those services target large accounts. ACS, for example, runs Medicaid Management Information Systems for a number of states, competing for deals with EDS (recently renamed HP Enterprise Services).

The greatest MSP impact of the Xerox/ACS transaction may well reside in managed print services. HP earlier this month announced plans to tap into EDS services in a product/service offering that includes HP printers, Canon multifunction devices and managed print services. Xerox may seek to deploy ACS’ service resources in a similar way.

Employing ACS in managed print could effect Xerox channel partners, particular at the enterprise level. Last November, Xerox entered an alliance with HCL Technologies in which HCL serves as “a systems integrator for Xerox’s managed print services offering,” according to a Xerox press release. At the same time, Xerox continues to press forward with PagePack and other recurring revenue offerings for VARs and MSPs.

Contributing blogger John Moore covers Master MSPs, Web hosts and emerging opportunities. Follow MSPmentor via RSS; Facebook; Identi.ca; and Twitter. And sign up for our Enewsletter; Webcasts and Resource Center.