Acer Makes Major Server, Storage, Channel Push In U.S.

Acer on Monday made its most significant product release in the U.S. with the release of a full range of business-class servers and storage, including storage arrays resulting from a reseller deal with Hitachi Data Systems.

For Acer, which has had a very minor presence in the U.S. server market and virtually no business-class storage offering, the new product lines represent a major attempt to be one of the world's premier IT vendors and step up the competition against rivals Hewlett-Packard and Dell.

In addition to the new product lines, Acer has also invested in a complete support infrastructure for its business customers, and plans to serve those customers with a 100-percent indirect channel model.

Acer is building this new business on the back of a strong commercial and consumer PC market and using the experience in business products garnered over the last year in Europe, said Todd Mottershead, the company's senior manager for server and storage in the U.S.

"About one year ago, we launched server and storage products in Europe to test the market," Mottershead said. "Now we're bringing it to the U.S."

Acer is introducing a full line of one-processor or two-processor towers, one-processor to four-processor rack mount servers, blade with Ethernet and InfiniBand connectivity options, and multi-node servers for running multiple applications in cloud environments, Mottershead said.

"We made the strategic decision to launch with a full range of products that matches up well with companies like HP and Dell," Mottershead said. "They've gone through a strong development and quality process. And based on the numbers we're seeing from our Europe business, our quality is second to none."

On the storage side, Acer is working with Hitachi Data Systems to offer a that vendor's AMS midrange SAN array, an entry-level SAN array, a high-end NAS appliance, and an entry to midrange NAS appliance. The entry-level SAN array competes solidly with HP's MSA array, he said. The AMS array will be co-branded with both the Acer and Hitachi name, Mottershead said. The high-end NAS will be sold with its original Hitachi brand, while the other two products will carry the Acer brand, he said. For HDS, the deal represents a good opportunity to recover U.S. market share since Oracle ended its storage reseller relationship with the company in the wake of Oracle's acquisition of Sun Microelectronics.

For Acer, this product introduction is more than just bringing in new product lines. The company is opening its first U.S. competency center in Temple, Texas, and staffing it with technicians to help solution providers with configuration, installation, implementation, training, and proof of concept support, as well as help in solving compatibility issues related to customers' choice of such components as network interface cards.

The new server and storage product line is coming to market with a 100 percent channel model, and is currently building its channel-support infrastructure and channel program, Mottershead said. He said he expects to have all the partner tools in place by mid-year.

Next: New Channel, New Way To Do Business

"We will be the only tier-one manufacturer not selling direct," he said. "We won't compete against partners. We believe they deliver value. We don't want to get in their way."

Acer is also bringing in what Mottershead called a new way to do business in the business storage and server market.

Like other server vendors, Acer will price its server and storage products very competitively, Mottershead said. However, he said, while other vendors charge a 30 percent to 40 percent premium for extras such as hard drives, Acer plans to sell those products at market prices.

For instance, he said, a 2-TB hard drive might cost $200 in the open market, but other vendors will add a carrier and charge $400, Mottershead said.

"We're not going to do this to make money," he said. "We are going to focus on our servers. We'll sell our hard drives and memory up to 40 percent less than competitors' list price. That's a pretty big hit, considering it accounts for about 30 percent of the server business."

While Acer previously has had only a limited server business and virtually no storage business in the U.S., it is bringing a wealth of experience with the new lines.

Acer has been selling a full server and storage line in Europe for the last year, Mottershead said. Furthermore, Mottershead comes from HP, where he ran that company's ProLiant four-socket server and Smart Array storage controller business. He said his entire team has HP and Compaq experience.

Acer will take advantage of its well-known "Acer" brand in the U.S. market. However, in Europe, all these products are sold with the "Gateway" brand, which is well-known there in the commercial market. Acer in 2007 acquired Gateway for $710 million.

Using separate brands for Europe and the U.S. has another advantage in that it reduces the chance of grey market trading, Mottershead said.

"The grey market can have strong issues for the channel," he said. "When doing a promotion, nothing is more challenging for partners and vendors to see a bunch of products from the outside dumped on the market. Partners will not have to worry about dumping of products from overseas, or about unscrupulous pricing."