The print vendor announced the acquisition of LaserNetworks – widely acknowledged as Canada’s largest independent managed print company and one of the largest IT solution providers in the country – this week.
“This is a strategic market for us, and we’ve been able to scale our offerings,” said John Quinn, vice president of corporate communications for Xerox Canada. “We want to grow our footprint in the SMB market.”
LaserNetworks will continue to operate under its own brand as a wholly owned subsidiary of Xerox Canada, and the company will retain all of its 189 employees, the companies said.
Chris Stoate, president of LaserNetworks, will continue to lead the company. He said the decision to sell his company same from “a number of things that limit the growth of a private company.” Specifically, the deal puts the LaserNetworks name and value proposition on a much larger sales force – that of Xerox Canada. The deal also gives LaserNetworks access to products at the high-end of Xerox’s offerings that were previously off-limits, allowing it to expand its offerings in the midmarket and enterprise market.
As well as expanding Xerox’s presence in the SMB market, Quinn said the acquisition gives Xerox customers in a number of key new verticals, including legal and oil and gas.
Vendors purchasing managed services providers, and managed print providers in particular, is hardly a new phenomenon. Last year, rival HP snapped up U.S.-based managed print company Printelligent, while office imaging company Konica Minolta purchased managed services giant All Covered. But it’s the first deal of its kind in the Canadian market, and it’s the scale of the deal (and LaserNetworks’ presence in the market) that makes it remarkable.
Kevin Hiebert, president of the National Print Services Alliance, a network of managed print services providers across Canada, and president of Mississauga, Ont.-based MPSP Cell-a-Net Printer Services, described the purchase of LaserNetworks – far and away the largest independent managed print company in Canada – “a game-changer.”
“There really isn’t a strong number two – it really is LaserNetworks and everybody else in the market,” Hiebert said.
Business as usual?
Talking about the impact of the merger, the term “business as usual” was used a great deal, by Quinn and Stoate, both of whom maintained LaserNetworks would continue to offer vendor-agnostic services. Xerox has heretofore been a major LaserNetworks vendor partner, but far from the only partner – it also worked extensively with products from HP, Canon, Lexmark and others. Stoate said that approach would continue as LaserNetworks becomes a Xerox company. “We will continue to supply customers with what they want,” Stoate said.
Stoate said that the increased size and scale of LaserNetworks as a Xerox company, as well as its “more compelling offerings” possible post-merger should represent an opportunity to other print vendors working with LaserNetworks.
But for Hiebert, whose NPSA focuses largely on HP, the idea of an independent solution provider owned by a manufacturer doesn’t make sense in the long run.
“One of their fundamental value propositions was manufacturer independence, but being owned by Xerox negates that,” Hiebert said.
In fact, as much as the purchase is a game-changer, Hiebert said he sees it as an opportunity for himself and other managed print vendors to pick up LaserNetworks customers who are focused on other vendors.
“All those customers that were with them because they offer manufacturer independence will at least re-evaluate the relationship, and anyone looking to move forward with non-Xerox hardware will likely be looking elsewhere,” he said.
Hiebert called on HP to realize a “huge opportunity to reach out to their loyal channel partners to secure the at-risk HP business in hose accounts.”
Xerox plans channel managed print update
Although it’s purchasing its largest channel partner, Xerox Canada continues to see opportunity in its channel ranks for managed print, said Ajay Dhingra, vice president of indirect channel operations at Xerox. “It’s a diverse market, and customers want choices,” he said.
To that end, he said that during the current quarter, the company will launch a program called Xerox Partner Print Services, aimed at helping Xerox partners build out their unique value propositions around managed print services.
“We’ve always been a technology provider to them, and now we’ll help them enhance their services portfolios as well,” Dhingra said.