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Gateway Adds Computer Server, Signs Service Agreement with IBM

Posted on: Tuesday, 5 August 2003, 06:00 CDT

Aug. 5--In a bid to beef up its products for businesses, Gateway yesterday introduced a new, more powerful computer server and signed a service agreement with IBM Global Services.

The new server and IBM deal are part of Gateway's turnaround strategy.

Instead of relying on the fiercely competitive personal computer market, the Poway company hopes to sell more consumer electronics and powerful back-shop computers known as servers, which have higher profit margins than desktop computers.

The company took its first steps to bolster its server business in March with the launch of two midrange products. Yesterday, it bulked up that line with a more powerful, four-processor server.

In signing IBM for customer support, Gateway aims to dispel concerns from its business and institutional customers about its staying power and commitment to the server business.

"This brings a lot of credibility to us as a company and to the Gateway brand," said Scott Weinbrandt, general manager of Gateway's Systems & Networking Products Group.

The base model of Gateway's new server will sell for $5,999.

Gateway has some catching up to do in the competitive server business. In 2002, the company's deliveries of servers declined 30 percent to 18,000 units, according to Dataquest, an industry research firm.

In contrast, rival Dell shipped 851,227 servers in 2002, making it the world's second-biggest maker of server units behind Hewlett-Packard Co., Dataquest said.

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To see more of The San Diego Union-Tribune, or to subscribe to the newspaper, go to http://www.uniontrib.com

(c) 2003, The San Diego Union-Tribune. Distributed by Knight Ridder/Tribune Business News.

GTW, IBM, HPQ, DELL,

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