Gateway Goes for Business Gold

The PC maker is beefing up its product line with the aim of wooing more business customers.

Gateway is getting down to business.

The Irvine, Calif., PC maker, which absorbed eMachines Inc. in 2004, is has been reshaping its notebook, server and desktop lines in an effort to boost sales to small and medium businesses as well as government and education customers.

"Weve said, in some respects, we are a new company…and weve been knocking out a new, aggressive product line," said Gary Elsasser, vice president of product development at Gateway Inc.

"Thats whats showing in things like extremely long battery life—with the ability to support batteries that stick out the back of our notebooks—on mobile… to being the first to offer a 1-U, three drive, RAID-capable, redundant rack-mount [storage] server."

Gateway is taking aim at a crowded space as SMB (small and midsize business) sales are highly sought after by PC makers.

The smaller companies tend to purchase less equipment than large corporations, which have more employees.

But given the how numerous smaller businesses are in the United States, the sheer size of the market makes it a major opportunity.

Thus heavyweights Dell Inc. and Hewlett-Packard Co. have been focusing on the space. Lenovo Group LTD., which recently acquired IBMs PC group, is also expected to mount an aggressive SMB effort.

Gateway, which ranked as the third-largest computer maker in the United States during the first quarter, will attempt to thwart them all by being more agile.

/zimages/6/28571.gifClick here to read more about Gateways plans to recruit more VARs to sell to SMBs.

It has quickly moved to new designs, jumping on BTX (balanced technology extended) chassis for its desktops and adding new features such as RAID-5 (redundant array of independent disks) to its storage server line.

It plans to offer BTX chassis, which are quieter and better at removing heat from fast processors and graphics cards, top-to-bottom on its business line.

Gateway is also already making room for future generations of wireless networking technology in its notebooks, Elsasser said.

This week, Gateway rolled out its M250 notebook. The 4.8-pound machine offers a 14-inch WXGA resolution wide-angle display and a full-size keyboard. It starts at about $850 when fitted with Intels 1.4GHz Celeron M 360 chip, 256MB of RAM, a 40GB hard drive and a combination CD-RW-DVD-ROM drive.

Its price rises to just under $1,270 when fitted with a 1.6GHz Pentium M 730.

It also launched the Gateway 9715, a rack-mount server capable of harboring up to four of Intels latest 64-bit-capable Intel Xeon MP processors, for a starting price of $3,999.

Two new storage servers, the 9315 and the 9415, accompany them.

The 1U or 1.75-inch-high rack mount storage servers start at about $2,000 each. The 9415, for its part, supports RAID 5.

Gateway plans to follow them, soon, with a new tablet PC as well as a new line of E-Series desktops, which it says will more heavily emphasize security. The E-Series desktops will incorporate a security chip for encrypting files, Elsasser hinted.

At the same time, Gateway has streamlined much of its product lines and has also been using its larger mass, thanks to its acquisition of eMachines, to press suppliers for better prices. This allows it to be more aggressive on prices, he said.

Still, Gateway doesnt intend to compete for large business accounts with the likes of Dell and HP—at least not yet.

/zimages/6/28571.gifTo read more about Dells line of notebooks, mobile workstations and services for business users, click here.

Aside from government and education, "Were definitely going to focus a lot more on small and medium businesses," Elsasser said. "We wont be focusing on large customers immediately."

Ultimately, the professional business represents the third leg of the stool for Gateway. The company sells numerous consumer-oriented PCs and other products, such as televisions, through retail and direct-to-consumer. Its also expanding internationally.

"Professional is our number one category. Its our number on opportunity for growth in the future," Elsasser said.

"Retail is never easy. But we understand that business extremely well. Were taking the rest of our attention and focusing it on professional, international expansion and direct."

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