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Thought Leaders in Cloud Computing: Ken Stephens, Senior Vice-President of Cloud Services, Xerox (Part 2)

Posted on Tuesday, Feb 21st 2012

SM: It sounds like Xerox is turning into an IT outsourcing company.

KS: We have about $2 billion in revenue today from IT outsourcing already. We’re a $22 billion company, and about $2 billion of it is IT outsourcing. Now, in the market that we’re pursuing, the services business, historically, ACS and Xerox have pursued Fortune 2000, generally speaking. In the cloud space, we’re pursuing the SMB market as well. So, we’re not only pursuing the top 2000 companies in the world. We’re also pursuing companies that have $10 million to $250 million a year in revenue. Those are much smaller companies, as you can imagine. The reality is smaller companies have just as much, if not more, to gain from cloud computing than their larger competitors. So, it’s a very attractive market and one that we’re excited about.

SM: All right. Given that context, talk to me about some of the key trends that you are monitoring, let’s say, and that are driving your decisions.

KS: A couple of the key trends would be … the speed to market of service offerings. Everyone is looking for his niche in terms of will he specialize in infrastructure or mobile devices or any specific vertical? So, we’re seeing a great deal of specialization in the cloud. That’s good, but we’re not going down that path. We’re looking at it as a full outsourcing arrangement. Our approach is to partner with some of the specialty firms. So, if you take  a company that specializes in health care in the cloud, as an example, we may partner with that company and offer its services as part of our portfolio. The same thing with a host of other services, we may offer services from many cloud providers from within our cloud because we don’t intend to specialize. We intend to offer a full suite of IT services in the cloud. And we will partner with those who offer specialties. That’s a trend that we’re watching closely because everybody trying to figure out how to differentiate. That’s an important topic.

Another important trend is the partnering. The industry, at the highest level, when cloud computing came into existence, got disrupted and companies had to figure out how they would position themselves in the cloud space. It’s kind of along the lines of what I was saying about picking your niche. Some companies have to figure out if they’re going to be one-stop shops in the cloud or partner. So, companies like CA Technologies, EMC and Cisco have opted to partner with other companies, which is why you saw the creation of VCE, a joint partnership between EMC and Cisco and VMware. And you’ve seen other announcements in the partnership space like CA and VCE and CA and Cisco as well as BMC and a couple of those companies.

So, we have chosen to partner with those same companies. And we have structured agreements with some of those partners. The basis of that trend is who’re going to be the survivors? Who’s going to be around five years from now? Many of those cloud providers are going to be acquired or gobbled up or go out of business or whatever. So, it’s a relevant conversation in terms of who’s going to be a long-term player. Choosing your partners means choosing wisely. We think we’ve done that … and we’re still doing that.

SM: When you select whom to partner with, is it all large companies that you partner with, or do you also partner with small companies?

KS: We’ve partnered with smaller companies as well. As an example, we’ve partnered with Quantum, a somewhat smaller company. They bring some niche capabilities to the table that you don’t want to have to wait for the larger companies to make available.

SM: What does Quantum do?

KS: Quantum specializes in storage and backup solutions.

SM: Would it be fair to say that your partnerships and general crowd strategy are all in the infrastructure as a service space?

KS: It would not. Clearly, that’s the hot button that many companies are [pushing] today. Certainly, we are as well, but we have, across the broader Xerox, business processing capabilities that we’re introducing into the cloud. Our HRO team has introduced a number of services into the cloud. Our managed print – the traditional Xerox [folks] – have introduced services into the cloud. We have mobile print as a print option in the cloud as well. So, there are a number of services being introduced into the cloud. I just happen to be more focused on the IT portion.

This segment is part 2 in the series : Thought Leaders in Cloud Computing: Ken Stephens, Senior Vice-President of Cloud Services, Xerox
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