Xerox is making a significant business process services (BPS) acquisition in the UK with the purchase of Poole-based WDS Ltd (Wireless Data Services), a specialist in technical support and analysis for the wireless telecoms market.
Although terms of the deal weren’t disclosed, we can see from WDS’ most recent filed accounts at Companies House,it hasn’t been in the best of health. It made revenue of £56.4m in the year ended 31 December 2010, although this was down 9% on the previous year. It also made an operating loss of £2.8m vs. a profit of £1.9m. So why is Xerox buying the company?
WDS has an impressive list of clients from the wireless telecoms and handset sectors including Vodafone, Orange, AT&T, Virgin Mobile, 3, Nokia, HTC, Samsung, Google, Microsoft, as well as service partners such as HP, Alcatel-Lucent and Gemalto. Three-quarters of WDS’ revenue is made in the US and Canada – the largest market globally for telecoms - although this was also the market which caused most of the revenue decline in FY10. The UK and Asia Pacific meanwhile grew almost 50% to £4.4m and £9.4m respectively. Clearly we don’t expect this deal to boost Xerox’s position in our UK BPS rankings significantly.
WDS actually employs over 2,000 people in the US, UK, South Africa, Singapore, Australia and New Zealand. So it is well spread geographically, and therefore should fit neatly into Xerox’s global customer care operations, where it already has 48,000 call centre employees across 150 locations – mostly from the ACS takeover (see Xerox: ACS ‘RIP’).
WDS’ real USP is its GlobalMine cloud platform, which is hosted off-premise for clients and captures information about devices, services, settings, usability problems and fixes. WDS apparently uses this data to help clients adjust, in real-time, any systemic issues and/or customer experience problems that their end-users may be experiencing. Xerox will no doubt now look to cross-sell this capability into its other wireless telecoms clients, as well as up-sell its broader portolio of BP services into WDS' impressive client list.
Particularly interesting for us is the deal marks another example of a growing trend we see for BPS suppliers to build or acquire platform capability, from which they can then offer value-added services for their clients, often on-demand (see our newly published report UK BPS Market Trends & Forecast – 2012 for further insight on this).