
Xerox Considers Takeover Offer for HP - big_chungus
https://www.wsj.com/articles/xerox-considers-takeover-offer-for-hp-11573012201?mod=rsswn
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ChuckMcM
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
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.

~~~
snarfy
I've basically seen this happen at my former employer. They started an
industry, made hundreds of millions, but instead of investing in development,
the executives all receive massive bonuses. Competition is now creeping in and
they have no way to compete. What was once new and innovative tech is now
legacy enterprise. Instead of a cooperative relationship with customers it has
become adversarial. Instead of hiring engineers and building better technology
that sells itself as it once did, they hire salesmen to negotiate multiyear
reoccurring contracts.

~~~
mcv
I have often thought it would be a good idea if employees had a voice in the
salaries of their bosses. That would prevent mediocre executives from looting
a company like that. If an executive is really good and benefits the company
as a whole, sure give them a high salary to keep them on board. But if they're
mostly profiting from the hard work of the rest of the company, and don't want
to reinvest the profits back into the company or share it with the employees,
then why should they be getting these massive salaries?

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pergadad
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.

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vit05
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
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

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paxys
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.

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bArray
> 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/)

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daseiner1
kudos. that's really interesting, actually. never would’ve pegged xerox to be
in the high-end translation game. neat service

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foobar1962
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-w...](https://www.reuters.com/article/us-xerox-
fujifilm/fujifilm-wins-appeal-in-battle-with-xerox-over-aborted-merger-
idUSKCN1MR09F)

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goatinaboat
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.

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kevin_thibedeau
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.

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bgorman
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
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.

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bgorman
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-
syst...](https://store.hp.com/id-en/default/printers-hp-ink-tank-system)

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
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.

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gigatexal
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.

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alphadevx
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)

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ch_123
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)

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archeantus
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.

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r00fus
[https://news.ycombinator.com/item?id=8979051](https://news.ycombinator.com/item?id=8979051)

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mcv
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.

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

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als0
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.

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tus88
Isn't HP the number one server vendor in the world? Who is xerox? Maker of
dying tech. Doesn't make sense.

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

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jjar
[https://www.bloomberg.com/news/articles/2019-11-06/xerox-
con...](https://www.bloomberg.com/news/articles/2019-11-06/xerox-considers-
takeover-offer-for-hp-dow-jones-says)

Bloomberg link with no paywall

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kchoudhu
Printer companies belong together.

