Xerox Ramps up Partnerships with Resellers, Agents to Target $44 Billion Opportunity in Small and Mid-Size Market.

ORLANDO, Fla. -- In a significant expansion of its distribution partnerships, Xerox Corporation (NYSE: XRX) is recruiting a new group of information technology resellers and enhancing its network of independent agents in North America.

The moves are part of a broad effort designed to better serve customers, create new business opportunities for sales partners, and capture a bigger slice of the $44 billion worldwide opportunity in the small and mid-size business (SMB) market.*

The company today announced a series of initiatives that, in total, will target 600 top value-added resellers in the U.S. Xerox is reaching out to resellers with specialized expertise in document management technology, advanced solutions, software and services for SMB customers. At the same time, Xerox is enriching its agent channel by adding several new components, including increased marketing, training and support. A tiered program offers additional incentives based on financial performance.

"We are making our most significant investment in reseller and agent partnerships since we launched these distribution channels," said Jim Firestone, president, Xerox North America. "As our distribution capacity builds, we will participate in more buying decisions and enable partners to bring the value of the Xerox brand to more businesses than ever before. The message is clear: For agents, resellers and customers who require document solutions to help drive business results, Xerox is the partner of choice."

North American resellers currently sell 27 Xerox office products, including color and monochrome printers and entry-level multifunction devices that print, copy, scan and fax. To reach customers not fully covered by other channels, the new program enables a set of certified IT resellers to sell a broader range of products, including higher-end multifunction systems that produce letter-size and 11"x17" documents at up to 90 pages per minute in black and white and 50 ppm in color.

Resellers also are being recruited to offer advanced document solutions such as assessment services, fleet management, scanning and cost-per-print programs tailored to SMB customers.

Xerox agents who currently sell the full Xerox product line, from office equipment to high-speed digital presses, now will have access to a wider array of accounts previously served exclusively by the Xerox direct sales force. Enhanced incentive plans and growth opportunities will be available to all agents.

A higher-level "Platinum" program will be offered to qualified agents who expand their sales teams and meet or exceed specific revenue targets. About 500 independent agencies with 2,300 sales representatives serve as Xerox agents in the U.S. Sales coverage, or "feet on the street," in the agent channel grew more than 10 percent over the past two years.

Agents and resellers are among Xerox's fastest-growing channels, and the company is making continued investments that help increase the success of its partners. Approximately 70 percent of Xerox's North American equipment installs are generated through channel partners, accounting for about 40 percent of equipment revenue.

"This is a great time to be a business partner with Xerox. Building value in my company is extremely important and the driving force to grow my business. With these enhancements, Xerox is showing a commitment to sharing new revenue streams and providing more access to potential prospects. It will help us add new customers," said Bob Leone, president of Mr. Copy, a large San Diego-based Xerox agency. "I also believe that new support tools will make it easier to serve customers and streamline the way we work with Xerox."

"Xerox is evolving into a more committed distribution channel partner," said John Boden, president, founder and managing partner, QuestingHound Technology Partners, a South Florida-based IT reseller. "The expanded opportunities Xerox is bringing to the IT channel will open new doors for multifunction technology and document solutions."

"Over four years ago, Xerox CEO Anne Mulcahy stated that the company would return to a leadership position in the copier/printer industry on the backs of color and alternate channels," said Frank Cannata, president of Marketing Research Consultants Inc. and publisher of The Cannata Report, a publication that covers document technology and distribution strategies. "Xerox continues to deliver on that promise."

As part of its overall channel strategy, Xerox is expanding its distribution capacity around the world. Over the last three years the company has formed agreements with leading distributors across developing markets such as Latin America and India, and it has synchronized its Pan-European channel efforts.

Xerox North America recently formed a dedicated North American Partners Group to bolster external partnerships with resellers, agents and dealers. The new organization is headed by D. Cameron Hyde, corporate vice president and president of the Xerox North American Partners Group. Hyde has held several senior sales and marketing positions in his 31-year career at Xerox, most recently serving as senior vice president of North American Agent Operations and previously as president and CEO of Xerox Canada Ltd.

Xerox is hosting its first Partner Summit for about 800 agents and resellers, Feb. 11-14 in Orlando. Xerox Chairman and CEO Anne Mulcahy will join other Xerox executives to discuss new products, strategies, programs and innovations, all designed to better serve SMB customers.

Partner and Customer Contacts:

For more information about Xerox products and services, visit www.xerox.com, www.xerox.com/partners or call 800-ASK-XEROX.

NOTE TO EDITORS: For more information about Xerox, visit www.xerox.com/news. XEROX[R] is a trademark of XEROX CORPORATION.

(*) $44 billion SMB market opportunity based on Xerox internal analysis of third-party sources in North America, Europe and Developing Markets.