By Editor Morten B. Reitoft

Yesterday the world witnessed the final agreed and signed 'divorce-paper' between Xerox and Fujifilm. Though the relationship lasted for many many years, this didn't come as a major surprise. After the failed attempt to merge the two giants, the fall of the former CEO Jeff Jacobson, lawsuits, and to be honest a not very nice 'picture' to follow - the agreement seems like the only potential output of that story. 

So far, so good.

Then a few moments ago I tuned into CNN, with a story about an acquisition of HP by Xerox. The story origins from The Wall Street Journal, and regardless of how much this is an exciting story from a business perspective, I can't help speculating about what this would mean to the printing industry. Before speculating about that, let's speculate a little on the background why this should make sense.

Both Xerox and HP are significant manufactures of digital printing equipment. Still, the printing industry is not exactly growing, and of course, both companies will have to consider the best path for their future. HP announced a few months ago the layoff of up to 9.000 employees, which even for HP is a very high number. Xerox has been quieter in that respect, but it's a fact that the next generation of digital printing platforms will require huge investments, the competition is stronger than ever, and the sales are really not as good as both have hoped for. The HP-Indigo platform is still considered among the best. Still, Indigo flagships probably see higher competition than ever before with products like Konica Minolta KM1, and Canon i300 and many more in that segment on the radar. When Landa starts to deliver volume, how will this impact HP? Xerox released the Iridisse more than a year ago, which has received good reviews and yes, deliver stunning results. Xerox is also launching new inkjet platforms into a very crowded market, which at drupa probably will see new players taking a bite of the market from all sides. Recently Kyocera announced their cut-sheet inkjet, and with a mature OEM market for inkjet print-heads, we probably haven't seen the last vendor looking to get a share of this market. So merging the two companies could probably give them an advantage over the others, especially since the combined size would leave HP/Xerox as a truly major global player. Combining R&D, distribution, service, administration, etc. may be a good idea. However, the first thing that comes to my mind is the question whether these two, in my opinion, very different cultures can meet, and deliver value to the industry.

I find it difficult to imagine these two cultures merged into one, but of course, over time, things can happen. If a merger, however, should be valuable, the headcount probably has to be smaller, and can you imagine what fights a combined organization would have over whether it's former Xerox or former HP staff that are laid off? I have worked in smaller printing companies that merged, and with even just a few hundred people on the payroll, this is a major consideration. 

From a technology and customer perspective, I also find a combined Xerox/HP very difficult to identify. One thing is, of course, the almost religious commitment to either of the two vendors, but at least in Europe, it's also a fact that the business models for HP and Xerox are quite different. I used to work at Xerox in the Nordic MANY years ago, and with a very aggressive go-to-market strategy, Xerox appeals to salespeople that seems to be way more interested in short-term wins. This is, of course, not fair to the entire world, but it's a fact that Xerox has been way more 'creative' than other vendors in their sales approaches. Where HP, to some extent, may have sold machines on the fact that they are the defacto best-of-breed printers, will challenge some, if this approach changes to the Xerox culture. On the other hand, Xerox has been very good at creating many different machines for many different segments in the market. 

It will, of course, be interesting to see whether this is a balloon or for real, and under what circumstances this can happen. Speculations about how Xerox should be able to deliver both stocks, and cash, to buy HP is still subject of speculations, and let me just give my thoughts into this - totally unsubstantiated, and pure guessing.

Wouldn't it make sense to see a merger consisting of HP, Xerox and EFI? Wouldn't that be a giant, where the people, the money, the funding, and even the product mix, could make sense? Well. The months to come will be interesting!

In the news:
https://www.reuters.com/article/us-hp-m-a-xerox-hlngs-idUSKBN1XG0EQ
https://www.piworld.com/article/printing-industry-shocker-xerox-pondering-27-billion-offer-acquire-hp-inc/
http://whattheythink.com/news/98206-wsj-report-xerox-considers-takeover-hp/