Will Xerox's $6.4 Billion Bet on the Cloud Pay off?

imagesXerox, the document management company, said today it will buy Affiliated Computing Systems in a cash-and-stock deal valued at $6.4 billion. The combination of the two companies highlights the convergence of corporate documents and the cloud as with the ACS buy, Xerox will now manage not only both paper and digital data, but corporate data centers and other IT services. The trend is clear as hardware vendors look at the large-scale computer outsourcers and see in them a captive audience of customers for their gear, but also a growth opportunity in delivering data and information technology assets via the web.

Last week Dell said it would buy Perot Systems and the year before HP purchased EDS, another outsourcer. Both moves were efforts to get deeper into the cloud, providing everything from software to infrastructure as a service. The former copy giant is going at it as well. The AP quotes Xerox CEO Ursula Burns as saying that revenue from services at Xerox will triple to an estimated $10 billion next year from $3.5 billion in 2008. Now that most of our corporate information is digital, and corporations are eying the cloud as the home of their digital domains, the idea of document management and data center management is combining to become data management. Xerox sees this and knows that data is really where the value lies for most organizations.

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