Sourcing Market Pulse

Today Xerox, more known for copiers than outsourcing, announced the acquisition of BPO/ITO service provider ACS for a healthy $6.4B (down to $5.6B on Tuesday due to the fall in Xerox' stock price).   Like with Dell and Perot Systems the synergies "on paper" are strong though there will be issues merging two very different organizations and cultures (Dallas meets Rochester).  While Xerox has a large services business ($3.8B revenue last year) it has been mainly tied to lower-end services linked to its product business.  Its "document services" outsourcing business focuses on more value-added services tied to specific document/content-heavy business processes is strong but in a still nascent outsourcing market segment.  The near term opportunities for the merged firm will be in lower end business process outsourcing services but the strategic value will come from growing the higher end business.  Read more on the EquaTerra blog.