Gateway Sets Sights on Small Business

Computer maker Gateway Inc. wants to expand its commercial business by focusing on smaller businesses.

Gateway, of Irvine, Calif., kicked off the initiative Thursday with the release of a low-end server and a new line of desktop and notebook PCs armed with features that officials say are needed by small businesses with little or no IT staff.

In addition, Gateway also is wrapping services around the offerings.

Over the past six months, Gateway officials have been talking to small businesses—those with up to 99 employees—about their technology needs. Key among them are good prices, a set of business features—such as 64-bit computing—and services, said Dan Stevenson, vice president of Gateway’s direct business.

“The small business types don’t have an IT department,” Stevenson said. “It’s either the business owner or some other employee that’s wearing multiple hats.”

Gateway Thursday is rolling out the first of its small business products, including the new S-Series line of desktops and notebooks.

desktops feature the cooler-running and quieter BTX design and a tool-less chassis, making it easier for businesses to maintain them. The BTX design puts the hottest components—including the processor—in the middle of airflow created by two fans.

The systems—the S-5000S and S-5200D—also offer a range of processors, from the low-end Celeron to the dual-core Pentium D, from Intel Corp. and faster DDR2 memory. Pricing starts at $449 and $599, respectively.

The S-Series notebooks—the S-7200N and S-7700N—offer wide-screen displays between 14 and 17 inches, a magnesium alloy casing for durability and shared components. They also run on Intel’s mobile Celeron M or Pentium M chips, and start in price at $849 and $1,349, respectively.

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The new E-9920T server also features the BTX design, a choice of chips and redundant power capabilities. It runs Intel’s latest E7230 chip set designed specifically for entry-level servers and multiple hard drive option, ranging up to four SATA or SCSI hard drives and up to 1.6TB of storage. There also are five expansion slots and it comes with Gateway’s System Management Monitoring Service.

In addition, Gateway is offering an array of services, said Gabriel Rizzi, senior director of Gateway’s Small Business unit.

example, Gateway will send representatives on site to evaluate a business’ IT needs, make recommendations and estimate the cost.

Cmpetitors don’t offer such on-site help, which is why many small businesses opt for white box makers, Rizzi said.

A service for the S-Series systems is BigFix, which automatically sends messages regarding updates, patches and general maintenance, Rizzi said.

Over the next few weeks, Gateway also will begin bulking up its Web site with modules offering everything from educational resources to case studies, giving businesses a place to find technology information and making the Web site something more than just a place to buy products.

The small business segment offers Gateway growth potential, but there are challenges, according to Roger Kay, president of Endpoint Technologies Associates Inc.

Kay said Gateway needs to expand its professional business if it’s going to grow, and that the small business segment is an underserved market. The challenge is finding those customers, and then making the effort in finding and servicing them pay off.

“The bad news is that it’s hard to get to them,” said Kay, in Wayland, Mass. “The good news is that they’re not overexploited because they’re hard to get to.”

The key for Gateway will be services.

“None of those [product features] are specific to small businesses,” he said. “Everyone can benefit from BTX. The services are something they can target to small businesses, particularly knowing that they don’t have a CIO on staff, or a technology-savvy person on staff. … This is imperative for Gateway. They have to see growth in their [professional] environment, and this might be promising.”

Their consumer business, particularly with the focus on retail outlets since Gateway bought eMachines Inc. last year, is moving a lot of products but for little return.

“They’ve got the consumer [business] pretty nailed, but the thing with consumer is that it’s not very profitable,” Kay said. “The retailers are kind of eating their lunch. … In the end, they’re selling machines, but not making a lot of money.”

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