Be sure to check out our piece on the production side of this story!
Ever since the divorce of Fuji Xerox and Xerox in 2019, which ended a 60-year partnership that opened the Japanese manufacturer’s possibility to go to market in areas outside of Asia-Pacific, the industry has been watching and waiting to see the next step.
Last week saw the first tentative public announcement by FUJIFILM Business Innovation, suggesting that it will launch production as well as office printers under its own brand in select countries such as Germany, Italy, Portugal, and Spain, then (possibly at a later stage) in the Middle East as well as Central and South America.
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| The former Fuji Xerox is now known as FUJIFILM Business Innovation |
The move is surprising in that it is so confining, limiting the company to only four European countries initially. Launching a brand, establishing a channel, and building an organization seems as though it’s not enough. On the other hand, FUJIFILM as a manufacturer must keep its factories running and devices churning out, and perhaps its current largest customer is just not doing well enough.
One of the factors that previously limited Fuji Xerox (as the manufacturer was formerly known) was the contractual agreement with Xerox that allowed Fuji Xerox to supply to the Asia-Pacific and Xerox to Europe and North America. While FUJIFILM continues to supply OEM devices to Xerox, the regional limitation is over, with Xerox since announcing low-end office devices based on Lexmark engines. This would open a whole number of doors for FUJIFILM to establish themselves in new regions and try their own fate in new markets—if they had a distribution structure, a capable organization, and a recognized brand name (all of which are questionable, at least for the office market).
Without Solutions, Office Devices Are Worthless
If we take a moment to review what each partner has previously brought to the relationship, FUJIFILM has tremendous office device expertise as well as production capability. From the Xerox side comes the solutions development expertise—think Workplace Cloud, DocuShare, App Gallery—that has evolved the past 15 years and is well respected in the marketplace (as well as a regular winner of Keypoint Intelligence’s Software Line of the Year Award). Without those solutions in this day and age, office devices have little value.
At the same time, the news suggests that Xerox is in the process of spinning off its software business, along with the finance and innovation organizations, which generally suggests that it would be a viable asset to have for any manufacturer to compliment production capabilities. What’s more, the Xerox channel organization is unique in the office industry through the agent or concessionaire program, which has supported the channel with service, logistics, and technical back-up like no other. If I were a Xerox agent (mono- or multi-brand) at this time, I would be worried about some of the news from the mothership. It’s a big move for a reseller to switch brands and, while it can be done, it takes time to retrain all staff and a lot of convincing customers who feel happy with their current supplier.
If I Were FUJIFILM, What Would I Do?
There are certainly other potential marriages that could work for FUJIFILM in the office market going forward. Just look at some of the areas that are currently in high demand. All vendors whose strength lies in supporting remote workers with a competent e-Com channel and a technical support structure would benefit FUJIFILM in their quest to expand regions and could want to couple with a legacy office provider. As a manufacturer, would I really look to establish my own brand and essentially compete with my largest customer for machines in field or share of customers pockets? Others have done it: Kyocera, for example, carries multiple brands (Olivetti, TA Triumph-Adler, UTAX) of the same devices in one region. However, that kind of strategy is not without friction, which leaves the rekindling and strengthening of the current relationship as perhaps the better option.
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