Hardware Today: Gateway Server Snapshot Page 2

By Drew Robb (Send Email)
Posted Aug 15, 2005


Towering Above the Competition

In the tower category, the company has also been busy. The Gateway 9510 is essentially an upgraded combination of two older models: the Gateway 960 and Gateway 980 towers. It supports six SATA or 10 SCSI drives. which equates to either 2.4 TB SATA or 3 TB SCSI. Rather than having a separate raid controller, it has RAID on the motherboard as a cost reduction feature. It also has hot swappable redundant fans and power supplies.

"The Gateway 9510 has been our best seller due to the flexibility of the box," says Diefenthaler. "It is selling very well in the public sector, education, SMB, and midenterprise."

Last week, the newest member of the family shipped: the 4-way Gateway 9715. It supports up to 32 GB of ECC DDR2 memory and 10 SCSI drives (3 TB of internal storage), and has redundant fans and power. While this 4-way unit is important strategically for Gateway, the company doesn't necessarily expect it to be a best seller. Rather, Gateway believes its presence will prevent sales personnel from being frozen out of a whole lot of deals. Many bids, it turns out, specify a dual processor, a minimum amount of memory, and four processors. A customer may not end up buying a 4-way system, but it is often in the bid.

"Our 4-way business may be a fraction of our other server sales, but we use it as a vehicle to generate more accounts," says Diefenthaler. "It enables us to compete for many more customers in education, government and commercial."

Further, this 4-way server is marketed as a blade alternative (Gateway doesn't offer blade servers). It can be used with virtualization software from Microsoft or VMware to create multiple operating system instances. Gateway prefers to promote the 9715 for this purpose rather than adding another product to the roadmap.

Intel Inside

Just as Gateway's server portfolio is lean and focused, the vendor prefers to keep chip choices minimal. Its racks and the Gateway 9510 tower use the latest Intel Xeon DP 3.6 MHz processor with 2 MB of cache. The 4-way 9715 tower, on the other hand, has a Xeon MP chip.

While this 4-way unit is important strategically for Gateway, the company doesn't necessarily expect it to be a best seller. Rather, Gateway believes its presence will prevent sales personnel from being frozen out of a whole lot of deals.

"Our product line is now Intel across the boards," says Diefenthaler. "For the markets we are serving, it represents the best choice."

With such a heavy government and educational focus, Intel is indeed a wise partner. These industries have been specifying Intel chips for years, and AMD has been fighting an uphill battle to make headway in the government sector due to an ingrained preference for Intel products.

"Our government, education and business target segments are asking mostly for Intel," says Diefenthaler.

With its wagon hitched to Intel, it's no surprise that Gateway doesn't yet offer dual core. The company reports, though, that it supports Intel's dual core strategies. As the chipmaker releases dual core, look for Gateway to augment its server offerings with some dual-core models. We anticipate a dual-core server announcement from Gateway toward the end of August.

Another of Gateway's strategic relationships is with Microsoft. The company doesn't offer exclusively Microsoft operating systems, but it certainly focuses on them. Servers come preloaded with Microsoft Windows Server 2003. This hardware is certified also for NetWare and Linux, but the machines don't come with those operating systems preloaded. This is an issue for industries where other operating systems dominate. NetWare, for example, is still big in certain educational markets.

"Well over 75 percent of our customers are using Windows," notes Diefenthaler

Service Plan

Gateway's server strategy, then, is to take a simple, focused approach to the market. Thus, it is leaving the large-scale enterprise market to the Big Four and concentrating on the lower end.

"We have six servers that meet the lion's share of customer needs. This considerably reduces our costs by only supporting those models, and it also enables us to support them well." — Tim Diefenthaler, senior director server of product marketing, Gateway

"We have six servers that meet the lion's share of customer needs," says Diefenthaler. "This considerably reduces our costs by only supporting those models, and it also enables us to support them well.

For example, Gateway offers customers three-, four-, or five-year service plans that include two- and four-hour on-site response via yet another partnership — this one with IBM Global Services. The plan's competitive pricing has proved popular in education and other markets that don't have a large IT staff. As a result, Gateway boasts that more than 40 percent of server customers also buy this type of support plan, high by any standards.

When it comes to the market as a whole, Gateway may remain far behind Dell, IBM, and HP. But it has been making steady progress upward in the past two years.

It is now just about level with Sun for fourth place in the x86 space. The company hopes its upcoming releases will secure that spot.

"SATA technology is driving considerably volume of sales currently," says Diefenthaler. "Sales will be further strengthened by our upcoming dual-core release, as well as the additional of Serial Attached SCSI (SAS) products next year."

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