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Commentary: Gateway's move good for NAS

Gateway's entrance into the market for network-attached storage benefits both the PC maker and the NAS market.

    By Pushan Rinnen, Gartner Analyst

    Gateway's entrance into the market for network-attached storage will likely benefit both the PC maker and the NAS market.

    Gateway's motivation is plain. Growth in the PC market has slowed dramatically and has even stalled in Gateway's home market in the United States. This situation reflects not just the current economic slowdown but also the maturing of the U.S. PC market as a whole.

    Because of both the slowdown and the maturing market, the U.S. PC industry declined 3.5 percent for the first quarter of 2001 compared with the year-earlier period, according to Gartner's Dataquest unit. The growth-rate malaise in the U.S. market affected the worldwide PC market, which had shipments of 32.5 million units in this year's first quarter, an increase of only 3.5 percent over the same period last year. The Dataquest figures also show that for the first quarter of 2001, Gateway's PC shipments dropped to 935 thousand units, compared with 1.03 million units in last year's first quarter.

    On the other hand, the NAS market was quite healthy in 2000, according to Dataquest. Worldwide NAS vendor revenue grew 150 percent in 2000 to $1.4 billion. The top five vendors by revenue were Network Appliance (50 percent market share), EMC (36 percent), Quantum/Snap Server (4 percent), Gateway rival Dell Computer (2 percent) and Auspex (1.8 percent). The top five vendors in terms of units shipped were Quantum, Network Appliance, Maxtor, Dell and Hewlett-Packard.

    To fuel its growth, Gateway has naturally looked around for markets that are still expanding quickly, and NAS represents a good choice. As the Internet makes business more information intensive, individual workers have more data to store. NAS offers a quick way for small work groups to add the storage capacity they need without expanding the enterprise's whole storage network.

    See news story:
    Gateway makes bid for storage buyers
    Gartner does not believe that Gateway will field technology to differentiate itself from its NAS competitors. Rather, Gateway's success will come from attacking an underserved segment. The two major entry-level NAS vendors today, Quantum and Maxtor, target work groups within midsize and large enterprises. Few vendors offer this type of storage for traditional small to midsize businesses, so Gateway has an opportunity there.

    Gateway already has a significant presence in the small-business market, which will boost its chances for success. Gateway's physical stores also appeal to small businesses, and the vendor can use them to advantage in growing its NAS sales. Thus, this initiative will extend the overall NAS market while providing new fuel for Gateway's growth.

    (For related commentary on network-attached storage, see TechRepublic.com--free registration required.)

    Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.