AOpen Broadens Landscape For Value-Added Systems

James Huang, who took over as president of San Jose, Calif.-based AOpen America in September, said he plans to move the company away from its overwhelming focus on components to offer more value-added systems--such as barebones and white-books--and, in the process, help its solution providers increase their competitiveness against Dell.

Barebones systems and whitebooks currently account for only approximately 5 percent of AOpen's business in the United States, compared with 35 percent in Europe and Asia, Huang said.

"Maybe that's because Dell is so strong [in the United States] or because the clone market is weak," he said. "I was transferred here because, after staying in the [AOpen] headquarters [in Taiwan] for two years and in Europe for 10 years, I understand the new direction [toward solutions]."

Huang is no stranger at AOpen. He opened the Europe branch in 1996--after spending four years with Acer Europe--and ran the company until 2002, when he moved to AOpen's headquarters.

In addition to placing more emphasis on solutions, Huang said he plans to decrease AOpen America's reliance on regional distributors. "Many regional distributors are shrinking," he said. "So I'd like to focus more on national distribution or on large OEMs or systems integrators."

This month, AOpen is also focusing its efforts on streamlining its sales organization, pairing solution providers with just one sales representative regardless of product, Huang said.

The company is also starting a program to invest more in marketing to help its channel partners capitalize on the AOpen brand. Rather than spend several millions of dollars at once, Huang said he plans to invest a small amount every month to gradually build the brand.

Huang hopes such programs will help AOpen America get up to 30 percent of its revenue from solutions next year or the year after, while still growing its component business.

"It's a hard jump for me," Huang said. "But this is the company's direction."

Phil McGourty, CEO of Genesis Computer Systems, a Gladwin, Mich.-based system builder, said he likes AOpen's new value-added solutions approach as long as the company continues to support the white-box community.

Genesis uses AOpen components and does some business with its barebones systems but would like to do more, McGourty said.

"If AOpen America would come out with decent barebones systems with more choices, it would be good for us," McGourty said. "We need more configurations. Right now when we're in a bind or need a special system we buy an Asus barebones system."

While solution providers will continue to remain AOpen America's main target markets, especially in the education and government sectors, Huang also wants to gradually expand into retail.

"We have not focused here in the past," Huang said, "so we need to upgrade our brand-name position."