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Xerox CEO banks on new technology

November 19, 1999
Web posted at: 10:04 a.m. EST (1504 GMT)

by Jack McCarthy


LAS VEGAS (IDG) -- Xerox CEO Rick Thoman in his Comdex keynote speech demonstrated some flashy new product prototypes exemplifying the copier and printer company's storied tradition of technology development.

Thoman and Xerox Chief Scientist John Seely Brown showed off a 2-centimeter chip embedded with more than a thousand lasers, a palm-sized Web server, a modular robotic system that can reconfigure into new structures, and a three-dimensional Web book that can stack and sort Web pages. Most of these products are years away from being brought to market, Brown said.

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Xerox is banking, however, on developing new technology to help it sell its core, document-oriented products at a time when the Internet is challenging the way companies do business, Thoman said.

"For all of us to win in the knowledge economy, we need to unleash the knowledge in our document databases," Thoman said. "We need to use our past knowledge, find ways to create new knowledge and share it across our enterprise.

"In the digital, networked age, knowledge is our lifeblood," Thoman said. "And documents are the DNA of knowledge."

The Xerox Palo Alto Research Center is famous for innovations that gave the world the mouse, the graphical user interface and other inventions. Xerox at the turn of the century is facing challenges from Hewlett-Packard, a manufacturer of both printer and computer products, and others.

The company is pushing to maintain its legacy printer and copier products, but to deploy them in new ways, Thoman said. "Xerox spends a lot of time, money and energy trying to democratize information on the Internet, helping people bridge the paper and digital worlds."

This year, Xerox announced several partnerships and in September said it would purchase Tektronix' color printing and imaging division for $950 million. But in October, Xerox posted third quarter net income of $339 million, an 11 percent decline from $381 million in the same period last year.

In a news conference following his speech, Thoman blamed the poor quarterly performance on year 2000 concerns of buyers, a reorganization of the sales force and a poor Brazilian economy that hurt sales in that country.

Thoman said he is working to reverse that trend. "We know what works," he said. "We also know how to work through the product cycle to get there."

Thoman is right to tout the Xerox legacy of great research and development to promote its present business, said one analyst.

"They have a lot of respect in the industry for their research history, but there is a perception that they are staid," said Rob Enderle, an analyst with Giga Information Group in Santa Clara, Calif. "They need to create some excitement."

Jack McCarthy is a U.S. correspondent for the IDG News Service.

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