Summary
The wardware side of Dell's market is commoditizing from PC's to printers to servers, to storage, etc. [roduct differentiation is becoming more difficult and margins are declining Their growth opportunity is on the Services side like cloud computing or document management and storage services or IT management outsourcing, etc where margin expansion is possible.
Analysis
If Dell can navigate through Xerox' s complex balance sheet which is concentrated on equipment financing and leasing portfolio, there are obvious synergies on several fronts:
1. Printer/MFP sourcing where their market postions are complimentary
2. Xerox Wordwide market access particularly Europe and Developing Markets
3. Potential link up/access in Japan and East Asia with Fuji Xerox where Dell is weak
4. Xerox leadership position in document management outsourcing in Enterprise accounts
5. Xerox attractive price with a market cap at approx. $7B
6. The two companies have been cooperating on several projects lately
