Acer to buy U.S. cloud computing firm iGware

Reuters News
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Posted: Jul 21, 2011 3:38 AM
Acer to buy U.S. cloud computing firm iGware

TAIPEI (Reuters) - Acer Inc, the world's No.2 PC maker, will buy U.S. based cloud computing firm iGware Inc for $320 million, looking to move into the potentially lucrative cloud market and add value to its main hardware business.

Acer also said on Thursday it will pay a further $75 million in a performance based payout, it said.

"This (the acquisition) is the right direction for Acer," said Tracy Tsai, analyst at IT research company Gartner.

"Companies can no long rely only on hardware; they have to bring new values to customers through providing applications and software services, and by that to increase their margin."

Acer has been refocusing after a troubled first-half that saw the acrimonious departure of its chief executive after a row over the company's strategy and a series of cuts to its shipment forecasts.

The company has been a dominant force in the PC business, particularly in the low-cost notebook segment, but has failed to counter the runaway success of tablets such as Apple's hot-selling iPad.

The Taiwanese company, which earlier this week inaugurated a new global R&D center in Chongqing, China, to enhance development in smartphones and tablet PCs, has said it will refocus on mobile devices to drive future growth.

"An ICT company without cloud-based technology will have difficulty in enhancing its company value," Acer said in a statement on Thursday.

"As a mid- to long-term investment objective, the valuable core technology and capabilities will help create uniqueness for the Acer brand," it said.

Acer spokesperson Henry Wang told a separate media conference that Acer will start integrating iGware into its cloud software and platform after completion of the deal by late September, and will launch an Acer Cloud product some time in 2012.

He said the acquisition is not accretive to short term profit.

Silicon Valley based iGware offers cloud software and infrastructure tools that support more than 100 million consumer devices worldwide, including Nintendo Inc game consoles.

Cloud computing refers to users of computers, smartphones and other devices accessing programs and files kept on server computers rather than installed on individual PCs.

The concept is gaining attention as PC makers contemplate making PCs and other linked devices portals to information and content stored elsewhere, lowering costs for their customers

(Reporting by Clare Jim and Argin Chang; Editing by Jonathan Standing)