The Acquisition Of ACS Will Change Xerox' Business Model

On Monday morning Xerox announced the
planned acquisition of ACS for approximately $6.4 billion. The acquisition will
be a big move for Xerox’s Ursula Burns, who just recently took over as CEO, and
it is indeed a “game-changer” for Xerox. Long known as a manufacturer of office
products such as copiers, Xerox has exhibited strong growth from its Global
Services business unit in recent years even as other parts of the organization
faced increasing levels of commoditization. This acquisition shows that Xerox is now dedicated to a services-driven transformation
of its business.    

ACS is a $6.3B IT services company provider
of business process outsourcing (BPO), though it also offers system integration
and IT infrastructure outsourcing (BPO services represent 79% of the company’s
business). The company has exhibited decent
top-line growth in the last two fiscal years (5.9% and 6.7%, respectively), though
its BPO services performed better (7.4% in 2009, 10.9% in 2008). Xerox will no
doubt benefit from ACSs focus on two hot markets right now: healthcare and
government services.

Read more

Dell's acquisition of Perot Systems is a good move but won't be enough

Together
with some of my Forrester analyst colleagues earlier today I listened into the
conference call hosted by executives of both - 
Dell and Perot Systems - to explain the rationale behind Dell's
announcement to buy Perot for US$ 3.9 billion cash. There has been some
speculation lately about Dell possibly making such a move, but the timing and
the target they finally picked came as a bit of a surprise to everyone. The speculation was rooted in some of the statements made by Steve
Schuckenbrock, President of Large Enterprise and Services at Dell, earlier this
year where he pronounced that Dell would get much more serious around the
services business. Now, you would of course expect nothing less from someone
like Steve - after all he has spend much of his professional career prior to
Dell as a top executive in the services industry (with EDS and The Feld Group).
To this end Steve and his team finally delivered on the expectation, even more
so as this had not been the first time that Dell promised a stronger emphasis on
services.

Read more