Monday, January 18, 2010

Xerox + Espresso is not about the box. The value is the Network.

This morning, I came across this:
@proprint Xerox to sell Espresso Book Machine: Xerox has signed an agreement to sell the Espresso Book Machine
Replying to a comment to yesterday's post I said,

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.

In a tweet this am I said this:
in Queensland: stdnts are publishing their books as part of the govs project. || With #Xerox+Espresso it would be EZ.

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