Sunday, January 17, 2010

My bet is that the Espresso Deal will do for Xerox what the Docutech did back in the day.

The conversation started on Friday with the announcement that Xerox will be selling the Espresso. On Friday Noel Ward did a story at GAM and reported in the UK. On Saturday, Cary Sherburne did a post at PrintCEO. All of the stories are well worth the read.

At any rate, here's my two cents at PrintCeo.

When I saw the announcement it recalled the feeling I had when I saw the first story about the Docutech in the Wall Street Journal.

It seems that this deal is the docutech reinvented for a networked society. The money sentence to me is “we believe fully distributed solutions will become an integral part of the supply chain.”

It’s the same idea of a mature “distribute and print” model the industry has been talking about for years. But until the web matured it was a vision instead of a strategy.

O’Reilly has said that the web is now moving into the real world. He calls it “Web squared.” QR codes are an on ramp from the print to the web. The Espresso/Xerox deal is one off ramp from the web to print.

One can only assume that once the Xerox engineers take a really close look at the output box, it will get more and more efficient. One can also safely assume that if Xerox sales gets involved it will get less and less expensive.

One interesting question going forward is how Xerox will integrate selling Espresso with their PSPs. The natural would be to sell through the MFP channel.

I’m hoping they are figuring out a method to use their Premier Partners to add the Espresso offering to increase the PP value to their clients.


  1. The difference as I see it is that with the Docutech you had a platform that could not be readily duplicated producing output. Maybe I missed it, but I have not seen anything that makes me think that the deal between Xerox and Espresso is exclusive, so all that we have is Xerox providing an engine today. In the end all Espresso wants is a piece of paper delivered to their input slot, this is not as hard as engineering, selling and supporting a DocuTech system. There are several manufacturers who could deliver this in short order for the same, or less money than the Xerox box announced here. Sure its a nice thing in a press release, but lets not assume that in this decade the ability to deliver 110 sheets of paper to a slot for another companies finishing gear to process is a world beater.

  2. I agree that if the name of the game was selling boxes it's not a big deal. But the way I read the releases Xerox will be selling the Espresso, not merely supplying the boxes.

    That's a much bigger deal.

    The defensible value of the Espresso are the contracts that Jason Epstein has made with the publishers. Once those are in place, I agree that the machinery can be easily replicated by any other vendor.

    With Xerox's purchase of ACS they have made it crystal clear that going forward the value is MPS. If Xerox is the channel for selling expresso how hard would it be to role in a special deal for including an Espresso as part of an MPS contract?

    Consider if Xerox adds an Espresso to their offerings in education and government MPS. I would keep a look out to see if they get one of the school book publishers to come on board. If and I think when they do, it means customized textbooks delivered with no logistics and very little sales expense directly to the school building or district.

    Ursula and her team realize that margins on boxes and toner are going to be very slim. But margins on MPS are defensible and supply a nice stream of recurring revenue.