In 2001 when you turned on Xerox Global Services was it a result of real customer demand or was it a way to consolidate a hodge-podge of services? I think it was an emerging requirement. Thinking back on it, it was a pretty gutsy move in 2001. (Laughs) Probably not the best time to have invested in an emerging business but we were here for the long term and thats really what we wanted. We wanted to come out of the financial challenges with a very strong strategy and a strong set of businesses that would enable growth on a continuing basis. So Global Services was all about providing new sources of revenue in areas that we had a lot of competency and value to deliver to our clients. And by the way thats the same reason we kept in place all of our R&D investments at the same time. And a lot of that is paying off not just on the technology side but on the services side. I mean the amount of embedded software and differentiated capabilities in the services offerings coming from our research labs is just terrific.I think in 2001 it really was emerging. I think that whole horizontal space, that document management, was one that really probably wasnt on the radar screen. We could see it. We knew that there was incredible opportunity in the lack of productivity associated with the management of it, but now its a big deal. We write a lot about how technology streamlines businesses and makes them more efficient and how technology is getting easier and more intuitive. And at the same time, theres a trend where top-tier vendors are pushing services to help exploit this really easy technology. How do you explain this contradiction? One of the refreshing trends in the industry is that I ... dont see any more of those [requests for proposals] for a thousand low-priced [products]you know, "Give us your lowest price on [this]." Our clients are beginning to understand that point technologies really arent the answer to making their organizations more productive. So theyre figuring it out. I think were able to respond now with, "Its a combination. Its a set of skills and capabilities offered by our consultants." ... But theres no question that clients are there. They want help. But they understand its a problem. You touched on point technologies. How much of your products are shipping as point purchases, and how many are going out as part of a bigger solution? The vast majority of our enterprise, big-client deals right now are being delivered as solutions that really entertain workflow, or asset management, or device management, or document management. Even in a market like graphics arts, which used to be a point product market, technologies like iGen3 only get sold if theres a workflow solution, if theres an understanding of the applications, services often to do data management so that customized collaterals can be designed and produced. Its not a point product or hardware sell anymore. Were actually going to market together with graphics partners who need to help educate the marketplace on what it takes to really fulfill with customized color and what that space is all about now. Youre expanding the Hot Springs, Ark., center. Do you have further plans to expand this capability? Do you mean geographically? Yes. Were already in the U.K. [and Xerox recently opened another facility outside Rochester, N.Y.] We believe this will be one of the fastest growing segments of our services group, and theres no question well have to expand the capabilities. Next Page: Solutions and partnerships.
Did you have a tough sell with customers to actually get them around the idea that they needed help with what you refer to as the "problem definition"?