Bloomberg News

Acer Offers Cloud Hosted by PCs in Challenge to Amazon

June 06, 2014

Acer Inc. (2353) is getting into the cloud-computing business to compete with the likes of Amazon.com Inc. and Google Inc. The difference is the maker of notebooks wants you to host the service on your own personal computer.

Its private cloud offers more security than rival services that store information on off-site servers, according to the Taipei-based company. Acer’s software to operate a personal cloud is free and compatible with a wide variety of smartphones, tablets and computers, according to the company.

Facing a third straight annual loss, co-founder and Chairman Stan Shih came out of retirement in November to help lead a revival at the business as demand for PCs slumps. Amid the company’s $691 million loss last year, the fledgling cloud services unit was a lonely bright spot, turning a small profit.

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“I’d like to see more than 50 percent of profit from non-PC as quick as possible,” Shih said, referring to the company’s cloud-computing business. He spoke in an interview with Bloomberg News at the company’s Aspire Park campus in Lungtan, northern Taiwan May 29.

That cloud services unit generated NT$1.3 billion ($43 million) in revenue last year from clients including Bank of America Corp. and UBS AG, said Rex Wu, a vice president at the company. That’s less than 1 percent of Acer’s NT$360 billion in revenue for the year.

Privacy Risks

Acer rose 6.9 percent, the most since July 2013, to NT$22.40 in Taipei trading yesterday. Taiwan’s benchmark Taiex index lost 0.1 percent.

To compete with services from Google and Amazon, Acer is opening its cloud platform to programmers and making it compatible with as many devices as possible, Shih said in the interview. The company is positioning itself to capture growing demand for data storage and applications powered by the rise of Web-connected devices across homes, cities and workplaces.

The market for the so-called Internet of Things -- which ranges from Web-enabled home appliances to centrally linked industrial equipment -- is estimated to generate $8.9 trillion in revenue by 2020, up from $4.8 trillion in 2012, researcher IDC reported in October.

In creating the underlying software that can run on customer devices including computers, smartphones and tablets, Acer says its private cloud doesn’t face privacy risks because it keeps personal and corporate data in the hands of users.

Connected Gadgets

Companies including Cisco Systems Inc. (CSCO:US), AT&T Inc., ARM Holdings Plc, General Electric Co. and Intel Corp. have been aiming to make money by providing software, hardware, components or connectivity to a variety of wireless, connected gadgets -- ranging from smoke detectors to industrial equipment and wristwatches for soldiers.

Acer’s lineup will include hardware such as smartphones, computers, tablets and wearable devices that the PC-maker offers, Shih said. The company has released its Liquid Leap wristband which tracks activity, features a touch-screen and will link to new cloud service.

Called “Build Your Own Cloud,” the service is a refresh of an idea Shih unveiled in October 2001. Shih’s MegaMicro vision back then combined an infrastructure of networks and servers with a lighter electronics devices.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Aaron Clark, Subramaniam Sharma


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