IBM and Xerox Form Partnership to Market Document Management System

Strategic Insights -

IBM and Xerox, two prominent competitors in the printer business, have jointly agreed to market an officewide document management system. The system will comprise Xerox's Document Centre line of digital products, which function as printers, copiers, and scanners, along with IBM's Lotus suite of document management software. This partnership is set to be announced today, coinciding with Xerox's introduction of its latest copiers, printers, and software.

The agreement between IBM and Xerox is significant, as it will enable customers to manage their documents and messages more efficiently. According to Mark Hill, general manager of Xerox's Office Business Unit, the system will offer a seamless, end-to-end solution. IBM is equally enthusiastic, with Mark Bregman, general manager for IBM's pervasive computing group, stating that customers can now enhance their investment in Lotus and participate in the convergence of the data and document worlds.

Although the partnership is not a classic joint venture, with customers paying separately for the copiers and software, it marks an important step in the collaboration between the two companies. As analyst Jonathan Rosenzweig notes, this agreement could lead to a few extra sales by leveraging each other's relationships.

Key Takeaways:

  • The partnership between IBM and Xerox will enable customers to manage documents and messages more efficiently using Xerox's Document Centre line of digital products and IBM's Lotus suite of document management software.
  • The system will offer a seamless, end-to-end solution for document management, allowing customers to handle email, company-wide memos, and other methods of creating and disseminating words and images.
  • The partnership is not a classic joint venture, with customers paying separately for the copiers and software, and there is no discount for buying the products together.
  • IBM and Xerox will visit large accounts together, but customers must purchase the copiers and software separately; there is no revenue-sharing feature.
  • The main selling point of the partnership is the compatibility of their products, which will ease the integration of documents and messages.
  • The agreement is significant for both companies, with IBM gaining access to Xerox's customer list and Xerox needing to expand its relationships with information technology managers.

Statistics:

  • 24 million current users of Lotus Notes (mentioned as part of IBM's vast customer list)
  • $415 million (the amount Xerox spent to buy XlConnect Solutions Inc., a computer services company to strengthen its image as digitally savvy)
  • Microsoft Exchange has taken a significant market share from Lotus, with its collaborative software that allows users to share information.
  • Two years (the time period in which Microsoft Exchange has been in the market)
  • IBM has a vast customer list, including 24 million current users of Lotus Notes.

Sources:

  • Mark Hill, general manager of Xerox's Office Business Unit
  • Mark Bregman, general manager for IBM's pervasive computing group
  • Jonathan Rosenzweig, analyst with Salomon Smith Barney
  • Barry Tepper, senior consultant at Cap Ventures Inc.
  • Chris Le Tocq, software analyst with Dataquest