Acer's stunning victory in winning a $67 million Victorian Government notebook deal (page 10) could very well be a sign of things to come. If ever there was a time when the Asian PC lion was in a position to challenge the likes of Compaq, IBM and Hewlett-Packard in the PC space it's now.
What Acer has going for it, as does rapidly growing direct vendor Dell, is focus. Both these vendors, at least for the moment, are concentrating on the PC space. That's their meal ticket.
On the other hand, you have Compaq who is desperately trying to reinvent itself as a whole-of-infrastructure provider. Right now, it seems Compaq is most interested in big-ticket deals at the top end of town. Meanwhile, IBM and Hewlett-Packard are in danger of tripping over themselves, as they constantly check over their shoulder to make sure Compaq isn't ranging up behind them.
I think all three are vulnerable. In particular, you have to question whether Compaq has bitten off more than it can chew. Make no mistake, the next year is going to be painful. All big acquisitions are, and the contrasting Digital/Compaq cultures won't help this one along. I also question Compaq's ability to diversify its business. While it has been incredibly successful in the desktop and server markets, it has never even looked like challenging Toshiba in the notebook space. Its foray into the networking arena has hardly been a raging success, either. In both markets, the leading competitors are very focused on what they do and Compaq isn't. While the big three strive to be one-stop shops, there are real opportunities for focused competitors like Acer and Dell to steal market share.
In fact, I question the very essence of what Compaq is trying to do. IT managers I spoke to while working on end-user publications were well aware of the dangers of locking themselves into a single vendor. Many of them wanted a "single supplier" so that no matter what went wrong, they knew who to call.
But that doesn't mean they want a single vendor. It makes much more sense for that one supplier to be a reseller or integrator. The customer isn't committed to a single vendor's pricing or technology, but they have someone they can always point the finger at. What's more, the reseller or integrator is focused on providing integration services.
One thing needs to complement focus, though, and that's marketing. While service and initiative are likely to slip as vendors get bigger, the money they will have to spend on marketing won't. That's why it's critical that smaller, niche players are smart marketers. Dell has been a smart marketer and is reaping the rewards. If Acer is going to take on Compaq, IBM and Hewlett-Packard it too needs to be perceived among customers and resellers as a viable, top-tier alternative. Similarly, the challenge for resellers and integrators is to market themselves as superior alternatives to the vendor one-stop shops.
Independent service providers are better alternatives. They just need to let the market know it.
What do you think?
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