Acer's difficult transition to cloud computing or the fate of "prostitution"

Taiwan's development of its own brands, represented by Acer and HTC, has two major dilemmas, the first being "a lot of knowledge about products, too little understanding of customers" and the second is that when the trend is transferred, Taiwanese companies fail to respond in time, thus missing business opportunities.

Cloud computing is not a panacea, and Acer faces a more difficult transition than the previous two.

Acer, the world's fourth-largest PC maker, has been dragged into the "danger zone" by the advent of netbooks.

Today, Acer is in the midst of an industry transition. As the PC age declined and the entire Taiwan technology industry plunged into a slump, Acer founder Shih again, trying to reinvent Acer for a third time.

Over seven years of Shih looking for a seemingly panacea for the cloud, but, before this, Dell, Hewlett-Packard have invariably chosen this direction, but ineffective. What's the Shih?

Third time reengineering

Excellent engineers, traditional Chinese businessmen, pioneer managers and international entrepreneurs, with lofty ambitions and broad vision. This is the United States "business Weekly" to Shih evaluation.

Acer's net loss amounted to NT $13.12 billion ($ 446 million trillion) in the third quarter of last year. And in the earnings announcement, the company's original CEO Wang, the original President Wong successively resigned, Shih again. Last month, Acer named TSMC's former sales director, Chen, as the new CEO.

Can Shih revive Acer again? The answer may be grim.

According to Acer's fourth-quarter earnings, released a few days ago, its revenues were NT $86.7 billion ($ 2.869 billion), down 5.9% per cent. Net loss of NT $7.63 billion ($ 254 million) and a net loss of NT $3.37 billion ($ 113 million) over a year earlier.

Jia Jinghua, an IT observer, points out that the last time Acer was in crisis, it was Shih Italian Lanci, the CEO of the company, who brought Acer into trouble through innovative marketing. In the past two years, the PC market has been shrinking, the tablet computer, smartphone market boom, but Acer has been holding the PC this tree, the transformation of the road is very difficult.

In one of the two changes to Acer, Shih a simplification of Acer's business into branding and manufacturing, and, on the other, made Acer focus on branding, and the two-time strategy has facilitated Acer's rapid growth. It is noteworthy that the two previous Acer restructuring background is: The company's internal strategy is problematic or the overall economy is not booming, but this time the face of the PC industry structural transformation. That is, profit centers or sources of profit need to be radically changed.

The shih of the mountain, after two days of meetings and discussions with nearly 40 senior executives, the basic vision for a change will be achieved: the future Acer will be dedicated to making users Jianyun (build Your Own Cloud) from hardware companies to hardware + software + services;

As envisioned, future Acer will not only sell hardware, also add software and services, allowing consumers to build their own machines on the cloud, such as music cloud, photo cloud and other types of cloud, these self-built cloud built on the open platform (Acer open Platform), with reliable, easy-to-use and enjoy three features, And the service will be more and more.

There are four core roles in the ecosystem of cloud computing: Owners, builders, operators, and users. User refers to the end users of a variety of cloud computing services; Builders refer to Vendors who build cloud environments, including suppliers of various basic resources, solutions and services, such as hardware and software products, information security, payment, network services, etc., as well as integrated cloud environments Owner refers to the various IT assets of the cloud services (including hardware and software assets), and the operator is the manufacturer responsible for the later operations, maintenance, and management of the cloud computing environment and services. In most cases, the owner and operator may be the same manufacturer.

"For traditional IT companies, when it comes to cloud computing, you need to take into account the short-term and medium-to long-term roles that companies want to play in the cloud ecosystem." "A Chinese engineer who worked on Amazon's cloud computing business told the first financial daily that at the moment, cloud computing services are divided into two areas of public and private cloud, and Acer prefers to make a difference in the area of personal cloud." With the exception of Amazon, Apple, Google and so on in the cloud computing field "first step", Acer is still a step too late.

In its view, the core of Acer's brand focus on channel management, lack of software base, not to mention the strength of soft and hardware integration, while the other two PC manufacturers Hewlett-Packard, Dell, is the cloud computing + server route, the foundation is relatively mature, but the transformation is not satisfactory.

In the short term, Acer's expected new profit centre is at least not financially evident. Chen recently admitted that Acer was still in the early stages of promoting cloud computing services known as "Build Your Own Cloud," but said Acer plans to generate revenue through cloud computing services once it has a large enough user base.

Transition barriers

Acer, which was founded in 1976, divided its own brand and foundry brand into Acer (ACER), BenQ (BenQ), Wistron (weft-capital) in 2002. Acer focuses on personal computers for its own brands, BenQ is also the independent brand, the main digital products, weft Chuang Capital of the main foundry business, which is the important part of its growth. Since then, Acer has entered a fast-expanding period to acquire companies such as Gateway and Packard Bell. 2009, Acer won the world's second-largest PC giant with the help of netbooks.

But, soon after Acer's success in betting on netbooks, it was snatched by the iphone and ipad, and the netbook business was shrinking at an instant from boiling point to freezing.

"Chengye Xiao". Acer's past successes depend more on the strong alliance of Microsoft and Intel (Wintel) Wintel soft and hardware specifications, and then to quickly a large number of products into the market, it does not need to invest too much research and development, or even manufacturing outsourcing, can significantly reduce costs, low-cost access to the market to achieve economies of scale.

As a result of its success, Acer's internal development has not been unified in the face of the mobile device market, and the conservative forces, led by Wang, believe Acer cannot shake the foundations of its PC business. Although the mobile phone business has been attempted, it has not been the focus of business, but the treasure on the tablet, and once again missed the opportunity.

As an example, in 2008, Acer bought a mobile phone on the basis of NT $6 billion. But a few years later, once a little bit of the momentum of the mobile phone has long been missing, Acer's mobile phone is still in the water test phase, a year of optimistic estimates of shipments are only 1 million ~ 2 million.

"Although Acer knows its products well, it may not know the customer so well that it cannot make customers die of loyalty," he said. Zhu Bo, author of the Blue Ocean Strategy Taiwan Edition and professor of Management science at Jiaotong University in Taiwan, points out deeper problems: Acer, HTC and other representative of Taiwan's development of its own brands have two difficulties, the first is "a lot of knowledge of products, too little understanding of customers"; the second is that when the trend is transferred, Taiwanese companies cannot react in time , thus missing the opportunity.

For the former, Zhu Bo analysis says, Taiwan's brand has always been to product and price-leading peers, the attraction is to decide whether to buy the consumer price, this budget-minded consumers, loyalty is not high, the next product launch, the same as the price to judge, when other companies have more suitable products, Just buy something else. In addition, Acer is selling products through distributors, not direct contact with customers, but Apple and Samsung have direct selling to consumers of terminal positions, in understanding the customer this point, Apple, Samsung is obviously much better.

This kind of thinking with the starting point of price ratio is a typical hardware thinking. When the industry's game rules changed, hardware profits were compressed, software and apps were profitable, Acer did not see the brilliance of the PC as a spent, and was on the move, complacent.

or be acquired

To a certain extent, Shih again in the same way as Lenovo founder Liu's comeback in 2009.

Liu was just fading out of the management of Lenovo Group, but did not really retire, but with Lenovo Holdings as a stage in the higher front-line fight, and Shih is the real recuperation, 10 years of energy spent on the culture and public welfare, how long it will take to restore the sensitivity of the former trader is still unknown.

Taiwanese entrepreneurs close to Shih say the bigger problem is the health risks of the 70-year-old, Shih's health, but the number of heart bypass grafts has reached double-digit levels, and it has been hard to withstand a high level of corporate governance, adding to the worries of Acer's recycling efforts.

Yi, Secretary general of China Internet Industry Association, believes that Taiwan's local market space is too small to have the most critical industry standards defined by the technology industry, such as operating system source code, basic communications patents. Taiwanese companies will not choose the Korean model and do their best to build a brand, so they can only take international routes.

The result is that, when the development is smooth, natural worry, once the cold snap, strategic contraction, it is easy to collapse. Because the company is an international system, it is huge, but Taiwan's domestic market is not enough to support its operations.

If Shih cannot save Acer, what path will Acer embark on? In the current Acer market performance, the final answer may be like Nokia, Motorola and other mergers and acquisitions.

Currently, Acer has three main "gossip" objects, namely Lenovo, Asus and HTC. Lenovo, which had clearly expressed its willingness to buy at the helm of the day, Wang a few years ago, but Lenovo's focus has turned to PC, and there have been frequent rumours of a new scramble for IBM's low-end servers, and Acer, a PC-only business, is not an ideal acquisition target. Similarly, there are rumors of Dell, Hewlett-Packard and other acquisition objects.

Unexpectedly, another PC maker Asus. Overseas capital markets have been suggested that Acer and ASUS merged to form a "double a" combination; Asus ' Shih is one of the seven Acer startups, with two companies in a similar atmosphere and the least difficult to merge. Earlier, Shih also publicly said to let its natural, Shih said to be open minded. If the two merge, is not in essence transformational mergers and acquisitions, but merged into a PC giant, or to face the current transformation of the PC industry choices.

and HTC combined with "Double macro" is the Taiwan Media Hot topic. HTC and Acer are complementary to the product line, is expected to replicate Lenovo's "PC" transformation of the road, the outlook is more optimistic about the capital market. But in the smartphone market, HTC is also in the midst of a transformation, and it is hard to guarantee that the combination of the two must be 1+1 greater than 2.

(Responsible editor: The good of the Legacy)