Xerox Corp, the third hardware vendor after HP and Dell to diversify into services with a multi-billion acquisition, will base its ‘document management services’ for emerging markets in India.
In a big push to get into the services market, Xerox had acquired the world’s largest diversified BPO firm ACS for $6.4 billion (Rs 30,000 crore) in September last year, two weeks after Dell acquired BPO operator Perot Systems for $3.9 billion. Both acquisitions were seen as reactions to HP’s acquisition of IT services firm EDS in 2008, forcing hardware vendors to tie in with services companies to compete with integrated firms like HP and IBM.
ACS, the biggest independent BPO firm in the world, had been facing heat from Indian vendors like TCS, Genpact and Infosys due to the higher cost of its considerable employee base in the US and Europe.
For example, out of around 75,000 employees, ACS — which continues to be run as a separate Xerox-owned firm — had around 15,000 employees in the US. Its India centres, Kochi and Bangalore, accounted for just 4,200 employees.
Competitors HP-EDS and IBM already have a significant part of their manpower based in India, especially for BPO, giving them a cost advantage.
Last week, Dell too announced that a large part of the growth of its newly-built services business will be based out of India.
Xerox hopes to bundle ACS’ BPO offerings with its own printing and document management services and vice versa.
Xerox’s earlier business model of outsourcing just the company’s printing or archiving function usually comes under threat when its client engage a BPO firm for its other needs, forcing the company to bundle both services.
The Chennai centre, which will run in co-operation with academic institutions such as the IITs, will help improve Xerox’s services line up. It, however, refused to give details about its hiring plans for the ‘innovation centre’, pointing out that it will be a collaboration centre instead of just an in-house research facility.
The company will host student fellowship and internship programs at the centre, besides employing in-house staff.
It will partner with IIT Madras to research the application of cloud computing or Internet-based techniques to improve its existing document services and develop solutions for small technology-based businesses in rural India. In co-operation with Bangalore-based Indian Institute of Science, it will explore the application of machine learning and ‘game theory’ to improve the performance of online services.
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