Crying Out for Earthlings

Having conquered gamers, PC upstart Alienware sets its sights on the business sector.

“In South Florida, even the average Joe takes pride in his ride, so it's not surprising that this aesthetic translates into other things, including personal computers. 'A high-performance car looks the part," declares Alienware CEO and co-founder Nelson Gonzalez, explaining the racecar colors that envelop the company's computers. 'Same with PCs.'

And so Miami-based Alienware targets hard-core gamers -- but increasingly consumer and enterprise markets -- suggestively coating its machines in hues of conspiracy blue and saucer silver, and decking out its desktop boxes with wrap-around lights.

It also dots its new Area-51 line of notebooks with alien heads that light up menacingly when the machines are on. But attracted by the power pulsing under the Alienware hood, non-gamers have started buying the machines. The new crowd includes graphic designers, enterprise customers, and even the military. Among other attractions, Alienware's top-of-the-line ALX hot-rods boast the world's most powerful dual-core 64-bit microprocessors from AMD and Intel, and the world's fastest 3-D graphics cards from Nvidia.

Alienware is an alien concept in the consumer computer industry. Its revenues are growing, for one thing -- by 50 percent in 2005. In contrast, IDC reports worldwide PC sales grew 15.8 percent last year and will slow to 10.5 percent this year (Gartner says U.S. sales increased by only 7.5 percent in 2005).

The company was started by Mr. Gonzalez, 40, and President Alex Aguila, 38, childhood friends who grew up in Hialeah, next door to Miami. Both keen gamers, they started Alienware with $10,000 and say it made a profit its very first year -- on sales of $1.5 million. Over the ensuing decade, the pair has rebuffed venture overtures, opting to build the company at their own pace -- making products of their own choosing. 'We knew what a gamer wanted because we were that guy,' Mr. Gonzalez asserts.

Alienware has grown to 600 employees -- in its U.S. operation and at sites in Ireland, Australia, and Costa Rica -- hiring industry mainstreamers along the way.

Product Marketing Manager Linda Roberds came on board last summer after holding a similar position at Hewlett-Packard. Mark Vena, Alienware's vice president for marketing, managed worldwide digital home and consumer strategy for Dell before joining the company in early January -- with the goal of winning more brand recognition in the broader PC market.

The company is looking a little more mainstream itself, having formed partnerships with Microsoft and Intel and licensing agreements with various companies, including GPX and Kyocera. And like the PC industry's big players, it wants to get sales going beyond its strongholds in the United States, Canada, and Western Europe.

Happily, sales beyond Alienware's core of geeks have been gaining momentum. Its desktops have caught the eye of earthlings in the wider consumer market, and its graphics capabilities have sparked the interest of government agencies.

To exploit faster growth in the portable PC segment -- 31 percent in 2005 compared to 6.1 percent for desktop -- the company just launched a new notebook line with souped-up graphics and memory capabilities rivaling desktops. It also unveiled a new server series aimed specifically at the business market.

Ms. Roberds says it was word-of-mouth marketing that brought Alienware to the attention of professionals, architects and weapon experts, among others, looking for strong graphics capability to help them design buildings and weapons systems.

Mr. Gonzalez says the U.S. military now uses Alienware PCs to create battle simulation programs. Boeing and Lockheed-Martin are also clients, he says.

Sam Bhavnani, an analyst in the San Diego office of research firm Current Analysis, says the company could do well in the small to mid-sized business market. 'They are well-positioned with a premium brand image.'

Alienware also wants to make inroads in home digital media� Mr. Gonzalez thinks Alienware has the formula. 'Our vision is a controller-slash-media center,' he says. 'We see a PC that controls and gives content, versus a stand-alone unit that substitutes a TV -- complementary boxes that don't look like a PC that can go in a closet or in the living room.'

As he sees it, the system would stream content to all parts of a home, record TV shows, and control music and video players. 'This has been in development for quite a number of years,' says Mr. Gonzalez. 'We're finalizing the software now.'

Indeed, Mr. Eremsen says home media is a logical next step for the company. 'Alienwares are very powerful PCs, and it seems like a natural progression for them,' he says.

Dan Fernandez, the digital home marketing manager for Intel, agrees. 'They're really good at pushing the envelope tech-wise,' he says.

�Mr. Kay thinks the company is well-positioned for an IPO. 'They're a nice, tidy little company with a good brand name,' he says. Alienware also has a reputation for impeccable customer service.”