The Moat
Why hasn't Xerox died yet? Everyone uses email. Everyone uses DocuSign. Who prints?
Answer: Lawyers. Governments. Hospitals. Schools. The "Bureaucracy Economy" runs on paper.
The Sticky Contract
Xerox doesn't just sell a printer. They sell a "Managed Print Service" (MPS) contract.
- 5-Year Lock-in.
- Per-page pricing.
- Service SLAs (breaks in 4 hours -> fixed in 4 hours).
This is a High Switching Cost business. Changing 5,000 printers across a hospital network is a nightmare. CIOs don't want to do it unless they have to.
The Strategy: We don't need to win new clients. We just need to raise prices on the existing ones. If volume drops 5% but price rises 5%, revenue is flat. And margins go UP (less toner used, same price).