Gateway exploring blade servers

Gateway will attempt to jump into the market for blade servers next year, as demand for these superslim servers is finally taking off.

The Poway, Calif.-based computer manufacturer has appointed engineers to start tinkering with blade server designs, according to sources close to the company. Ideally, the servers will come out in 2004.

A Gateway representative would not discuss product plans but said the development process is already under way.

"We don?t have anything on the horizon right now, but we are investigating it quite heavily," a representative said. "We do have people that are looking at it internally."

Although Gateway is often viewed as a company dedicated to the consumer market, approximately half of its revenue comes from the business and government markets. Moreover, this half of the company's business is profitable, the Gateway representative said.

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In the third quarter, Gateway reported revenue of $883 million and a net loss of $139 million.

Blade servers are skinny computers shorn of their plastic enclosures and stacked vertically inside specialized racks. Typically, compared with traditional rack-mounted servers, many more blades can fit into a confined space. This helps companies save expensive office real estate.

More importantly, blades can be more easily managed and updated than can traditional servers because of the network interconnections embedded in the rack and the management software suite included by manufacturers. Operating systems on several servers, for instance, can be patched simultaneously rather than in sequence, thereby cutting down management costs.

Different types of equipment, such as networking equipment and storage devices, can also be inserted into blade racks, essentially transforming the racks into minicomputer rooms in their own right.

Despite these advantages, blades have been slow to gain acceptance, but sales are beginning to climb. The concept debuted in early 2001, the dawn of the downturn.

Start-ups brought out the first blades, but major manufacturers like IBM didn't start seriously promoting them until last year. Since then, sales have begun to climb.