Gateway beats IBM for US government contract

Under a two-year deal that Gateway will announce on Wednesday, the San Diego company will offer discounts on products and services to nearly three million small businesses affiliated with the Chamber of Commerce. The deal is especially significant for the PC maker because small to medium-sized businesses have become one of the few areas of growth for Gateway.

IDC analyst Roger Kay said that small businesses present more opportunities for tech companies to win contracts than corporations do. Large businesses tend to have an established short list of companies that they buy tech products from, and breaking onto those lists is difficult.

"Small businesses are viewed as the great frontier because selling opportunities are still there," Kay said. Still, he added, opportunities are not sales. And given the current economic slowdown, there may be fewer new customers than companies believe.

Small businesses affiliated with the Chamber of Commerce will receive a 10 percent discount on PCs and 20 percent off training. The businesses can purchase Gateway products through Gateway Country stores, at a special Web site or over the phone.

IBM had provided the US Chamber of Commerce with tech products and services for the past two years.

Gateway representatives and Chamber of Commerce spokeswoman Liz Batenhorst would not disclose the financial terms of the contract.

But, Batenhorst said, Gateway won the contract for a "combination of reasons, which included aggressive discounts, access to products and services through Gateway Country stores, and a focus on the needs of small-business owners."

Members of the Chamber of Commerce pay dues based on the number of employees in a company and on revenue. More than 96 percent of the small businesses in the Chamber of Commerce have 100 or fewer employees. Gateway's sales to small to medium-sized business grew 27 percent in the second quarter compared with the same period last year.

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