Australian fallout from Gateway closure

PC vendor Gateway closed its sales and marketing operations in Australia overnight with over 200 Australian staff and 19 New Zealand staff losing their jobs. Operations in Asia and Europe will also close an announcement to the New York Stock Exchange said.

The announcement confirmed what many had predicted for several months. Locally, all Australian stores have been closed and the head office in Sydney will be vacated. Just two days ago, ARN learnt that the head office was soon to be vacated to make way for a new tenant, denied by company officials at Gateway who claimed they had a lease until 2003. "This is another tid-bit of information coming from the media," Gateway spokesperson Mike Buchanan had said. "Because our future is so open ended, it leads itself to speculation."

Buchanan now says no one in the Australian office knew of its fate until earlier this morning. A staff meeting has now been held to discuss the closure.

Generally a direct seller, Gateway's closure will not have a significant impact on resellers. However, in late July the vendor began a channel program called "Gateway Associates" which was designed to use resellers to gain sales in the small business sector. Several of its "Gateway Associates" channel partners have indicated their businesses will be significantly impacted from the closure.

One such associate partner, Andrew Edmundson of Edmundson Consulting said his main concern is warranties. "I have been selling a lot of their business-class machines - they came at a very reasonable price," he said. "The impact on me and my customers is in what happens to the warranties. These people purchased machines from me under the expectation of a three-year, on-site warranty. My customers trust my judgement so I need to be sure about this support."

But Gateway's Buchanan said all warranty support, parts support and on-line support will remain in Australia despite the sales and marketing activities closing down. Third party companies such as Datacom currently provide this support.

Anthony Seagg, director of professional services at Datacom said that to his knowledge, Datacom will continue to provide technical support via a call centre, but was unsure of how long the contract will remain in place.

David Johnson of Gateway Associates partner Johnson Data Management said he has been told Getronics is stocked up and signed up for a three year contract to supply parts support for Gateway customers and resellers.

IT leasing firm Rentworks had also fostered a relationship with Gateway less than five months ago. Being such a young arrangement Sean Cookson, national sales and channel manager for Rentworks, says the PC maker's withdrawal will not have a major impact on business.

"It hadn't reached high volume," said Cookson. "It was a relationship we were hoped would be fruitful but it's better that they pulled out now than in eighteen months time. I wouldn't say it's got our noses out of joint."

Another former partner was less than enthusiastic about Gateway's attempt at a channel program. "We didn't last very long with the program," he said. "There were people involved in putting together who put a lot of thought into it, but they changed staff not long into it. It was a shame. I don't think Gateway are really committed to doing anything from a channel perspective."

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