Dane Anderson, who covers IT outsourcing for Gartner, says Xerox is one of many IT service providers and OEMs looking to tap into the cloud marketplace. One way major move by Xerox to diversify beyond its traditional document management business and into the cloud and IT management was its $6.4 billion acquisition in 2010 of Affiliated Computer Services (ACS), an ITO firm.
"ACS has really been doing a lot for the IT services strategy, but as cloud has picked up, there's a logical synchronization with that," Anderson says. "[But] it can be hard when your traditional business model has been selling copiers."
Xerox, Anderson says, has an opportunity to beat out other ITO providers -- such as IBM, HP, Dell, Capgemini -- in the SMB and smaller enterprise markets via its ACS business.
A challenge for Xerox and others is that the cloud can cannibalize more traditional IT outsourcing services. Anderson says Xerox can win in the market if it keeps a customer-focused vision and realizes that customers are not moving to the cloud all at once. If Xerox can get in on the game early in an enterprise cloud life cycle, it can grab long-term customers, Anderson says.