Xerox Refocuses On Its Customers

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Solving the problems fell to a team of 30 Xerox researchers. Some were PhDs in imaging science, experts in how the human eye works and responds to light and reflection. Others had degrees in physics and focused on electrophotography, or how the image would be laid down on paper. Software engineers had to figure out how to program the different sensors along the paper path to monitor the images and send a warning signal when the drift went too far. At first, Wooten says, the team wasn't sure the problem was solvable. But within a few months they were making enough progress to believe they could come up with an economical solution.

For Nuvera 288, the day of reckoning is now here: It went on sale in early April with a list price of $460,000 (though IDC research manager Riley McNulty estimates that with installation, the machine will run up to $700,000). Within 18 months, Xerox will know whether its investment, which the company won't put a number to but acknowledges was substantial, was worth it. Wooten is pleased that most of the customers involved in the beta have bought machines. There are competitive products with two engines on the market now, but Wooten says none of them have the ability to run on one engine while the other is down, adding, "If we hadn't listened to our customers, we wouldn't have had that unique differentiator."

For now, certainly, the customer-centric development model is one Xerox is sticking to. Observing customers has already led to a wellspring of new ideas, according to Vandebroek. Engineers who noticed that 44% of the printed product is thrown out in less than one day are working on paper that can be erased and printed on again—on-the-spot recycling. Ethnographic visits to eight different printing companies recently illuminated how customers switch back and forth between offset and digital printers, leading to ideas about smoothing those transitions. Once they get a handle on a customer's work pattern through these kinds of visits, it's also easier to sell them on Xerox's emerging services business. "It turns out to be a great sales tool," says Steve Hoover. And in the end, that's precisely what Xerox needs.

Byrnes is a senior writer for BusinessWeek in New York.