Gateway launches two rack servers amid corporate push

Gateway is determined to improve its standing among corporate customers by bolstering its server lines and adding storage...

Gateway is determined to improve its standing among corporate customers by bolstering its server lines and adding storage products later this year, as sales of its PCs continue to slump. 

Most of Gateway's resources for new business investment will flow to servers and other enterprise IT equipment over the year, said Scott Weinbrandt, general manager Gateway's systems and networking products group. 

Gateway will also add storage products by the third quarter of this year to its line of enterprise IT hardware.

The launch of the Gateway 955 series and Gateway 975 series rack-mounted servers are the seventh and eighth server lines launched by the company. Both servers are dual-processor capable, but ship with only one processor. They come with dual Gigabit Ethernet ports, and two PCI-X (peripheral component interconnect - extended) slots for additional I/O capacity.

A base configuration of the 955 series with a single 1.8GHz Xeon processor, 256Mbytes of ECC (error correcting code) DDR (double data rate) memory, an 18Gbyte Ultra160 SCSI (small computer systems interface) hot-swappable hard drive, and Gateway's Server Manager software for $1,699. The 975 series starts at $2,199 with a single 2.4GHz Xeon processor, 512Mbytes of ECC DDR memory, a 36G-byte Ultra320 SCSI hot-swappable hard drive, and the Server Manager software.

Customers can configure their own servers with additional memory and faster processors up to Intel's latest 3.06GHz Xeon. The servers will only be available in the US.

The company will have a tough task ahead as it focuses on the Intel server market, dominated by Hewlett-Packard and Dell. Gateway hoped to increase its market share by selling to its traditional strength among government and educational customers.

The other prospects for Gateway lie among small and medium-sized businesses, where it aimed to take revenue away from white-box suppliers through strong customer service and support. White-box suppliers sell servers and PCs without a name brand such as HP's Compaq Evo, Dell's Dimension, or Gateway's self-titled products.

Alongside services and support, those companies can sell their products at lower prices than the bigger suppliers in most cases, but Gateway believed it could offer better customer service,.

Gateway is looking at adding four-way servers to its product line, as well as the possibility of bringing Intel's 64-bit Itanium chip to its server products.

Layoffs and losses have been the primary story at Gateway so far in 2003, but the company is hoping the higher margins from servers help shore up the company's bottom line. In January, Gateway reported a fourth-quarter net loss of $72m with revenue in that strong consumer quarter falling more than $1bn compared with the same period the previous year.

Last month, Gateway cut 1,900 jobs and announced plans to close 80 stores, in an attempt to reduce expenses by $200m to $250m. The cost cutting is expected to bring the company's cash position to about $1bn, which will fund the investments in the server business expansion.

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