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A turning ship: From PC to BYOC-Acer changes course

Over the past year, Acer has actively collaborated with a number of third party innovators. Three major investments alone have been made public: an increased financial commitment to the social robot enterprise JIBO, the purchase of shares in Revolverobotics, and the acquisition of Xplova, a manufacturer of outdoor GPS products. Even more recently, Acer announced its investment in grandPAD, a tablet computer designed specifically for seniors. These are all seen as essential moves to establish Acer as a key player in the coming age of IoT.

Behind this appetite for innovation lies Acer’s recent downturn, which has spurred its management to execute the most challenging transformation in the company’s forty-year history. To the surprise of many outside observers, a plan was announced for the development of a BYOC (Build Your Own Cloud) platform, marking a significant shift from Acer’s traditional market of PC hardware. Acer’s vision is reflected in the ambitions of its new leaders. Wang Dingkai, the General Manager of the Acer Cloud Application Business Group, said that ‘I came to Acer as an entrepreneur, not as an employee.’

Wang has over twenty years of hard earned experience in Taiwan’s technology industry. Previously, he worked for ADI corp, the manufacturer of security products. They sent him to Paris and Holland, where he learned fluent English. Later, he joined Intel, and took up the reins of the X86 line. With such a rich CV, he’s seen as just the man to steer Acer through uncertain waters. Together with Maverick Shih, the son of Acer founder Stan Shih, Wang is responsible for launching Acer into the Cloud.


Precedent of success more important than profit

Acer now mentions plans for BYOC even more frequently than its PC business. But many are still confused as to what BYOC really is. Wang Dingkai explains:

BYOC provides three things that are summarized by the acronym BOT

B stands for ‘Build’: users are provided with an application environment. They can either directly use the BYOC platform, or ask Acer to build a customized cloud framework.
O stands for ‘Operation.’ When people all over the world are using your Internet service, you need a round-the-clock system for supervision and management. Acer takes care of that.
T stands for ‘Data Transfer’. Acer is currently expanding the capacities of its internal data team, to help customers win new business opportunities.

But breaking into IoT or the Cloud Platform market takes both time and resources. Wang says, ‘Right now, profit isn’t our focus. You need to look at the business from the perspective of critical mass. Only once you’ve reached critical mass, and made the jump over the abyss, does it all become financially viable.’

Embracing Innovation and Communities

But how does Acer intend to reach critical mass? The answer is simple: cooperation. In the two years since it started to develop BYOC, Acer has formed over one hundred industry partnerships. ‘Our goal this year is to create a small number of concrete products that will put us at a strategic advantage.’ In the coming months we can expect to see the BYOC ecosystem enriched by both medium and large market players.

But quite apart from forming key partnerships, Acer has also embraced a change in attitude towards innovation and communities. The sum of investment in grandPAD alone was 360 million NTD. Stan Shih has revealed that Acer has set aside 100 million RMB for the BYOC business to put towards innovation in Mainland China. That’s not to forget the constant interaction between the BYOC team and start-ups around the world. Federcio Musto, the CEO of Arduino, the open source physical computing platform, used to be a software engineer at Acer. Last year, the two companies worked together to develop the ‘Cloud Professor,’ an educational development kit for schools around the world. Their next project, the robotic arm ‘Braccio’, will be on sale within the next six months.

Acer’s transformation, however, has by no means been easy. Wang Dingkai points to problems in IoT that have prevented the industry from accelerating in growth. These include the fierce competition between major manufacturers to set IoT standards, the maturity of application infrastructure, and the most trying problem of finding viable business models. Wang is under no illusion about the challenges that lie ahead, ‘Acer does not have the luxury of time. We must evolve in step with the ecosystem in order to eventually secure a role for ourselves within this market. 2020 will be a milestone year for IoT.

When Wang joined Acer, over a year ago, the main question he asked himself was, ‘How can we encourage coworkers to think of themselves more as entrepreneurs than employees?’ All large companies, Wang adds, face the problem of how to enthuse their workforce. In his first months, plunging profit and employee layoffs had contributed to great uncertainty, which effected performance in the PC branch. Wang, however, urged his coworkers to ‘become like entrepreneurs. Remind yourself that in a struggle, passion is a more reliable ally than dejection.’ Small boats are vulnerable to waves, but large ships often find it difficult to turn. Acer’s strategy is to incorporate the maneuverability of start-up innovation into its business.

Acer’s BYOC business is still in its early stages. The hope behind its strategy is that users will use the cloud platform to innovate, creating opportunities for services provided by Acer. In the short term, this will be difficult to bring to fruition. What is remarkable is Acer’s appetite for change? A company in transition must enjoy the full support of its CEO. But Acer is investing huge resources, instigating change from the top down.

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