Gateway, Verio Tackle Business Marketplace

Gateway Inc. and Verio Inc. Thursday forged an alliance to
tap into small and medium-size businesses race to embrace e-commerce on the

The two companies intend to offer a wide range of e-business services to
Gateway (GTW)
business customers. By teaming up with one of the leading Web hosting
companies, Gateway’s business division can offer customers one-stop access
to everything they need to capitalize on the potential of the Web.

Van Andrews, Gateway Business senior vice president, said the Verio (VRIO)
alliance represents a significant step in its strategy to deliver
beyond-the-box services and solutions to business clients.

“There’s clearly a need to enable small and medium-size businesses to
leverage the Internet with the world-class services that Verio provides,
combined with the guidance to fully optimize this powerful medium,” Andrews

According to Forrester Research,
, the market for U.S. business Internet services is projected to
grow to $57 billion in 2003, from $7.7 billion in 1999. Web hosting
services are projected to increase from $2 billion in 1999, to $15 billion
in 2003.

Forrester (FORR)
further projects the application hosting market, including e-commerce
services, will grow from just under 1 billion in 1999 to $11 billion by
2003, with small and medium-size businesses accounting for $10.5 billion.
The shift means that business revenues would account for 93 percent of the
e-commerce Web hosting market in the U.S.

Justin L. Jaschke, Verio chief executive officer, said Gateway is well
positioned to serve small- to medium-sized business (SMB) customers as a
guide to reap all the economic benefits of the Internet by establishing
their Web presence.

“Through its uniquely intimate customer relationships and pervasive
distribution channels, Gateway is rapidly becoming the trusted technology
guide for the SMB market,” Jaschke said. “Together, Verio and Gateway have
a complementary set of products and broad distribution channels that can
deliver world-class solutions for the SMB market.”

Initial service offerings as a result of the alliance were also launched
Thursday. Programs include a wide range of Web hosting and personalized
domain name registration services. Beginning in June, the two companies
intend to bundle additional Internet services including e-commerce
solutions, Digital Subscriber Line, dedicated, and dial-up Internet access.

The products and services are to be offered direct from Gateway through its
on-line channels and direct sales outlets including its 260 Gateway Country
stores and 1,000 OfficeMax store-in-store locations nationwide.

In addition to providing its Internet access and hosting services, Verio
plans to integrate Gateway servers into its data centers from which it
provides Web hosting services to more than 395,000 sites worldwide. Verio
will also begin using Gateway PCs in its business operations.

Financial terms of the alliance were not disclosed.

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