Acer, the embattled PC maker less than a month after overhauling its top executive positions, wants to remake itself as a PC vendor that also offers cloud software and services.
The company is looking to leverage the cloud computing capabilities it already has—inherited through such deals as the $320 million acquisition of cloud specialist iGware in 2011—with its strength in PCs and other consumer computing devices to become what officials are calling a “hardware plus software and services” vendor.
A key to that vision will be the company’s Build Your Own Cloud (BYOC) offering, announced Dec. 18 by founder Stan Shih, who returned to the company in November as president and CEO after the executives who previously held those positions resigned following disappointing financial numbers over the past several years.
According to Shih, the company more than a decade ago began to lay the foundation for what would be Acer’s cloud technology, with the development of the Basic Computer (BC) and Specific Usage Computing (XC) initiatives and the Mega Infrastructure, Micro Services idea for e-services as part of a larger vision Acer called its eData Center business. Over the last two years, the company created AcerCloud and apps, a file-sharing and media management solution that enables users to retrieve and share multimedia and data files via a range of computing devices.
The iGware acquisition—Acer renamed the company Acer Cloud Technologies, or ACTI—further enhanced Acer’s capabilities in managing its cloud application platform.
“We are embarking on this transformation based on our existing core capabilities. On the one hand, with our PC and mobile devices we have sufficient strength and scale,” Shih said in a statement, noting the BC and XC concepts. “It can be said we have already sown the seeds for cloud technology long ago. This was further developed two years ago when we acquired iGware … to focus on developing the cloud business.”
Through Acer’s BYOC plan, consumers will be able to build their own personal clouds on their own devices, enabling them to integrate their PC and mobile devices for accessing data, such as music and photos. In addition, Acer will design and enhance its own apps to improve the customer experience, and will offer other software and services to help consumers build their own clouds, according to officials. The self-built clouds will be based on Acer’s Open Platform technology.
Gartner analysts have said personal clouds will grow in popularity during 2014, with consumers using a range of devices and the personal clouds becoming the primary hubs among them.
Acer Looks to Cloud to Offset Slowing PC Sales
Selling software and services will help keep Acer more engaged with its customers after selling a device. With the new offerings, selling a notebook, tablet or smartphone will only be the beginning of the customer engagement, officials said. Acer—like rivals such as Hewlett-Packard and Dell—has been hit hard by the slowdown in PC sales worldwide over the past couple of years. However, the market for PCs plus mobile devices is strong, and those devices will form the foundation for the company’s cloud efforts, officials said.
“BYOC represents Acer’s vision to win in the era of cloud services,” Shih said. “Built on an open platform, our cloud technology follows the [Chinese philosophy] Wangdao mindset to focus on innovative applications for a higher quality of life, and to create value with all stakeholders and share the benefits with them. Acer will strive to strengthen core competencies to create value and to construct a mechanism to balance all interests.”
The idea for BYOC came after two days of meeting with 40 executives, and fits in well with what Acer is looking to achieve through its restructuring efforts, officials said.
It wasn’t that long ago when Acer officials expected netbook sales to propel it to greater heights in the larger PC market, enabling the company to challenge HP and Dell. However, the PC slowdown, fueled by the rise in popularity of tablets and smartphones, has been difficult on Acer. Most recently, Acer’s third-quarter revenues fell 11.8 percent—to $2.11 billion—from the same period in 2012, while losses grew to $86.61 million.
After releasing those financial numbers last month, Acer announced that T.J. Wang was resigning as chairman and CEO, and would be replaced by President Jim Wong. However, within two weeks, Wong resigned, and eventually was replaced by Shih.
Acer’s restructuring plan calls for cutting its workforce by 7 percent to save $100 million in expenses. The company also will shed some products as it looks to streamline its portfolio.