With 140,000 thin clients sold last year, NCD holds 40 per cent of a market that analysts say is set for big growth in the next few years.
That?s not a bad position to be in, according to president Bob Gilbertson, and he believes the launch of Microsoft's Hydra terminal server software at PC Expo this week will boost the market further.
Microsoft rolled out Windows NT Server 4.0, Terminal Server Edition, formerly known as Hydra, in a very atypical vent - low key and almost halfhearted. There was no big event ? though executives from Intel and Microsoft did speak at a press conference set up by NCD.
But NCD?s Gilbertson says it was still a significant moment: ?This is the first official endorsement by Microsoft and Intel of the thin client?, he said.
Gilbertson admits that both Microsoft and Intel had been reluctant to embrace the thin client concept. And he takes credit for bringing both of them over. ?[Microsoft] first came up with the NetPC out of thin air, and that didn?t work," he said. ?When I told Bill Gates that Microsoft could get $39 more for a thin client than for a PC, that?s when he really became interested."
Gilbertson said he also negotiated with Intel chief Andy Grove, to get the chip giant interested in thin clients. ?I told him that if he wasn?t going to do it, someone else was going to do it anyway," Gilbertson recalls.
NCD landed a deal to develop a reference design for a Windows Based Terminal (WBT) based on Intel?s Lean Client specification. The first of these Intel based WBTs, the NCD Thinstar 300, was announced this week and will ship in the fourth quarter. Pricing has not yet been determined.
NCD has built on its years of experience in the X terminal market to become the dominant player in the thin client space. The company?s current 40 per cent share of the thin client market (which includes Java network computers as well as WBTs) is due in large part to an OEM deal with IBM - NCD manufactures IBM?s successful Network Station NC.
Wyse, NCD?s largest competitor, has 24 per cent market share, according to data from Zona Research.
Analysts expect the thin client market to grow strongly now WBTs have the official Microsoft imprimatur and Java NCs are maturing. From only a few hundred thousand units in 1997, IDC estimates that almost seven million thin clients will ship in 2002, five million of which will be WBTs.
Gilbertson has his own estimate of the potential market for WBTs. ?I look at Unix," he said. ?X terminals are about 20 per cent of the market. I think the WBT penetration in the PC market will be similar."
Gilbertson said he is not discouraged by the failure of Java based NCs to take off.
?Two years ago, we decided that [the Java NC] wasn?t going to make it," said Gilbertson. ?Interpreted languages are too slow in production environments. And Java was only 18 months old then ? and I don?t know of any language that matured in less than five years.?
On top of that, Gilbertson said, early NC designs by Sun and Oracle were ?abominable?.
Though some of the Network Stations that NCD builds for IBM run Java, Gilbertson said his company is now squarely behind the WBT.
But just like Java based NCs, WBTs are turning out to be more expensive than initially expected. There?s not just the client hardware ? most WBTs will be priced between $600 and $800, without a monitor ? but also the hefty server hardware and software.
While Microsoft will sell the Terminal Server edition for the same price as the basic NT Server 4.0, essentially making the server side free, a full NT Workstation user license at $269 will be required for every user, as well as a 'Windows NT Server 4.0 File and Print Client Access Licence' at $39.95.
This will make WBTs more expensive ? in initial purchase, at least ? than entry level business PCs. But according to Gilbertson, the potential total cost of ownership savings far outweigh these high initial costs.
Like Tektronix and Wyse, NCD has for some years been selling terminals designed to connect to Citrix Winframe, the multiuser Windows NT software that is the basis for Terminal Server. Terminal Server, unlike Winframe, will require these terminals to run a special version of Windows CE and use a new, Microsoft designed protocol called RDP.
All vendors that sold Winframe terminals are rushing to launch products running CE, the cutdown version of Windows. Wyse?s first CE based WBT, the Thinstar 200, has a Mips processor. It will ship in about 30 days for $649.
One customer that has already decided to roll out the Thinstar is yogurt manufacturer M|ller. Over the next 12 months, over 200 M|ller employees across the UK will receive a Thinstar WBT. They will be used, among other things, to access Microsoft Office 97.
NCD is also seeking an edge by offering connectivity to more than just NT. The company has developed software for connecting thin clients to other systems.
Based on the Rumba terminal emulation software from Wall Data, NCD Thin Client Rumba runs on a Windows NT server to provide thin client users with access to mainframe, AS/400 and other systems.
NCD will also offer similar terminal emulation that will be installed in Flash memory and run locally on some thin client models. Another package, Thin Client Xware, will run on either an NT server or on the thin client itself to provide access to Unix/X11 applications.
NCD hopes to sell about 50 per cent of its WBTs to OEMs. The rest will go through distributors.
Gilbertson believes that many small and medium businesses will decide to buy just the WBTs, and outsource the servers ? for instance, to their Internet service provider. ?There?s a market going to develop very fast for server farms," Gilbertson predicts. ?As soon as these becomes available the next market becomes the home?.
He suggests that future home users will access software such as MS Word over the Internet from a WBT ? and pay by the hour.
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