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IN THE HOT SEAT: Turning up aces with Acer

IN THE HOT SEAT: Turning up aces with Acer

With eight years at Acer under his belt - five of them acting as national channels manager - Greg Mikaelian is looking to expand the company's distribution, retail and SMB/SOHO markets.

Chat with him for a few minutes, and he will tell you he's been living and breathing the channel his entire tech career - after deciding to get off the accountant beat.

Building up the business of local assembler, TechWay, as well as performing channel account management and business development jobs for reseller HiSoft - he knows a thing or two about the channel.

Now he will tell you he is looking to take the number three hardware player to the top of the podium by 2007. Lofty ambition? He doesn't think so.

Mikaelian said he wanted to keep the company strong in its traditional education, government and commercial markets, as well as crack the SMB and digital home front.

How did you get involved with Acer?

Greg Mikaelian (GM): Acer was my first true multinational vendor where TechWay was a local whitebox assembler. When Acer was looking for a national channels manager, they looked at management to see who was the most qualified (to see who had any idea about working with channels and channels management). Because five or six years ago the channel was in its infancy.

Since then, I've helped roll out a formal channel structure, implement programs and recruit key partners to facilitate Acer's growth in Australia.

What have you accomplished as channels manager thus far?

GM: In five years, it has gone from a fledgling channel to one of the strongest channels in the country in terms of quality of partners, commitment of partners, the vast coverage of our partners from broad-based distribution to our direct partners (such as system integrators) and, over the last two years, we have built up our retail channel, which is now very strong.

At the same time, Acer's overall business has grown (compound annual growth rate) 35 per cent over the past five years. So while some people think we have snuck up and suddenly become successful, we have maintained the growth rate over the last five years. The channel growth is higher at about 40-45 per cent.

We have 40-50 direct partners, a dozen retailers and five distribution partners: Ingram Micro, IT Wholesale, Bluechip Infotech, Hitech Distribution, CompuWholesale and Express Online.

Through our distributors, we have 2000 partners who are linked through our AcerLink portal.

Will the Ingram acquisition of Tech Pac have any affect on the Acer distribution model?

GM: It's actually a good thing for us. Last year, we were looking at selecting a broad-based national distributor and looking at Ingram and Tech Pacific.

The better choice for us was Ingram because they are a multinational worldwide player (very strong in Europe, US, Asia Pacific), so we felt culturally it was a better fit for Acer. And, of course, it has proven to be the right decision. We'll just have to wait to see what happens now.

Does Acer plan to make changes on the distribution front?

GM: We have had an e-commerce portal, AcerLink, for our direct partners for two-and-a-half years. We launched the AcerLink to the distributors about a year ago. It gives dealers nation-wide access to quotes, online configuring, where they can order and communicate online with the distributor through Acer. It has cut out the costs of doing business and strengthens the supply chain for our distributors. And for key dealers of the distributors, in 2005 we're looking at offering them a formal program. This will offer accreditation, access to training and special bid pricing as well as incentive programs such as marketing and rebates. There is also a premium club rewards program.

Distribution has been a very strong growth area for Acer, expanding by 65 per cent this year. Good quality, focused distributors, as well as the AcerLink portal, are helping drive the market.

What other strategies are on tap for 2005?

GM: The SMB/SOHO space is about 30 per cent of the market, according to IDC, and a big focus area for Acer. Other vendors, including whitebox manufacturers and corner shops, have a 50 per cent stranglehold, but we are focusing heavily on the area (through our distributors) and we will see some major growth next year. Multinational prices have come down, there's more ability to configure online, and there's more flexibility - so a dealer has the option to buy a branded alternative to a whitebox.

Another area of focus where we are on a recruitment drive is the retail channel. While we have come from a small base two-and-a-half years ago, we have seen a 200 per cent growth in retail two years running. It partly came on the back of Gateway pulling out of Australia, and there was a bit of a void. Acer came in and offered flexibility in terms of customised PCs, and was quick to market. The plan is to add more retail kiosks nation-wide next year. We had 30 by the end of September and plan to roll out 200 by the end of next year.


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