Taking care of business

Acer is making a lunge for the business channel and is set to exploit fallout from HP's direct sales tactics, says Doug Woodburn

Hungary for the professional market: At its press conference in Budapest, Acer made it clear that its target extends beyond the consumer market

It is no secret that Acer’s meteoric rise to third place in the global PC standings has come mainly off the back of its success in the consumer space. In the UK, 80 per cent of the Taiwanese vendor’s sales still come from its Aspire consumer range.

But David Drummond, who took the reins as Acer UK managing director in June, signalled that wooing the professional channel will be a top priority.

Drummond was previously managing director for Acer Africa, where the professional market generated 60 per cent of his sales.

Speaking to CRN at the vendor’s recent annual press summit in Budapest, Drummond said: “The focus on the professional space has not been there [in the UK], but it is not fair to say that Acer does not have relevance in that space. It is not cast in stone that Acer is consumer only; we can compete well on deals of up to 1,000 seats.”

Acer faces a major obstacle to growth after over-stocking issues in the first half prompted many VARs to turn their back on the
vendor. Distributors were forced to move large volumes of inventory through big e-tailers, which Drummond admitted “muddied the water on pricing”.

This has taken its toll on Acer’s base of unmanaged dealers, which has fallen from between 2,500 and 3,000 to 1,800 in recent months.

Barry Dodhia, marketing manager at VAR Hemini, said: “The primary reason why we have not done much business with Acer is that it was going out into the market and trying to move equipment at ridiculous prices. Some of its products are quite good, but sometimes its management have done silly things and that has taken it back two or three hurdles.”

Drummond insisted those issues are behind Acer, and that 90 per cent of its stock is now less than 60 days old following significant action to cut inventory. The vendor is working with its distributors, Micro Peripherals, Ingram Micro, Computer 2000 and ETC, to attract more via incentives, he added.

“There were a lot of big deals through e-tailers and direct marketing resellers, which damaged our breadth of account reach,” Drummond conceded.

“If you are a VAR sending out quotations and there is all this insanity around you, you will look to another brand. That is all in the past now, but we will not win back the dealers overnight and will have to keep plugging away.”

Drummond said Acer will position itself as a logical choice for HP partners disillusioned by the vendor’s recent acquisition of
services giant EDS.

Increasing Acer’s base of unmanaged accounts, which buy from distribution and make less than one purchase a month,
would feed through to the whole ecosystem of partners as smaller resellers move up the food chain, he added.

At a higher level than unmanaged accounts, Acer has about 500 Connect partners that are handled by its telesales team. They spend £5,000 to £40,000 with Acer a year.

Then there are about 150 Active and Point resellers, which are dealt with by Acer’s outbound sales force. And at the highest level, Acer has a national reseller team that focuses on large DMRs and VARs such as Dabs, DSGi Business and Misco, and 10 active solution partners with capabilities around servers and storage.
Drummond maintained that Acer is the only top-five systems vendor with a 100 per cent indirect strategy that offers the full range of technology from notebooks and desktops to servers and screens.

However, Acer’s plans to replicate its consumer success in the business space met with a mixed reaction from resellers.
Andrew Henderson, commercial director at VAR Lanway, claimed that only Dell could challenge HP in the professional market.

“Channel stuffing is not Acer’s main issue. You are not going to see corporate businesses taking on Acer as it is perceived to be a consumer brand,” he said.

Hemini’s Dodhia said: “Acer’s partner base is primarily online businesses. It was pushing lots of gear through them and it has not paid off. I guess it has become wiser and is changing its approach ­ and we now hope to grow our business with them.”
Dodhia added that Hemini had begun to question some of HP’s recent activities. “It excites us when someone says they do not want resellers out of the loop,” he said.
Mike Gammie, IT services development manager at Misco, said: “Acer has certainly improved over the past few months and is looking like a stronger player all round.”