Acer and the indirect guide to success
In an exclusive interview, Gianfranco Lanci. the Acer worldwide president, spoke to CRN about his plans for the company and why he is totally committed to the indirect model. Laura Hailstone reports from Athens
At its global press conference in Athens last week, Acer stressed its commitment to remain indirect and revealed plans to grow in the corporate space. Gianfranco Lanci, Acer’s worldwide president, said: “We are 100 per cent focused on an indirect model. I’m not saying that indirect is better than direct, or vice versa, but we believe that manufacturers should choose one or the other. It is very difficult to run both models at the same time and remain successful.
“Profitability remains a major concern for the entire PC industry. Consolidation will continue during the near future and probably only a limited number of players will remain within the next two to three years. In this type of mature market, cost control, the business model and economies of scale are the key elements of success.”
Speaking exclusively to CRN, Lanci said that Acer wanted to expand in major countries, including the UK. “We will look to expand our business in the corporate market through the channel. We have some very good resellers in the UK but will look to take on more to address the corporate expansion,” Lanci said.
Asked why the corporate business has been slow to grow for Acer, Paul Cook, Acer UK’s managing director, said: “We take methodical, considered steps and it was important to us to form a bedrock of customers through a breadth of resellers. If you look back, the corporate market has not been growing very quickly and has been ultra competitive, so we considered that we would be better placed to go after the SME market first, which we did and have been very successful at. We are the fastest growing vendor in Europe and in the UK.
“We now have some sales resource that is dedicated to growing business in the corporate space, and we hope to use this to work very closely with the top 10 or 12 corporate resellers. There’s only so many times that Hewlett-Packard can suggest they want to take resellers’ customers away. Eventually the penny will drop with the corporate VARs and they will realise that it is time they partner with an organisation that isn’t going to bite the hand that feeds them.”
Cook claimed Acer is the only channel-friendly manufacturer left. “We must be the only manufacturer that does not have any of our business going direct. That is the strength of our business model: channel only, keep the costs low and keep the products good,” he said.
Acer currently has around 5,000 VARs in the UK, and distributes through Computer 2000, Northamber, Midwich, Ingram Micro, Alliance Services and ETC/SCH Group.
“Of our 5,000 resellers, around 3,500 are what I would class as active, meaning those that buy from us at least once a month,” Cook said.
Acer highlighted that its cost base in the UK is under five per cent. “The cost base of our competitors is at
least double that, this means there is five per cent that we can put on
the table for our distributors/resellers over and above our competitors,” Cook said.
Bob Armao, chief executive of online reseller ebuyer, said: “We are a big customer of Acer’s. The demand for Acer products is good, both in our UK and US businesses – which is probably due to Acer’s affordable price points. I have a lot of respect for Acer.”
John Turner, business manager for computing at Midwich, said: “We have been dealing with Acer for 10 years and it is now our biggest selling brand. We started out handling just its notebooks, but as it diversified into other areas, we now handle its monitors, LCDs, PDAs, digital cameras, projectors and desktop PCs.
“Acer has always had very cost-effective products. It has been rapidly growing over the last few years. It drives very hard and never takes its foot off the pedal. Acer is always wanting to grow.
The drive now is for us to try and get more traditional resellers selling Acer. A lot of its products are sold through online resellers but we are being encouraged more to get traditional resellers to sell Acer.”