Acer nabs iGware cloud computing business for $320 million

Summary:Although it is known for low-cost computers, Acer has made it known that it has cloud computing dreams of its own with the acquisition of iGware.

Although it is known for low-cost computers, Acer has made it known that it has cloud computing dreams of its own with the acquisition of iGware.

Reuters reports that Acer paying $320 million to buy out the rather obscure iGware with an additional $75 million for a performance-based payout.

The $320 million figure alone already marks "the fifth-largest ever Taiwanese buyout of a U.S. company," but the extra cash making for a grand total of $395 million makes this deal the largest buyout of a U.S.-based business by a Taiwanese company in 2011.

Given that Acer hasn't been doing too well lately, especially when it comes to tablets, it makes sense to see Acer jump in on the whole cloud computing trend. After all, it's an emerging IT sector that's only going to continue to grow.

However, iGware doesn't have many big name clients that will filter over to Acer, perhaps with the exception of Nintendo. Thus, Reuters reports that there are some skeptics:

"Acer is wasting its money. It's spending almost $400 million on a small software company," said Vincent Chen of Yuanta Securities.

"Why does it need a client like Nintendo, which doesn't have a cloud or data center? Acer has been wanting to do online gaming and server business, but it doesn't have a clear vision in the cloud business."

It will take Acer a little while to catch up anyway. The deal isn't expected to close until at least late September. After that, Acer probably won't be able to launch its cloud solutions before 2012.

Related:

Topics: Hardware

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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