Xerox 2009 Annual Report Download - page 6

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We point this out because it’s critical to our future. We innovate
today so that we can help our customers tomorrow. It’s at
the very core of what Xerox does, why we have sustained our
leadership in innovation for six decades and why we have been
able to widen the gap against our competitors in recent years.
Traditionally, innovation in our business applies to our hardware
and software technology. But it also helps differentiate our
service offerings and is especially relevant as we exploit the huge
market opportunities in business process and IT outsourcing.
Scaling in Services
Many of our clients are increasingly seeking service providers
that offer a full range of solutions – from the management
of their print services to the management of work processes
in their back and front offices. Large enterprises also demand
global capabilities and global account management. And, our
customers are demanding more value from their technology.
They want their hardware investments married with software,
and they want total packages that solve a problem, cut their
costs, simplify the way they get work done – or a combination
of all three.
We understand these marketplace dynamics very well. Instead
of watching them play out in front of us, we knew the better
approach was to become a bigger, broader player in the game.
The reason is clear: in a mature hardware technology market,
the larger growth opportunity is in services.
“Services” is a broadly defined word. As we look at it in our
document management business, services comprise both the
technical support of our equipment and, as important, the
software and outsourcing that relate to workflow in a business.
For example: Through our enterprise print services, we help
customers save up to 30 percent on their document costs by
managing all the devices in their workplaces – regardless of
manufacturer – and by handling the supplies, maintenance and
support that go along with them. (It’s important to note that
we continue to be positioned by Gartner, Inc. in the Leaders
Quadrant in the “Magic Quadrant for Managed Print Services
Worldwide” – meaningful industry recognition that reflects our
strong leadership in this growing business.)
So, in scaling our services business, we started with following
the document, where we have knowledge and expertise that no
one else can match. That focus led us quite naturally to business
process outsourcing (BPO). Most business processes are driven
by documents, which gives us the opportunity to differentiate
ourselves from competitors – most of whom are IT providers.
Post-sale Revenue
(included in total revenue – millions)
11,182 11,438
12,475 12,929
11,629
Color Revenue
(included in total revenue – millions)
4,928
5,578
6,356 6,699
5,972
485*
’05 ’06 ’07 ’09
Net Income – Xerox
(millions)
978
1,210
1,135
526*
’05 ’06 ’07 ’08 ’09 ’05 ’06 ’07 ’08 ’09
* See Page 7 for the reconciliation of the difference between this financial measure that is not in
compliance with Generally Accepted Accounting Principles (GAAP) and the most directly comparable
financial measure calculated in accordance with GAAP.
’08
985*
230*