While Xerox has been reinventing itself as a “document management” company, the name that became eponymous with photocopying has quietly shifted into lucrative health care industry. Its acquisition of outsourced services vendor ACS [Affiliated Computer Services], announced today, will further its ambitions in this market.
The deal also perpetuates a trend several years in the making, epitomized by HP’s acquisition of EDS last year and Dell’s deal to acquire Perot Systems earlier this September. These deals allow equipment vendors to diversify their revenue streams, and append higher-margin services deals to their hardware sales. It’s odd when you consider that only a few years ago the pendulum was swinging the other way (as exemplified by IBM’s 2004 divestiture of its hardware business to Lenovo so that it could focus on software and services). Clearly these deals are as much a function of external circumstances as they are deeply-held business philosophies professed by the executives during their press conferences.
To read more, please see Xerox Joining Health Care Fray on my Technology Insights blog at BNET.