Partners Applaud Xerox Decision To Keep Its Name For Post-Split Products Business

Xerox will keep its long-standing brand name for one of the two companies it will split into later this year and rename the other, the company announced Thursday.

The document technology business, which traces itself back to the roots of the Norwalk, Conn.-based vendor, will carry the Xerox brand, while the other, smaller part of the current company, which will focus on business process outsourcing, will be named Conduent.

Xerox announced in January that it would split into two companies just weeks after activist investor Carl Icahn bought more than 7 percent of company's stock and announced his intention to discuss possible operational improvements and strategic alternatives for the company.

[Related: Xerox Channel Chief On How Company Split Will Drive Channel Growth And Software Opportunities]

The document technology side, which took in about $11 billion in revenue last year, will employ about 39,000. The BPO side, with about $7 billion in revenue in 2015, will have about 96,000 employees, according to Xerox. Both will be Fortune 500 companies, the vendor said in a statement.

Xerox's current Global Business Services division is ranked No. 9 on CRN’s 2016 Solution Provider 500 list.

Steve Jenkins, the president of Carrollton, Texas-based Xerox partner Precision Document Solutions, said he thinks keeping the Xerox name on the document technology side is a good move.

’It’s a good brand and they have spent a lot of money building quality hardware, … I’m glad to see that it is staying the same,’ he said.

Meanwhile, Joshua Justice, the founder and president of Xerox partner, Southern Solutions, based in La Plata, Md,, said in an email to CRN that he’s happy Xerox decided to keep the name associated with its document technology products, such as printers and copiers.

’It was a smart move,’ he said, noting that Xerox’ name has been associated with office products for more than 60 years, underscoring the importance of brand recognition.

Guy Baroan, founder of Xerox partner, Baroan Technologies, of Elmwood Park, N.J., said that while he’s confident a smaller Xerox will be able to focus more tightly on its partners, he feels Conduent may end up competing with solution providers in certain vertical markets.

Specifically, he’s concerned that Conduent will move in on partners in the health care space, where his company does about 25 percent of its business. In fact, Xerox said its current list of services that Conduent will assume touches about two-thirds of all insured health care patients in the United States.

’To me, it looks like they will be competing with the channel,’ Baroan said. ’The question is to what extent and to what size.’

With a lot of consolidation going on in the health care industry, Baroan said, many smaller medical providers are being absorbed by larger practices and groups.

Baroan believes Conduent will pursue business from those larger medical practices. When they sign a contract with a services provider, he added, it might trickle down and include all those smaller practices.

’It’s a natural fit for them,’ he said.

In an email to CRN, a Xerox spokesperson said it ’is too early … for Xerox to speculate on the direction’ of Conduent and declined to comment on whether it will compete with the channel for business.

The name Conduent, is a ’coined name,’ inspired by a number of other words, such as conduit, confluence and constituent, Xerox CMO John Kennedy wrote in a blog post.

He said the name was chosen from nearly 6,000 options Xerox considered within the last three months. Kennedy believes the name ’seemed perfect.’

’Conduent will begin its next chapter as a standalone company with a name that conveys the vital business we conduct every day,’ Xerox Chairman and CEO Ursula Burns said in a statement.

Xerox said Conduent will have specific expertise in transaction-intensive processing, analytics and automation.

Earlier this week, Xerox announced that Ashok Vemuri, the former CEO of iGate, a solution provider that was sold to Capgemini last year, will become the CEO of Conduent, effective July 1.

Xerox has been restructuring over the last three years, In April, company executives announced the final stage of a $300 million restructuring it expects will save $2.4 billion over the next three years. During the first quarter of this year, Xerox said it spent $126 million on the restructuring initiative, all but $2 million of that spent on severance costs tied to the layoffs of about 4,800 employees worldwide.