Gateway Chews Storage Cud

Gateway Inc., the home PC maker whose recent TV ads have featured a talking Holstein cow, next week will initiate a bovinely inspired attack on the enterprise storage market by introducing a 12-drive SCSI array for its servers.

Come again? Yes, that's right: Gateway is jumping hooves-first into the direct-attached storage (DAS) space -- even as the rest of the industry has been moving away from DAS in favor of networked storage systems that offer better utilization and greater flexibility.

Tim Diefenthaler, Gateway's director of enteprise servers and storage, concedes that the company is taking very tentative baby steps with its first foray into storage. But first things first, he says: "We clearly want to broaden our storage portfolio over time, but we need to take the right steps from an infrastructure perspective. SAN and NAS, as well as backup schemes, are on our roadmap throughout the rest of the year."

In 2001, Gateway actually did launch a family of NAS systems, developed by Maxtor Corp. (NYSE: MXO), but after poor sales Gateway phased out the line the same year. Meanwhile, Maxtor shut down its own NAS unit last year (see Maxtor Pulls Plug on NAS).

For now, Gateway's goals are specific [ed. note: no need to jump over the moon first time out the barn door]. With the 850 SCSI JBOD (just a bunch of disks) subsystem, it plans to undercut the prices of its chief competitors in the entry-level servers space -- Dell Computer Corp. (Nasdaq: DELL) and IBM Corp. (NYSE: IBM).The system will have a starting list price of $3,000 for a system with three 36-GByte Seagate Technology Inc. (NYSE: STX) Ultra320 SCSI drives, which works out to about 2.8 cents per MByte.

"We are getting good margins with this product, even though it's priced below Dell and IBM," says Diefenthaler. "We get better margins on this than on our servers, so it's an attractive business for us."

Gateway's 2U-high JBOD system, configured with LSI Logic Corp. (NYSE: LSI) SCSI controllers, can hold up to 1.7 TBytes of storage. Customers can optionally use LSI's RAID controller with the system "to achieve even greater data protection," according to Gateway [ed. note: for those who want to dabble on the bleeding edge!].

The company will also roll out an Linear Tape Open (LTO) tape autoloader, which holds eight cartrdiges. The Gateway-branded autoloader, priced starting at $5,800, was developed by Certance LLC, Seagate's tape drive affiliate. Gateway will also resell Veritas Software Corp. (Nasdaq: VRTS) Backup Exec 9.0 and Yosemite Technologies Inc. Tapeware XE 7.0 backup applications.

Gateway plans to officially announce the products next week, on Aug. 26.John Webster, founder of consulting firm Data Mobility Group, notes that many of the traditional enterprise-oriented storage players -- such as EMC Corp. (NYSE: EMC) -- are looking to mass market opportunities as an engine for growth, so it seems just as reasonable that Gateway should try to move up the foodchain.

"Why can't an established mass market player look to the enterprise for growth opportunities as well?" he says. "Turnabout is fair play."

True enough, but Gateway will need to do more than follow the herd several years after the fact if it wants its fledgling storage business to thrive.

Todd Spangler, US Editor, Byte and Switch