Announces Major New Strategic Alliances to Further Strengthen the Company's
Beyond-The-Box Growth and Greatly Enhance Distribution
- Targets 40% Non-system income by Q4 2000
- Targets $30 Billion in revenue by 2004
- Strategic alliances with Sun Microsystems, OfficeMax, eSoft
SAN DIEGO, Feb. 23 /PRNewswire/ -- Gateway today announced its goal of
generating $30 billion in revenue in 2004, with the majority of its profit
coming from non-system income. As illustration of its progress against that
goal, Gateway said it expects non-system income to reach 40% by the end of
2000, which is twice the level of 1999 and 10 percentage points higher than
the target previously announced for 2000.
In addition, Gateway announced several major new strategic alliances with
best-of-class companies to further strengthen Gateway's beyond-the-box
offerings to consumers and businesses and greatly expand the company's unique,
multi-channel distribution model.
The alliances are with:
-- Sun Microsystems, to provide Sun's enterprise business customers with
one-stop shopping by melding Gateway's hardware with Sun's end-to-end,
Internet-based computing solutions;
-- OfficeMax, to create nearly 1,000 new Gateway-managed store-within-a-
store distribution points for Gateway products in every U.S. OfficeMax
location;
-- eSoft, to provide small businesses with scalable Internet solutions
designed to grow with their business needs.
More detail on all strategic relationships follows.
"Our first-mover status in taking our client relationships beyond the box
and our unique multi-channel distribution model position us extremely well for
accelerated growth and profitability," said Jeff Weitzen, president and chief
executive officer. "This is the year we take both of those competitive
advantages and bring them to life in the marketplace with an array of new
solutions and points of distribution that will help us reach more clients than
ever before."
About Gateway's New and Enhanced Partner Relationships
Sun Microsystems
In a move that will significantly foster integration of Internet access
for end-to-end computing solutions, Sun Microsystems, Inc. (Nasdaq: SUNW) and
Gateway today announced a strategic alliance that will provide customers with
one-stop shopping for heterogeneous, interoperable computing solutions. Under
the agreement, Sun sales representatives will refer customers to Gateway for
computers that meet their enterprise customers' Windows-based PC requirements.
Gateway will pre-load these PCs with the Sun Portal Pack(TM), Sun's webtop
application software, beginning in April. (See separate release)
Office Max
OfficeMax, Inc. (NYSE: OMX) and Gateway today jointly announced an
agreement that provides for Gateway to assume the operation of OfficeMax's
retail computer departments through the installation of a Gateway store inside
of all OfficeMax locations in the United States. In order to continue
strengthening its role as its clients' trusted guide to technology, specially
trained Gateway personnel will staff these innovative stores-within-stores,
providing customers with the same level of friendly service and technology
advice that they'd find in a Gateway Country(R) store. The companies expect
to jointly launch more than 1,000 of these innovative points of distribution
by the end of the first quarter of 2001. As part of the transaction, Gateway
also will invest $50 million in OfficeMax convertible preferred stock, $30
million designated for OfficeMax and $20 million designated for OfficeMax.com.
The agreement also includes major cross marketing arrangements such as
OfficeMax.com, OfficeMax's e-Commerce site, having its icon and hot link
featured on the computer desktop of all Gateway systems sold to small
businesses and consumers. Gateway will be the exclusive seller of personal
computers and servers on OfficeMax.com and OfficeMax.com will be Gateway.com's
exclusive office products Internet partner. (See separate release)
eSoft
Gateway has formed a strategic alliance with eSoft (Nasdaq: ESFT) that
allows Gateway to leverage eSoft's services and software for small and medium
business customers' networking and Internet application needs. Gateway has
committed to invest $25 million in eSoft and will work with the company to
develop joint solutions to enable customers to leverage the Internet for their
business.
Through its relationship with eSoft, Gateway will enable its small and
medium business clients to establish an on-line presence and secure networked
operations with a host of infrastructure applications and Internet management
systems, including firewall protection, web hosting, virtual private networks
and network management services. eSoft also provides the platform for web-
hosted Application Services, offering horizontal business software solutions
for horizontal applications such as finance and human resources software and
vertical applications for the healthcare and automotive industries.
Gateway will combine eSoft application and management software with its
server appliances and Internet access for scalable local area networking and
Internet solutions that grow with a business' changing needs. Gateway will
sell and support these branded services to customers on a subscription basis.
The two companies will work together to develop additional functionality and
expand offerings for vertical and horizontal business applications. (See
separate release)
Gateway also announced two important executive changes today. Todd
Bradley, previously senior vice president, Gateway Consumer, has been promoted
to executive vice president, Global Operations. In this new role, Bradley
will continue management responsibility for Gateway's Europe, Middle East and
Africa region and will add responsibility for Gateway's Asia-Pacific region.
He will also now lead the company's manufacturing, information technology,
business process simplification and business development functions.
Bradley, who joined Gateway in September 1998 after serving as CEO of one
of the GE Capital Services companies, has been responsible for improving and
expanding services to clients by managing sales, customer support and
marketing functions in the consumer division of U.S. operations and all of
EMEA operations, including the telephone, Internet and Gateway Country store
channels.
In addition, Bradley has been instrumental in the development of Gateway
in Europe. He led the extensive executive recruitment effort at Gateway's
Dublin, Ireland, operations, oversaw the revamping of manufacturing facilities
to increase efficiencies, created outbound Gateway Business teams and
supervised the launch of Gateway Country stores in Europe. Under his
guidance, Gateway also became the first PC maker to launch an ISP in the
United Kingdom and Ireland.
"I really want to congratulate Todd on a well-deserved promotion and thank
him for bringing our Consumer unit to new heights, while at the same time
leading our business in Europe," Weitzen said. "Todd's a great leader with
superb business acumen and we're extremely fortunate to have an executive of
Todd's caliber at Gateway. I'm confident he'll bring the same passion and
talent to his new post."
Gateway also announced that Cliff Holtz has joined Gateway as Senior Vice
President, Gateway Consumer, replacing Bradley. Holtz comes to Gateway after
a 16-year career at AT&T, where he most recently served as President of AT&T's
Small Business Division's Metro Markets operation, one of the company's
biggest and most profitable business units. Holtz had operating
responsibility for this $3.5 billion operation with more than five thousand
employees and agents, and was credited with greatly expanding the unit's sales
channels by adding an extensive outbound sales force, enhanced Web
capabilities and expanded nationwide retail presence for AT&T's small business
products and services. Holtz began his career at AT&T as a sales account
executive, and has held a number of positions of increasing importance,
handling product marketing, sales, operations and strategy throughout the
company, including running AT&T's $2 billion consumer pay phone business in
1996.
Holtz received a BS in Business Administration from Albany State
University, and an MBA from the University of Chicago. He starts at Gateway
February 28.
"I worked closely with Cliff for years at AT&T, and he is one of the
smartest, most well-rounded new breed of leaders in the business world today,"
Weitzen said. "He really understands what it takes to develop deep, long-
lasting relationships with customers and he understands what the convergence
of products and services is all about in the new Internet economy. He'll play
a central role in our plans to expand our bundled consumer solutions this year
and beyond."
About Gateway
Gateway (NYSE: GTW), a Fortune 250 company founded in 1985, focuses on
building lifelong relationships with consumers and businesses through complete
technology personalization. Gateway ranked number one in U.S. consumer PC
revenue in 1999(1) and was rated among the top ten best corporate reputations
in America according to a survey conducted in August of 1999 by Harris
Interactive and the Reputation Institute and published in The Wall Street
Journal. Gateway employees worldwide provide clients with services and built-
to-order computers that consistently win top awards from leading industry
publications. Gateway had total global revenue of $8.65 billion in 1999 and
shipped 4.68 million systems. For more information, visit our Web site at
http://www.gateway.com
(1) According to GartnerGroup/Dataquest US PC Quarterly statistics.
The above statements include forward-looking statements based on current
Gateway management expectations. Factors that could cause future results to
differ from these expectations include the following: general economic
conditions; growth in the personal computer industry; competitive factors and
pricing pressures; component supply shortages; risks relating to new or
acquired businesses, partnerships, joint ventures and strategic alliances; and
inventory risks due to shifts in market demand. Additional factors are
described in the Company's reports filed with the Securities and Exchange
Commission.
SOURCE Gateway, Inc.
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Related links:
http://www.gateway.com
CONTACT:
John Spelich, Director, Corporate
Communications of Gateway, Inc., 858-799-2657,
john.spelich@gateway.com
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