Xerox 2012 Annual Report Download - page 18

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16
Our strategy and business model fundamentals translate into the
following 2013 priorities:
• managing our Services business for growth;
• maintaining our leadership in Document Technology;
• managing our business with a focus on operational excellence; and
• delivering strong cash flow and returning value to shareholders.
Acquisitions
Consistent with our strategy to expand our Services offerings through
acquisitions, we acquired the following companies in 2012:
In July 2012 we acquired:
• Wireless Data Services (“WDS”), a telecommunications technical
support and consultancy firm headquartered in the U.K. WDS uses
a proprietary cloud-based platform called GlobalMineTM to capture,
analyze and manage millions of technical support interactions
across thousands of different types of mobile devices.
• Lateral Data, a leading e-discovery technology provider based in
the United States. Lateral Data’s flagship software, ViewpointTM,
brings simplicity and affordability to e-discovery by enabling
corporate legal departments and law firms to manage the entire
e-discovery lifecycle using a single, in-house solution.
In January 2012 we acquired:
• LaserNetworks Inc., a provider of MPS solutions that include print
device tracking, centralized service and supply management and
document routing. LaserNetworks is headquartered in Canada.
An example of an advantaged vertical is healthcare, where we have
built a $2 billion business that touches every aspect of the industry –
government, provider, payer, employer and pharma. In addition,
we apply our innovation to differentiate our offerings. As a result, we
are positioned to capitalize on current industry trends, including the
changes presented by health reform. We also view transportation,
wireless communications and graphic communications, among
others, as advantaged verticals in which we have a leading position,
strong capabilities and attractive market opportunities.
• Disciplined Management of Portfolio – Xerox has the most broad
and diverse set of offerings in the Services segment and the most
complete product portfolio in the Document Technology business.
Our acquisitions are targeted at businesses that will increase our
Services capabilities, position us in attractive Services segments
and provide us with a greater global presence. We will continue
to focus on managing our portfolio to maximize profitable growth.
• Leverage Document Technology Leadership – Xerox is the market
share leader in the Document Technology market. We led the
establishment of the managed print services (“MPS”) market and
we continue to lead this area of market growth. Our MPS offerings
continue to expand, and now consist of a continuum of offerings
that serve large enterprise down through small and mid-size
businesses. In addition, we leverage our leadership in Document
Technology to help grow our business process outsourcing and
IT outsourcing businesses.
• Expand Customer Relationships – We expand customer
relationships through a strategy of “penetrate and radiate.” As
we establish relationships, we prove our capabilities and then
work with the customer to determine other areas where we
can improve their operations and drive down costs by managing
non-core parts of their business. Our wide array of Services offerings
enables us to do this effectively and results in a win-win for Xerox
and our customers.
• Invest in New Services – Our Services acquisitions are a key
element of our strategy. We target companies that provide new
capabilities, offer access to adjacent services areas or expand our
geographic presence. We will continue to invest in new services to
grow our business profitably.
Annuity-Based Business Model
Through our annuity-based business model, we deliver significant
cash generation and have a strong foundation upon which we can
expand earnings.
The fundamentals of our business are based on an annuity model that
drives significant recurring revenue and cash generation. Approximately
84 percent of our 2012 total revenue was annuity-based revenue that
includes contracted services equipment maintenance, consumable
Annuity: 84%
Equipment Sales: 16%
Revenue Stream
Our Business
84%
16%
supplies and financing, among other elements. The remaining
16 percent of our revenue comes from equipment sales, either from
lease agreements that qualify as sales for accounting purposes
or outright cash sales.