A Year Ago: New Gateway targets business users

First published: Thu, 23 Apr 1998 14:00:13 GMT
Written by Kim Thomas, Contributor and  Richard Barry, Contributor

Gateway 2000 today announced major changes in both its branding and the way the company plans to do business in the corporate sector amid cries of `about time' from analysts and competitors.

The company which has risen from tiny PC assembler to a $6.5bn corporation in less than 15 years is to let go its familiar bovine branding after belatedly recognising that cows and corporate culture don't mix. John Shepheard, the company's sales director for Europe, concedes that for Gateway to make it in the corporate arena, the first thing that has to change is the company's image. "We had to change," says Shepheard unveiling the new company brand which also drops the `2000' from its logo.

As well as the consumer market, the new `Gateway' will focus on the corporate market which has always eluded the company that made a name for itself selling PCs over the phone to customers who liked its quirky style. But the organisation is, by its own admission, growing up and recognises it cannot enter the corporate market without the aid of partners and an established channel. To that end, Gateway bought server company ALR last June because it had a "built in channel" according to Mike Maloney the company's marketing director for Europe.

Gateway plans to use its partners, or Value Added Resellers (VARs), to give its corporate customers "the best possible post sale support and maintenance" according to Maloney. "If for example a company wants a LAN installed, we can't do that but our new partners can," he says.

Putting the company's reputation in the hands of third parties is risky but Maloney reckons it's a challenge Gateway will rise to. "Sure there's a risk and I think that's where we have to be especially careful who we partner with." Something he doesn't believe Compaq has been careful enough with. "Compaq hasn't been very selective with who they've put in their channel," he says.

Compaq was not available for comment.

Analysts at the Gartner Group weren't surprised at Gateway's metamorphosis into "serious player".Paolo Puppoli, analyst for PC products at Gartner says, "it was inevitable. It wanted to grow. Things had to change, not just the logo but the whole ethos. The 2000 had to go because of the millennium and the cows had to go because its one less element of a consumer look."

Puppoli believes Gateway has no choice but to employ partners in the corporate arena. "They have absolutely no specialist knowledge in that arena," he says. "It will be interesting to see if companies want another player and if Gateway can find partners it can rely on."

IBM remains sceptical about the advent of yet another competitor but wished Gateway well. "Gateway is right to go into the business sector," says Vince Smith, communications manager at IBM, "but they'll need more than clever rebranding. Businesses aren't interested in cheap kit, and Gateway has almost no experience in the corporate environment. "

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