Monday, May 11, 2009

The Battle of the Titans: Xerox v Ricoh - The Color Cube may turn out to be the shot heard round the world.

Art Post says "Who's afraid of the Xerox Color Cube?"
anon says " I am a top performer at Ricoh, Xerox's biggest competitor... and I'm scared"
Greg Walters says " "The Xerox ColorCube is not a contender, it is a game changer."

The hardware is the MFP. The field of battle is MPS. The prize is control of the enterprise printernet.

In the Asian theater it's Fuji-Xerox v Ricoh. In the Euro language theater it's Xerox v Ricoh v HP?. The Middle East, as usual, is up for grabs.

Here's how it looks to me from 30,000 feet in New York City.
Xerox brings office DNA to the battle. Fuji-Xerox and Ricoh bring engineering DNA to the battle. For years the lines have been forming. Xerox buys Global who buys ComDoc and picks up independents as available. Ricoh buys Ikon and delivers a body blow to Canon. Ricoh has the deep pockets to introduce special incentives for new MPS business. Xerox buys Tectronics solid ink and improves solid ink until they can release The Color Cube.

I don't know enough about Ricoh on the ground, but Xerox comes from a base in large scale organization where they compete with HP for the big MPS deals. That business is under threat from other OEMs. But the real threat is the massive reorganization of formal education, health and government. The old rules are slipping away. The new rules are not quite yet clear but mostly likely will be about transparent competition on price, service, and expectation of continuous improvement.

The wild cards are the Independents.
This is a ground war. In a ground war under the conditions of information transparency the advantage goes to passion driven ground troops. The measure of passion is morale. Given the disastrous decisions by the globals to "buy channels" and ruthlessly reduce headcounts, they may have irreparably destroyed morale.

The independents live on passion. They hunt. They eat what they kill. They are local. They respond in real time. They are totally opportunistic in using the most appropriate hardware to get the best solution for their addressable clients. Like the rag tag American rebels who defeated the well organized British in 1776, they thrive when they are ignored. Living off the land, making up the rules as they go along, they driven by the passion of creating a better future for their families.

You can't win a war with mercenaries. The British couldn't do it in 1776. The Americans couldn't do it in Iraq in 2009.

Greg Walters said
Let us not forget the end user really won't care what the technology is - like always, they will want to print or copy in color or B/W as easily and as simply as possible, at a reasonable cost.
Greg lives at the edge of Independent MPS.

Note that he says issue is not the lowest cost. The issue is a "reasonable cost." The exact dollar amount of "reasonable cost" depends on local conditions and the specific solution that a passion driven VAR presents to specific people. Boxes, on the other hand, need to have the lowest TOC to thrive. Such is the life of the OEM. But MPS are VARs. VARs maintain margins through the addition of creative deals, seamless solutions and an agnostic combinations of boxes.

All wars, like politics, like education, like public health, are won or lost at the local level. One customer, one student, one victim of H1N1 virus at at a time.

The view from my IRA
I have bets on both sides Xerox and Ricoh. As the facts on the ground emerge through the smoke of battle, I'll invest more on one side or the other.

Here's how I think it will play out. Xerox and Ricoh will be forced to divert some resources from the skirmish around the commercial printing industry. That will leave the field to Oce Heidelberg, Komori, Goss and the other players in the various production printernets.

The dark horse is Kodak. If they can focus on their advantage in the offset production workflow, they might turn out to be the UNF - User Network Facilitator - for commercial print. But the competitor for that prize is Donnelly which is trying to go it alone.

At any rate, it's a great day in the never ending fight for Truth, Justice and My IRA.

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