Ina Fried

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Interview: Ousted Acer CEO Gianfranco Lanci Talks About His Departure

Former Acer CEO Gianfranco Lanci said that he was on the verge of making big changes to the way the company was organized when the company’s board decided to move in a different direction.

In an interview with Mobilized, Lanci said he was pushing the company to become more mobile-focused and more global. Acer, he said, needed to look beyond Taiwan as the world shifted to one in which Intel and Microsoft had less power and computer makers needed to do more work for themselves.

“At that time, I already saw if we want to become a major player in this new world, we needed to do certain investments, mainly on software and on smartphones and tablets, on touch,” Lanci said.

Lanci said the company needed to go from 300 or 400 engineers to 1,000 engineers, with a greater focus on software and hardware integration. The talent the company needed, he said, wasn’t present in Taiwan.

“The real major issue was doing that in Taiwan, this was not possible,” Lanci said. “We needed to go outside Taiwan, be it China or India or even the U.S. or Europe, wherever you can find software resources, software know-how.”

Lanci, who was replaced as CEO in March, said that the interests that control Acer were worried that his plan would lead to a de-Taiwanization of the company.

“I said, ‘Look, it is not de-Taiwanization,'” he said. “It is just globalization. If we want to be in the top three (PC makers) in the next three to five years, we need to be a global company and we need to leverage resources wherever they are.”

Lanci had begun to talk about this strategy in a November interview with Mobilized.

For its part, Acer has placed the blame squarely on Lanci’s shoulders, suggesting he was looking for too much power and control while at the same time not delivering results.

Lanci concedes that the company was late in delivering on its smartphone and tablet vision, but said this was because it needed capabilities it did not have. As for the results, Lanci noted that Acer grew from a $10 billion company to a $20 billion one during his eight-year tenure, delivering consistent profits along the way.

“Last year we made more than $600 million in operating income,” he said. “Let’s see what they are able to do.”

Had the company followed through with his vision, Lanci said he is convinced it would have grown to be a $30 billion company and one that got a third of its sales from smartphones and tablets by 2015.

“People after a few years will decide who was wrong,” he said.

Although today’s tablets are a consumer phenomenon, Lanci said the push by Microsoft to deliver Windows on ARM-based chips will help the devices move solidly into the business domain.

“You can easily think about a tablet thin and light, like the current iPad 2,” he said, but offering everything that the PC offers as well. However, he said that Acer needed to do more to prepare for that world. In addition to boosting its own software capabilities, he said the company needed a different relationship with chipmakers. The PC world, he said, was one of buying and selling components, with pricing and availability based solely on volume. The mobile world, he said, is based on close partnerships and strategic alliances.

As for who is doing things right, Apple is clearly winning, but there are others also making moves to adjust for the shifting world.

“I see Samsung is probably doing the right thing,” he said. “HP, maybe. It depends what they are going to do with software and with WebOS.”

However, he said much of the PC industry is in a similar position where Acer was. Lanci isn’t sure what is next for him personally, but he hopes it will be in the PC industry–a place that has been home since 1982.

“I took two weeks’ vacation,” Lanci said. “Now, I am in the market and looking around. For sure I want to stay in this industry.”

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle