Xerox To Revamp Healthcare IT Business

Xerox Corp said it would overhaul its healthcare IT business and record a related impairment charge of about $145 million in the second quarter.

The company said it would end sales of its integrated eligibility system, a software system which can support operations in call centers and document imaging.

The healthcare business provides administrative and care management solutions to state Medicaid programs and government healthcare programs.

“Going forward, Xerox will focus on managing and completing the current Health Enterprise implementations, and will be highly selective in responding to new Medicaid Management Information System opportunities,” the company said on Friday.

The healthcare business contributes “$2 billion plus” to total revenue, a company spokeswoman said. The company reported total revenue of $19.54 billion for 2014.

“Basically, they are focusing their government healthcare business away from less profitable initiatives that they were pursuing. I see it as a positive,” Cross Research analyst Shannon Cross said.

“From a long-term stand point, it (Medicaid) is a profitable business,” Cross said.

Xerox, which has been shifting its focus to IT services from making printers and copiers, adjusted its earnings estimate for the quarter ended June to reflect the charge.

The company said it now expects earnings from continuing operations of 9-11 cents per share, below its prior guidance of 17-19 cents per share.

Shares of Xerox, which is expected to report second-quarter results on July 24, were up 1.6 percent at $10.79 in afternoon trading.

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Will HP Dump Snapfish?

Hewlett-Packard Co is taking a look at putting its web-based photo sharing service Snapfish on the block, and has held discussions with multiple private equity and industry buyers, a person with knowledge of the situation said.

Snapfish, which HP bought for more than $300 million in 2005 and currently sits within its printing and personal systems group, is considered non-core for the company, the person said, asking not to be named because the matter is not public.

A spokesman for HP declined to comment.

Last year, HP replaced the printing and personal business’ long-time head Todd Bradley with former Lenovo executive Dion Weisler. Bradley has since left the technology company, to join Tibco Software Inc as its president.

Some of the parties that have been eyeing Snapfish have also expressed interest in buying another online photo-sharing services provider, Shutterfly Inc, the person said.

Shutterfly hired Frank Quattrone’s Qatalyst Partners over the summer to find a buyer, and is expected wrap up its process in the next several weeks, people familiar with the matter have said previously.

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Amazon Goes 3D

Amazon.com Inc will offer 3D printing services that allow customers to customize and build earrings, bobble head toys and other items from third-party vendors using a new personalization option on its website.

Most of the more than 200 items available on the company’s new 3D printed products store, which was rolled out on Monday, can be customized using a new feature that allows users to rotate and change the item they are viewing.

Before it is printed by one of Amazon’s sellers, users can customize a product like as a bobble head figure by changing its skin and eye color, hair style and outfit, Amazon said.

“The customization is something we’re keenly interested in,” said Petra Schindler-Carter, director for Amazon marketplace sales, speaking in an interview. “We’ll always look for new applications for that.”

Amazon, which has more than 240 million users, has expanded its marketplaces division to include new areas such as fine art and wine. It is part of Amazon’s larger investment into new areas like mobile services and original content that led to its larger-than-expected second-quarter loss last week.

The new printing option taps into a broader “Maker movement” among tech entrepreneurs in northern California, and to some extent Europe, that is focused on customizing 3D objects rather than development software or mobile applications.

3D printers have gained in popularity on Amazon Supply, a wholesale site for businesses. That interest led Amazon to offer customers an 3D print option, Schindler-Carter said.

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Marvell’s Future Brightens

Marvell reported a more-than-expected 112 percent rise in profit, helped by strong demand from storage and networking companies, and said it expected its mobile business to pick up in the current quarter.

Marvell forecast first-quarter revenue between $870 and $910 million, which is above what the cocaine nose jobs of Wall Street predicted. Chief Executive Sehat Sutardja said that in his company’s first quarter, he was expecting some revenue and unit growth for our 4G LTE mobile platform from multiple customers. Marvell said results were not so hot in the mobile business in the fourth quarter as some customers delayed product launches.

The company, which also makes communications and processor products used in mobile phones, said net income doubled to $106.6 million, or 21 cents per share, in the quarter ended February 1 from $50.2 million, or 9 cents per share, a year earlier.
Revenue rose to $931.7 million, beating analysts’ estimate of $901.1 million.

Marvell’s biggest customer is Western Digital which reported better-than-expected quarterly results in January, citing strength in its gaming and notebook business.

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App Stores For Supercomputers Enroute

A major problem facing supercomputing is that the firms that could benefit most from the technology, aren’t using it. It is a dilemma.

Supercomputer-based visualization and simulation tools could allow a company to create, test and prototype products in virtual environments. Couple this virtualization capability with a 3-D printer, and a company would revolutionize its manufacturing.

But licensing fees for the software needed to simulate wind tunnels, ovens, welds and other processes are expensive, and the tools require large multicore systems and skilled engineers to use them.

One possible solution: taking an HPC process and converting it into an app.

This is how it might work: A manufacturer designing a part to reduce drag on an 18-wheel truck could upload a CAD file, plug in some parameters, hit start and let it use 128 cores of the Ohio Supercomputer Center’s (OSC) 8,500 core system. The cost would likely be anywhere from $200 to $500 for a 6,000 CPU hour run, or about 48 hours, to simulate the process and package the results up in a report.

Testing that 18-wheeler in a physical wind tunnel could cost as much $100,000.

Alan Chalker, the director of the OSC’s AweSim program, uses that example to explain what his organization is trying to do. The new group has some $6.5 million from government and private groups, including consumer products giant Procter & Gamble, to find ways to bring HPC to manufacturers via an app store.

The app store is slated to open at the end of the first quarter of next year, with one app and several tools that have been ported for the Web. The plan is to eventually spin-off AweSim into a private firm, and populate the app store with thousands of apps.

Tom Lange, director of modeling and simulation in P&G’s corporate R&D group, said he hopes that AweSim’s tools will be used for the company’s supply chain.

The software industry model is based on selling licenses, which for an HPC application can cost $50,000 a year, said Lange. That price is well out of the reach of small manufacturers interested in fixing just one problem. “What they really want is an app,” he said.

Lange said P&G has worked with supply chain partners on HPC issues, but it can be difficult because of the complexities of the relationship.

“The small supplier doesn’t want to be beholden to P&G,” said Lange. “They have an independent business and they want to be independent and they should be.”

That’s one of the reasons he likes AweSim.

AweSim will use some open source HPC tools in its apps, and are also working on agreements with major HPC software vendors to make parts of their tools available through an app.

Chalker said software vendors are interested in working with AweSim because it’s a way to get to a market that’s inaccessible today. The vendors could get some licensing fees for an app and a potential customer for larger, more expensive apps in the future.

AweSim is an outgrowth of the Blue Collar Computing initiative that started at OSC in the mid-2000s with goals similar to AweSim’s. But that program required that users purchase a lot of costly consulting work. The app store’s approach is to minimize cost, and the need for consulting help, as much as possible.

Chalker has a half dozen apps already built, including one used in the truck example. The OSC is building a software development kit to make it possible for others to build them as well. One goal is to eventually enable other supercomputing centers to provide compute capacity for the apps.

AweSim will charge users a fixed rate for CPUs, covering just the costs, and will provide consulting expertise where it is needed. Consulting fees may raise the bill for users, but Chalker said it usually wouldn’t be more than a few thousand dollars, a lot less than hiring a full-time computer scientist.

The AweSim team expects that many app users, a mechanical engineer for instance, will know enough to work with an app without the help of a computational fluid dynamics expert.

Lange says that manufacturers understand that producing domestically rather than overseas requires making products better, being innovative and not wasting resources. “You have to be committed to innovate what you make, and you have to commit to innovating how you make it,” said Lange, who sees HPC as a path to get there.

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3D Printer Goes Retail

MakerBot, a 3D printer maker which opened two new retail stores last week, is among the companies trying to bring the cutting-edge digital manufacturing technology to Main Street consumers, but skeptics say the debut may be premature.

MakerBot, a unit of Stratasys Ltd, opened retail stores this week in Boston and in Greenwich, Connecticut, both of which are twice the size of MakerBot’s first store, 1,500 square feet in downtown Manhattan.

The company offers designs for more than 100,000 items through its “Thingiverse” online user community. The products range from knick-knacks like zombie sculptures to jewelry, sink drains and even medical devices. They are printed using its line of corn-based plastic fibers in more than a dozen colors.

“For most people 3D printing is futuristic science fiction. We’re here to make it real,” said CEO Bre Pettis, who cut the ribbon at the store on Boston’s fashionable Newbury Street using scissors made on one of MakerBot’s Replicator printers which start at $2,199.

Pettis, who has purchased splashy magazine ads to promote 3D printers as holiday gifts, believes there could soon be a 3D printer on every block in America.

Yet some technology experts say 3D printers may not be ready for prime time because they are still much less user friendly than most modern consumer electronics.

“There is so much hype,” said Pete Basiliere, an analyst at technology research firm Gartner. “People are getting a little bit misled as to how easy it is,” he said.

Some investors also are skeptical of 3D printing’s readiness for the market. Short-seller Citron this week published an article questioning the earnings of Germany’s voxeljet AG’s, and shares in the sector fell, including those of MakerBot parent Stratasys and rivals 3D Systems Corp and ExOne Co.

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Inventor Predicts Future Of 3D

Pablos Holman predicts that in the not too distant future our diets will be tailored to our metabolisms, adding a few bits of broccoli, a smattering of beets and some meat — all extruded from a 3D printer in an appetizing form to please our palates.

Holman is a futurist and inventor at the Intellectual Ventures Laboratory in Bellevue, Wash., where he and others work on futuristic projects like printable food. He was not alone in speaking on the topic at the Inside 3D Printing Conference last week.

Avi Reichentall, CEO of 3D Systems, one of the largest consumer printer companies, has already been able to configure his machines to create a variety of sugary goods, including cakes and candy. The sweets were on display with ornate designs.

Reichentall said consumers can expect his company to build a machine that will take a place next to the coffee maker on a kitchen counter, but instead of a caffeine shot, it will offer a sugar rush.

“We are working on a chocolate printer. I want a chocolate printer in my kitchen. I want it to be as cool as a Keurig coffee maker,” Reichentall said. “We now have 3D printed sugar. We’re going to bring to pastry chefs and confectionaries and bakers a whole range of new sugar printing capabilities.

“This is coming to a marketplace near you very soon,” he said.

While Reichentall focuses on desserts, Holman is busy with main courses, creating machines that can take freeze-dried food and hydrate it as it is being extruded through nozzles to create an eye-pleasing meal.

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Marvell Loses In Court

A federal judge denied Marvell’s request to declare a mistrial in a patent infringement case in which a jury awarded $1.17 billion in damages to Carnegie Mellon University.

Carnegie Mellon sued Marvell in March 2009 over patents issued in 2001 and 2002 related to how accurately hard disk-drive circuits read data from high-speed magnetic disks. The suit involved nine Marvell circuits which incorporated the patents, and that the infringement let the Bermuda outfit blog billions of chips with its tech on board.

The damages award in December 2012 was one of the largest by a US jury in a patent infringement case. Marvell asked the judge to declare a mistrial and it claimed that Carnegie Mellon’s lawyer made improper, misleading and prejudicial comments during closing arguments that “inflamed” the jury.

US District Judge Nora Barry Fischer in Pittsburgh federal court disagreed and said that Marvell was trying to do what it could not do at trial convince the court to throw out this case and have another crack at it. Marvel has said that it will appeal so this case will run and run.

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Will 3D Printing Take Off?

The use of cheaper 3D printing is set to take off when a batch of patents expires in 2014.

Duann Scott, design evangelist at 3D printing company Shapeways said that in February 2014, key patents that currently prevent competition in the market for the most advanced and functional 3D printers will expire. The important patent is one which covers “laser sintering” which is the lowest-cost 3D printing technology. Because of its high resolution in all three dimensions, laser sintering can produce goods that can be sold as finished products.

At the moment it is only possible to buy expensive 3D laser sintering printers, which can cost tens of thousands of dollars each. But once the key patents on 3D printing via laser sintering expire, we could see huge drop in the price of these devices, says Scott.

Key patents expired on a more primitive form of 3D printing, known as fused deposition modelling resulted in an explosion of open-source FDM printers that eventually led to iconic home and hobbyist 3D printer manufacturer Makerbot. When the patents on FDM expired the cost of such printers fell as little as $300. Scott thinks that the same thing will happen with laser deposition 3D printers.

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Xerox Moving Into IT Services

Printer and copier maker Xerox Corp forecast current-quarter earnings below estimates as it quickens efforts to transform itself into a technology services provider.

Xerox, whose shares were little changed at midday, also offers services such as managing toll systems and healthcare programs to counter sluggish growth in its printers and copiers business, which accounts for about 40 percent of its revenue.

Services is now the larger part of the company’s business and lower margins in IT and business process outsourcing is dragging overall margins.

The company said it expects second-quarter revenue from its document technology business, which includes printers and copiers, to decline in the mid-single digits. Revenue fell 9 percent to $2.14 billion in the business in the first quarter.

Based in Norwalk, Connecticut, Xerox moved into business services with its purchase of Affiliated Computer Services Inc (ACS) for $5.5 billion in 2009 – the company’s biggest deal in its 106-year history.

Xerox said it plans to quicken the pace of a restructuring plan kicked off in the last quarter of 2012 and included a 2-cent restructuring charge in its second-quarter forecast.

Xerox said it expects flattish revenue for the full year, compared with previous expectations of up to a 2 percent growth, it said on a conference call with analysts.

The company said it was on track to reach its target of adjusted EPS of $1.09 to $1.15 for the full year and to generate operating cash flow of $2.1 billion to $2.4 billion.

“Europe remains weak. US remains stable, but weak. We have not seen a pickup in the US,” Xerox CEO Ursula Burns said on a conference call with analysts.

“We did see a slowdown, a bit of a slowdown, in some developing market economies. But our business model is fairly resilient in the developing markets,” she said.

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