Gateway Eyes Dell’s Server Model for Storage

Gateway next Tuesday will unveil new rack storage systems and a tape drive to remind enterprise customers it still cares for their
businesses despite the company’s rejiggered focus on consumer electronics.

The Poway, Calif. company, yearning to move out from under the shadow of a
sluggish PC market and to gain better footing in the home entertainment
sector, is sticking to its corporate customer guns with its new 850 SCSI
JBOD system and 820 Linear Tape Open (LTO) Autoloader — its first foray
into storage subsystems.

The Gateway 850 and Gateway 820 rack systems are both 2U in size and
compatible with standard racks. The vendor hopes they will be the backbone
for network-attached storage (NAS) or storage area network (SAN) products in
its systems and networking portfolios.

Both products are designed to help small- and medium-sized businesses (SMBs)
and organizations store and retrieve information. While several rivals such
as IBM , HP and Dell
offer similar products for storage networks, plying the market with
competing products from a less established storage provider may seem

But Gateway is seizing on the oft-relayed detail from storage analysts that
corporate data doubles every six months. Company officials are clinging to
the notion that IT managers are “drowning under a flood of bits and bytes”
and therefore need more help — at an attractive price point.

To this end, Gateway claims to be taking a page out of Dell’s own book for
selling servers by undercutting the price of competitors. This is just one
approach to strategy the company is taking as it attempts to transform itself from
a traditional PC maker to a “branded integrator of technology solutions.”

Gateway will launch an array of branded products across a host of new
categories throughout the rest of the year, and will customize those products for
its consumer and business customers. Just yesterday, the company unveiled
the Gateway 960X, a mid-range server designed for small- and midsize
enterprises as well as workgroups within larger organizations.

“We want to be disruptive to Dell in storage — Dell gets 60 points
for margins,” said Scott Weinbrandt, general manager of the Systems and
Networking Products Group at Gateway. “There’s no way they should be getting
away with that. We want to do for storage what Dell did for servers.”

Enterprise Storage Group Senior Analyst Nancy Marrone-Hurley said in order for Gateway to truly compete on the high end they would also need a NAS
offering and infrastructure components to create a SAN.

However, Marrone-Hurley said Gateway will now be able to sell storage as part of a
low cost bundle with its PCs, which should help them be more competitive
with Dell in the entry level storage market.

“The caveat is that every storage vendor has already seen the margins in
storage eroding, so they are moving toward
adding more value to the solution with management software and storage
services (remote replication, snaps, ILM),” she continued. “Being the lowest
cost isn’t always going to win these days, value added services and
management solutions that lower the TCO for the storage environment is what
many consumers will be looking for (at least on the ‘high end’).”

Tim Diefenthaler, director of enterprise storage at Gateway, told customers could expect such features as snap shots and remote replications in the future as the company looks to position itself better against its rivals, who offer high-end systems to accompany SANs.

As for more specific features, the 850 SCSI JBOD, which stands for “just a
bunch of disks,” features a host of storage, reliability and expansion

Gateway envisions that customers who are already deploying the
Gateway 955, 975 and 995 servers will use the Gateway 850 as a vessel for
spillover storage or as a component in a SAN or NAS supporting e-mail,
database, CRM and ERP applications.

The Gateway 850 features as many as 12 hot-swappable Ultra 320 SCSI hard
drives, supporting up to 1.7 Terabytes of data. The machine can transfer
data via single or split SCSI backplanes and single- or dual-bus mode using
LSI Ultra 320 SCSI controllers.

By way of comparison, Diefenthaler said a similarly configured Dell system would cost some $4,000 more than a loaded 850 system.

The Gateway 820 LTO Autoloader is geared for SMBs, institutions and
enterprises who desire a low-cost tape back-up product that works at high
capacity. The Autoloader features an LTO-1 Ultrium tape drive with capacity
for 100GB of uncompressed data and performance of 57.6 GB/Hr uncompressed.

It also features an eight-cartridge carousel holding LTO tape with a maximum
data capacity of 800GB uncompressed. A SCSI interface
allows customers to connect to Gateways 955, 975 or 995 servers.

Starting at $2,999, the Gateway 850 will soon support fail-over clustering
with Microsoft’s Cluster Server. The Gateway 820 Autoloader is priced at

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