Gateway 2000 Sets New Value Paradigm with Formal Entry into the Server Market with Proven, Award Winning Technology.

NORTH SIOUX CITY, S.D.--(BUSINESS WIRE)--Sept. 10, 1997

Launch of NS Series Servers continues company's commitment to

corporate and organizational computing

Gateway 2000, Inc. (NYSE: GTW), a global leader in the direct marketing of PCs, today announced its NS Series of servers, marking its formal entry into the server market. This announcement follows closely behind the company's recent announcement of its E-Series line of managed PCs for networked environments and its acquisition of server technology leader Advanced Logic Research (ALR).

The NS Series servers are based on proven technologies from ALR and are centered on reliability, high degrees of fault tolerance, scalability, and performance at unprecedented prices. The NS Series servers are available immediately at a starting price of $2,499. The new servers include workgroup, departmental, and enterprise class servers.

"We are formally entering the server market in a very aggressive fashion," said Ted Waitt, chairman and CEO of Gateway 2000. "We are bringing world class technology to market and incorporating the strength of our direct business model and Gateway's classic tradition of providing the best value for the customer. Server manufacturers have enjoyed high margins at the expense of their customers; our announcement today will certainly be welcome news for server buyers."

NS Series Highlights

The NS Series servers offer the highest level of reliability based on fault tolerance features available on all models. Those include features normally reserved for mid and high range servers that are now available at the entry level. The NS Series is designed to reduce total cost of ownership for Gateway customers through reduced acquisition costs, high reliability through fault-tolerance, manageability via ALR's Informanager(TM) and ActiveCPR(TM) software, high degrees of scalability, and world class performance.

NS 7000 Workgroup Server

The NS 7000 represents the entry level of the Gateway server series and is positioned as a workgroup server. The NS 7000 is available with fault-tolerant features such as RAID support and error correcting memory (ECC) system. The NS 7000 also features scalability of up to two Pentium(R) Pro or Pentium(R) II processors, memory expansion up to 512MB EDO ECC DIMM, and three Quick Hot-Swap (QHS) disk drives. The NS 7000 is designed for workgroups, small departments, small business, and classrooms for use as print and file servers. Pricing for the NS 7000 starts at $2,499.

NS 8000 Departmental Server

The NS 8000 represents the mid-range of Gateway servers and combines a flexible architecture with performance, storage capacity, and redundancy features to provide high levels of availability. The NS 8000 features a wealth of fault-tolerant and redundant features. These features include dual 365 watt N+1 power supplies with loadshare capabilities, hot-swappable RAID support with up to twelve SCA drives, error correcting memory system, and multiple cooling fans. The NS 8000 is scalable up to two Pentium Pro or Pentium II processors, 512MB EDO ECC DIMM capacity and twelve QHS disk drives. The NS 8000 is ideal for large workgroups, departments, small to medium businesses, and school offices. Pricing for the NS 8000 starts at $3,799.

NS 9000 Enterprise Class Server

The NS 9000 is a high end server that supports scalability and some of the highest reliability features available anywhere in the industry. The NS 9000 is also centered on ALR's Revolution 6X6 technology that recorded the highest tpmC performance benchmarks of any Intel-based architecture. This combination makes the platform an excellent base for high availability applications such as large file and application servers. The NS 9000 features include implementing up to six Pentium Pro processors, up to four redundant/hot pluggable N+1 power supply subsystems, RAID support, multiple cooling fans, and error-correcting memory. The double wide chassis is designed for serviceability with 14 drive bays, including up to 12 optional Quick Hot-Swap drive bays. The NS 9000 also includes a LCD touch control panel and lockable drive bay doors and front panel for enhanced manageability and security. Implementation of the NS 9000 is designed for large departments, medium to large businesses, and academic computing centers. The NS 9000, with its management capabilities, is also ideal as an unattended web server. Pricing for the NS 9000 starts at $12,999.

Informanager and ActiveCPR(TM) Integrated Server

Management Solution All Gateway NS Series servers are managed by Informanager,developed by ALR, which utilizes thirty sensors to monitor key system operational data. This information is relayed to network administrators giving them the opportunity to address system problems before they lead to costly server downtime and component damage. Informanager also supports local and remote software monitoring via Windows NT(R) Workstation 4.0, Novell(R) NetWare, and SCO UNIX applets.

A key component of Informanager is ActiveCPR (Central processor Recovery), a CPU fail-over and auto recovery that protects a multiprocessor-based server environment from potential processor failures and software crashes. This maximizes network performance and system uptime. The ActiveCPR auto recovery system features 12 integrated sensors that monitor processor voltage, temperature, and cooling fans. Out of spec operation triggers ActiveCPR's early warning system, giving network users a chance to log out before auto shutdown emergency procedures are implemented. ActiveCPR then safely brings the server system down, takes the faulty processor off-line, and automatically reboots the entire system. Within a few minutes, network operation is stabilized to normal conditions.

In addition, ActiveCPR offers "Server Watchdog" function that polls processor activity based on user-defined parameters. In the event of a software crash, ActiveCPR can automatically reboot the system.

Gateway 2000 in Networked Environments

With the addition of the NS Series servers, Gateway now has a full line of product for corporate and organizational computer buyers. Gateway 2000 has a large presence in the corporate, educational, and government markets. Gateway products and values also consistently win the endorsements of information technology managers in readers' surveys of product preference conducted by various industry publications.

"We now have the products, systems, people and the service in place to bring our customers in the corporate and organizational marketplace truly personalized service, the freshest technology and best values available," said Bob Spears, senior vice president, Gateway 2000.

Sales Model

With the acquisition of ALR, Gateway is the first computer company to make available a hybrid dual channel sales model. Gateway will continue its strong presence in the direct channel, offering buyers the ability to place custom orders directly with the manufacturer. ALR will continue to work within their channel, capitalizing on the service and configuration strengths of qualified value added resellers.

"Our new sales model presents a real benefit to PC and server buyers," commented Waitt. "Just like our build to order manufacturing capabilities have given them the choice of how they wanted their systems built, they now have the choice of how they want to buy their systems. This customer choice strategy will make the strengths of both channels available for the best delivery of our high value products.

Service and Support

Gateway is offering customizable sales and support plans on its server product line. The benefits include a standard 3-year parts warranty, 1-year on-site service, 4-hour on-site response option, and 30 day Network Operating System (NOS) support. Additional options are available with the extended parts warranty, on-site service and NOS support.

About Gateway

Gateway (NYSE: GTW), a Fortune 500 company founded in 1985,is a leading global direct marketer of PC products. The company, headquartered in North Sioux City, South Dakota, has manufacturing facilities in the United States, Ireland and Malaysia and employs over 10,000 people worldwide. Gateway products and services consistently win top awards from leading industry publications. In 1996, the company shipped 1.9 million systems and reported revenues of $5 billion. Revenue for the first half of 1997 was $2.8 billion with net income of $124 million. For further information, visit Gateway at http://www.gateway.com.

CONTACT: Gateway 2000, Inc.

Jeff Hanson, Marketing Communications,

[phone] e-mail: [e-mail]

or

Catherine King, Marketing Communications,

[phone] e-mail: [e-mail]