11 ms·

Xerox Considers Takeover Offer for HP

80 points by big_chungus 7y ago

vit05 7y ago
Xerox Holdings Corporation (XRX) =Market Cap 8.071B HP Inc. (HPQ) = Market Cap 26.638B Xerox ended Fujifilm joint venture today and is already trying a new multibillion-dollar business. I had no idea they still had some relevant product in the global market. But it is very likely that these advances are more about a financial game of activist investors than a long-term plan.
- Aloha 7y ago
  Xerox is huge in the services business, that's why HP looks good to them, they also still make tons and tons of printers, from big to small
  - perl4ever 7y ago
    Xerox spun off their services business as Conduent, which was basically ACS that they acquired previously.
    - Aloha 7y ago
      This I didnt know
      - perl4ever 7y ago
        Ursula seemed to think her job was to diversify Xerox away from copiers, and then Carl Icahn came along and said, no, there's more value for shareholders in breaking it up. The Conduent separation happened at the beginning of 2017. There were some dribs and drabs that were transferred to Conduent because they seemed to be services and not copiers, but most of it was the former ACS. For perspective (if the numbers I just looked up are right), Conduent has 85,000 employees but averages less than $18K in revenue per employee.
  - paxys 7y ago
    What services business? Xerox makes almost all of its revenue from selling or renting printers/copiers. HP itself spun off its services business a little while ago (HPE is a completely different company now). This is essentially a move for two companies in similar segments that see a slow death on the horizon to combine to cut costs and hope for a successful pivot. It makes sense as well, since the market for printers is already too small for two major players and is just shrinking every year.
    - tomnipotent 7y ago
      > What services business? According to their annual report: https://www.xerox.com/downloads/usa/en/x/Xerox-2018-Annual-Report.pdf https://www.xerox.com/downloads/usa/en/x/Xerox-2018-Annual-R... 2018 - Revenues: $9.8B ---- Sales: $3.97B ---- Services, maintenance and rentals: $5.59B
    - bArray 7y ago
      > What services business? They also do document conversion, although I'm unsure of what the business is called publicly (maybe this [1]). They take documents in practically any format and do language conversion, whilst maintaining formatting (a super hard problem). As I understand they get a considerable amount of business from converting technical documents. [1] https://xeroxtranslates.com/ https://xeroxtranslates.com/
      - daseiner1 7y ago
        kudos. that's really interesting, actually. never would’ve pegged xerox to be in the high-end translation game. neat service
    - tonyedgecombe 7y ago
      >What services business? As margins fell in hardware businesses most of the manufacturers shifted to selling what used to be included in the product as separate service. This then gets extended out to related domains. It's quite common for a corporation to outsource their whole print room to a company like Xerox. Unfortunately Xerox it's also common to shut down your print room and send more emails instead.
  - tonyedgecombe 7y ago
    This consolidation of printer companies has been going on for a long time now. When I started working in the field it seemed every large corporation had a printer division.
ChuckMcM 7y ago
In the words of Scott McNealy, "Everyone likes to hold hands while circling the drain." (I believe he made that comment when SGI agreed to acquire Cray.) It is interesting to me as a technologist to remember these companies as both powerhouses in their domains and failing enterprises. What I don't know is what allows a company to successfully 're-invent' itself or to recover its core values and return to a previously powerful position. IBM did that once transitioning from PCs, Microsoft seems to have done it, and Apple pulled it off when Steve Jobs returned. SGI died, MIPS is nearly dead, Sun is dead, Compaq died, Dell might be considered a comeback, National Semiconductor died, AT&T Bell Labs died, Northern Telcom died, Polaroid died, Kodak is nearly dead. There are obvious issues when the accountants take over and start squeezing the cash out of a company, and companies that just keep getting deeper and deeper into a technology that isn't going to survive when something new has come along. But why are these events so crippling that companies that have the resources to re-invent themselves seem to so often fail to do so?
- dman 7y ago
  Think it comes down to incentive structures and what kind of behavior is rewarded. In a well functioning company people creating value bottom up see an upward trajectory in their careers. Companies that lose their way end up in a limbo state where power brokers, star communicators, coordinators end up capturing all the value and the act of creating bottom up value becomes an irrational act. An employee will do exceptional work if they have some kind of belief that they will be able to monetize it by capturing some of the value created. Once this belief evaporates doing great work becomes a fools errand. We (humans) appear to be hard wired to reverse engineer the incentive structures both explicit and implicit in any given situation.
  - ChuckMcM 7y ago
    I think there is a lot of truth in this. It was certainly the case at Sun when my friends started leaving that they had lost hope of being able to "make a difference." I expect that is an expression of the condition you describe.
  - deleted 7y ago
    [deleted]
pergadad 7y ago
A company with $10bn revenue buys one with $58bn revenue. This comes after cancelling a merger and nearly getting sued for $1bn because they last-minute-cancelled a merger with Fujifilm. Sounds totally healthy and not at all like some financial game played by Xerox's activist investors. Prediction: if this happens the joint company will be worth nothing in 2030. They are already now kicking out lots of staff, so are probably as usual destroying the R&D departments in favour of short term profit margins.
kchoudhu 7y ago
Printer companies belong together.
- pugworthy 7y ago
  #getreal
archeantus 7y ago
Apple is at an all-time high and Xerox is circling the drain. Pretty amazing to see what Apple has become with the point-in-the-right-direction Steve got from Xerox all those years ago.
- r00fus 7y ago
  https://news.ycombinator.com/item?id=8979051 https://news.ycombinator.com/item?id=8979051
bgorman 7y ago
This makes no sense, HP is in much better position than Xerox. HP has the best inkjet technology, overall software/firmware and recently absorbed Samsung's printer business which gives them a great laser portfolio as well. Xerox is only a few years removed with flirting with bankruptcy. Disclosure: used to work on HP printers several years ago
- mikorym 7y ago
  Maybe you can answer this question for me: Why does HP not have a good ink tank printer based on the shell of something like the HP OfficeJet 3830? It seems like Canon, Epson and Brother are the only real current options for ink tank / bottle refill printers.
  - bgorman 7y ago
    HP does have ink tank printers, but I believe they are only sold in emerging markets. https://store.hp.com/id-en/default/printers-hp-ink-tank-system https://store.hp.com/id-en/default/printers-hp-ink-tank-syst... In developed economies HP was/is pushing for users to use its "Ink subscription" service. I am assuming that using cartridges has higher margins for HP. The business model for HP is to make money selling supplies, and with ink tank printers it is trivial for a customer to use non-OEM refills.
    - mikorym 7y ago
      That's interesting. In South Africa, at the moment, they also don't have widely available ink tank printers. The two main ones sold at most shops are Epson and Canon, with Epson having the most aggressive marketing campaign of the two. The nice thing about Canon's offering is that they took some of their older designs (that people are used to) and stuck in the ink tank. Epson's offering is the cheapest, with an entry level but not bottom of the range costing about USD 140. Edit: No document feeder on that HP! That's disappointing.
skissane 7y ago
If Xerox buys HP, is someone else going to buy HPE? (Any speculation on who?)
- basch 7y ago
  They have second largest market share behind Dell. Who would be in the market to buy something just so they can tackle Dell head on? Cisco?
- als0 7y ago
  EMC was in talks with HPE before deciding to merge with Dell. The next logical player would be Cisco. A merger with Oracle doesn’t sound likely but isn’t outside the realm of possibility. HPE is a more complex acquisition now since they’ve started pouring more investment into supercomputing, which heavily depends on getting a few good long term deals. They’re no longer a pure infrastructure play. But if someone buys HP it shouldn’t have any effect on HPE. These are separate topics.
gigatexal 7y ago
I used to work testing printers for Xerox. Back then they were benchmarking their printers against the HP ones that performed a lot better. This is a bold move but one that I’m not sure will ever pay off. I always thought printers and consumer electronics is a low margin business and not something people really want to be in.
goatinaboat 7y ago
It is very important to remember that this isn’t the “real HP”, it’s just some generic PC OEM with the name. The real HP lived on as Agilent.
- kevin_thibedeau 7y ago
  Even Agilent didn't like the real HP and kicked them to the curb as Keysight. I hope that when the HP name is up on the auction block, Keysight is smart enough to take it back.
- deleted 7y ago
  [deleted]
foobar1962 7y ago
I just read a Reuters article on the legal action that was recently found in Fuji's favour, it said that Xerox relies on Fuji for copiers. The new Xerox management is anti-Fuji merger, so buying HP makes sense as an alternative source of copiers to Fuji. https://www.reuters.com/article/us-xerox-fujifilm/fujifilm-wins-appeal-in-battle-with-xerox-over-aborted-merger-idUSKCN1MR09F https://www.reuters.com/article/us-xerox-fujifilm/fujifilm-w...
jjar 7y ago
https://www.bloomberg.com/news/articles/2019-11-06/xerox-considers-takeover-offer-for-hp-dow-jones-says https://www.bloomberg.com/news/articles/2019-11-06/xerox-con... Bloomberg link with no paywall
tus88 7y ago
Isn't HP the number one server vendor in the world? Who is xerox? Maker of dying tech. Doesn't make sense.
- neilalexander 7y ago
  That would be post-split HPE, not HP.
alphadevx 7y ago
HP stock already up 10% in pre-market alone, based on this rumour: https://finance.yahoo.com/quote/HPQ?p=HPQ&.tsrc=fin-tre-srch https://finance.yahoo.com/quote/HPQ?p=HPQ&.tsrc=fin-tre-srch
ch_123 7y ago
I'm reminded of Steve Job's insight into why Xerox failed to capitalize on their Alto/Star tech: https://www.youtube.com/watch?v=_1rXqD6M614 https://www.youtube.com/watch?v=_1rXqD6M614
mcv 7y ago
Does this mean that support from my Samsung printer will now come from Xerox? I was appalled to discover I had to contact HP for support.

80 points by big_chungus 7y ago

Xerox Holdings Corporation (XRX) =Market Cap 8.071B HP Inc. (HPQ) = Market Cap 26.638B Xerox ended Fujifilm joint venture today and is already trying a new multibillion-dollar business. I had no idea they still had some relevant product in the global market. But it is very likely that these advances are more about a financial game of activist investors than a long-term plan.

Aloha 7y ago
Xerox is huge in the services business, that's why HP looks good to them, they also still make tons and tons of printers, from big to small
- perl4ever 7y ago
  Xerox spun off their services business as Conduent, which was basically ACS that they acquired previously.
  - Aloha 7y ago
    This I didnt know
    - perl4ever 7y ago
      Ursula seemed to think her job was to diversify Xerox away from copiers, and then Carl Icahn came along and said, no, there's more value for shareholders in breaking it up. The Conduent separation happened at the beginning of 2017. There were some dribs and drabs that were transferred to Conduent because they seemed to be services and not copiers, but most of it was the former ACS. For perspective (if the numbers I just looked up are right), Conduent has 85,000 employees but averages less than $18K in revenue per employee.
- paxys 7y ago
  What services business? Xerox makes almost all of its revenue from selling or renting printers/copiers. HP itself spun off its services business a little while ago (HPE is a completely different company now). This is essentially a move for two companies in similar segments that see a slow death on the horizon to combine to cut costs and hope for a successful pivot. It makes sense as well, since the market for printers is already too small for two major players and is just shrinking every year.
  - tomnipotent 7y ago
    > What services business? According to their annual report: https://www.xerox.com/downloads/usa/en/x/Xerox-2018-Annual-Report.pdf https://www.xerox.com/downloads/usa/en/x/Xerox-2018-Annual-R... 2018 - Revenues: $9.8B ---- Sales: $3.97B ---- Services, maintenance and rentals: $5.59B
  - bArray 7y ago
    > What services business? They also do document conversion, although I'm unsure of what the business is called publicly (maybe this [1]). They take documents in practically any format and do language conversion, whilst maintaining formatting (a super hard problem). As I understand they get a considerable amount of business from converting technical documents. [1] https://xeroxtranslates.com/ https://xeroxtranslates.com/
    - daseiner1 7y ago
      kudos. that's really interesting, actually. never would’ve pegged xerox to be in the high-end translation game. neat service
  - tonyedgecombe 7y ago
    >What services business? As margins fell in hardware businesses most of the manufacturers shifted to selling what used to be included in the product as separate service. This then gets extended out to related domains. It's quite common for a corporation to outsource their whole print room to a company like Xerox. Unfortunately Xerox it's also common to shut down your print room and send more emails instead.
- tonyedgecombe 7y ago
  This consolidation of printer companies has been going on for a long time now. When I started working in the field it seemed every large corporation had a printer division.

ChuckMcM 7y ago

In the words of Scott McNealy, "Everyone likes to hold hands while circling the drain." (I believe he made that comment when SGI agreed to acquire Cray.) It is interesting to me as a technologist to remember these companies as both powerhouses in their domains and failing enterprises. What I don't know is what allows a company to successfully 're-invent' itself or to recover its core values and return to a previously powerful position. IBM did that once transitioning from PCs, Microsoft seems to have done it, and Apple pulled it off when Steve Jobs returned. SGI died, MIPS is nearly dead, Sun is dead, Compaq died, Dell might be considered a comeback, National Semiconductor died, AT&T Bell Labs died, Northern Telcom died, Polaroid died, Kodak is nearly dead. There are obvious issues when the accountants take over and start squeezing the cash out of a company, and companies that just keep getting deeper and deeper into a technology that isn't going to survive when something new has come along. But why are these events so crippling that companies that have the resources to re-invent themselves seem to so often fail to do so?

dman 7y ago
Think it comes down to incentive structures and what kind of behavior is rewarded. In a well functioning company people creating value bottom up see an upward trajectory in their careers. Companies that lose their way end up in a limbo state where power brokers, star communicators, coordinators end up capturing all the value and the act of creating bottom up value becomes an irrational act. An employee will do exceptional work if they have some kind of belief that they will be able to monetize it by capturing some of the value created. Once this belief evaporates doing great work becomes a fools errand. We (humans) appear to be hard wired to reverse engineer the incentive structures both explicit and implicit in any given situation.
- ChuckMcM 7y ago
  I think there is a lot of truth in this. It was certainly the case at Sun when my friends started leaving that they had lost hope of being able to "make a difference." I expect that is an expression of the condition you describe.
- deleted 7y ago
  [deleted]

pergadad 7y ago

A company with $10bn revenue buys one with $58bn revenue. This comes after cancelling a merger and nearly getting sued for $1bn because they last-minute-cancelled a merger with Fujifilm. Sounds totally healthy and not at all like some financial game played by Xerox's activist investors. Prediction: if this happens the joint company will be worth nothing in 2030. They are already now kicking out lots of staff, so are probably as usual destroying the R&D departments in favour of short term profit margins.

kchoudhu 7y ago

Printer companies belong together.

pugworthy 7y ago
#getreal

archeantus 7y ago

Apple is at an all-time high and Xerox is circling the drain. Pretty amazing to see what Apple has become with the point-in-the-right-direction Steve got from Xerox all those years ago.

r00fus 7y ago
https://news.ycombinator.com/item?id=8979051 https://news.ycombinator.com/item?id=8979051

bgorman 7y ago

This makes no sense, HP is in much better position than Xerox. HP has the best inkjet technology, overall software/firmware and recently absorbed Samsung's printer business which gives them a great laser portfolio as well. Xerox is only a few years removed with flirting with bankruptcy. Disclosure: used to work on HP printers several years ago

mikorym 7y ago
Maybe you can answer this question for me: Why does HP not have a good ink tank printer based on the shell of something like the HP OfficeJet 3830? It seems like Canon, Epson and Brother are the only real current options for ink tank / bottle refill printers.
- bgorman 7y ago
  HP does have ink tank printers, but I believe they are only sold in emerging markets. https://store.hp.com/id-en/default/printers-hp-ink-tank-system https://store.hp.com/id-en/default/printers-hp-ink-tank-syst... In developed economies HP was/is pushing for users to use its "Ink subscription" service. I am assuming that using cartridges has higher margins for HP. The business model for HP is to make money selling supplies, and with ink tank printers it is trivial for a customer to use non-OEM refills.
  - mikorym 7y ago
    That's interesting. In South Africa, at the moment, they also don't have widely available ink tank printers. The two main ones sold at most shops are Epson and Canon, with Epson having the most aggressive marketing campaign of the two. The nice thing about Canon's offering is that they took some of their older designs (that people are used to) and stuck in the ink tank. Epson's offering is the cheapest, with an entry level but not bottom of the range costing about USD 140. Edit: No document feeder on that HP! That's disappointing.

skissane 7y ago

If Xerox buys HP, is someone else going to buy HPE? (Any speculation on who?)

basch 7y ago
They have second largest market share behind Dell. Who would be in the market to buy something just so they can tackle Dell head on? Cisco?
als0 7y ago
EMC was in talks with HPE before deciding to merge with Dell. The next logical player would be Cisco. A merger with Oracle doesn’t sound likely but isn’t outside the realm of possibility. HPE is a more complex acquisition now since they’ve started pouring more investment into supercomputing, which heavily depends on getting a few good long term deals. They’re no longer a pure infrastructure play. But if someone buys HP it shouldn’t have any effect on HPE. These are separate topics.

gigatexal 7y ago

I used to work testing printers for Xerox. Back then they were benchmarking their printers against the HP ones that performed a lot better. This is a bold move but one that I’m not sure will ever pay off. I always thought printers and consumer electronics is a low margin business and not something people really want to be in.

goatinaboat 7y ago

It is very important to remember that this isn’t the “real HP”, it’s just some generic PC OEM with the name. The real HP lived on as Agilent.

kevin_thibedeau 7y ago
Even Agilent didn't like the real HP and kicked them to the curb as Keysight. I hope that when the HP name is up on the auction block, Keysight is smart enough to take it back.
deleted 7y ago
[deleted]

foobar1962 7y ago

I just read a Reuters article on the legal action that was recently found in Fuji's favour, it said that Xerox relies on Fuji for copiers. The new Xerox management is anti-Fuji merger, so buying HP makes sense as an alternative source of copiers to Fuji. https://www.reuters.com/article/us-xerox-fujifilm/fujifilm-wins-appeal-in-battle-with-xerox-over-aborted-merger-idUSKCN1MR09F https://www.reuters.com/article/us-xerox-fujifilm/fujifilm-w...

jjar 7y ago

https://www.bloomberg.com/news/articles/2019-11-06/xerox-considers-takeover-offer-for-hp-dow-jones-says https://www.bloomberg.com/news/articles/2019-11-06/xerox-con... Bloomberg link with no paywall

tus88 7y ago

Isn't HP the number one server vendor in the world? Who is xerox? Maker of dying tech. Doesn't make sense.

neilalexander 7y ago
That would be post-split HPE, not HP.

alphadevx 7y ago

HP stock already up 10% in pre-market alone, based on this rumour: https://finance.yahoo.com/quote/HPQ?p=HPQ&.tsrc=fin-tre-srch https://finance.yahoo.com/quote/HPQ?p=HPQ&.tsrc=fin-tre-srch

ch_123 7y ago

I'm reminded of Steve Job's insight into why Xerox failed to capitalize on their Alto/Star tech: https://www.youtube.com/watch?v=_1rXqD6M614 https://www.youtube.com/watch?v=_1rXqD6M614

mcv 7y ago

Does this mean that support from my Samsung printer will now come from Xerox? I was appalled to discover I had to contact HP for support.