What is an SMS gateway?
An SMS gateway is the link between your software and the mobile networks. Without one you would have to connect to every operator separately; with one you address a single system that delivers the message to the right operator.
What it solves for you
No contracts and no technical connections per network. You send a message with a number, and the gateway determines the route.
How gateways differ
Mainly in the routes. A direct connection with an operator delivers faster and more reliably than a route running through several intermediaries. That difference does not appear on the price list but it does appear in your delivery rate.
What to check when choosing
Where are the servers and the data? Do you get a delivery report per message? Can you receive replies? And is somebody reachable when a destination suddenly stops delivering — that is the moment the difference between providers becomes clear.