Although the future of Oracle?s Network Computer business did not seem bright only six months ago, the organisation now appears to have pulled itself back from the dead.
In May, Larry Ellison, Oracle?s chairman and chief executive, as good as threw in the towel on his grand design for the corporate network computer when the price of Windows-based PCs plummeted and NCI was obviously going nowhere with its PC-replacement business model.
Ellison said at the time: "The corporate NC has really been eclipsed by the personal computer becoming a network computer in price and in function" and this led to a top-level shake-up at Oracle?s troubled subsidiary.
Jerry Baker, Network Computer?s (NCI) chief executive and a 14 year Oracle veteran, was replaced by David Roux, an Oracle vice president who focussed on marketing and finance, but as a result much has changed at the organisation over the past six months.
The most obvious expression of confidence in the future is that NCI is aggressively hiring, particularly software engineers, again and people are also applying for jobs.
NCI's December 19,1997 Christmas present to 30 of its corporate sales staff was the loss of their jobs, but this, along with an earlier round of job cuts when the unit bought Netscape's Navio business, now appears little more than a distant memory.
NCI currently employs more than 200 people and wants this to increase by at least 10 per cent over the next year. But, rumours are also flying that the organisation may be spun off separately in an initial public offering (IPO), which would make it an attractive proposition to top flight developers due to the promise of share options.
So, what has turned a directionless company that appeared to be in a dead-end business earlier this year into a potential IPO candidate?
First, NCI has moved from only targeting the corporate market to focussing on the overlapping TV, consumer and embedded device marketplaces as well.
"In the past six to eight months, there's been nothing short of a wave of consumer electronic devices that have gone digital before our very eyes," said Dave Limp, NCI's vice president of marketing.
So, NCI has eagerly been trying to supply its technology to consumer electronics vendors that want to Internet-enable their products.
Research companies also predict that the market for web-enabled appliances is about to boom. Zona Research estimates that 1.3 million Internet-enabled phones, handheld computers, pagers, and other similar devices will be sold this year, while International Data Corporation (IDC) forecasts that the market will grow to 41 million devices by the year 2002.
As a result, to cash in on the trend, NCI released eNavigator for Internet-enabling embedded devices like telephones, palmtop computers and devices such as petrol pumps this week.
"This kind of thing is going to make the Internet pervasive in people's lives in the next few years," claimed Limp.
ENavigator?s first licensee is Wind River Systems, which has incorporated the product into its VxWorks embedded operating system and licensed it to Fujitsu. The Japanese giant is currently only shipping its Intertop offering for web-surfing and email in Japan, however.
Wind River also plans to use eNavigator as the basis of two new products that will appear this quarter. HTMLWorks and eNavigator for VxWorks will both be aimed at manufacturers of embedded systems.
Because eNavigator requires less than 1 MB of memory, NCI is targetting it at devices that require Internet connectivity and at applications such as email, Web browsing, personalised information delivery, and automatic software updates.
But Brasche claims that the demise of the corporate market for such devices has been greatly exaggerated.
Software such as NC Administration Server, which includes NC Desktop and NC Network in a Box, is currently being deployed by companies such as Fuji Electric in Japan for shop floor automation applications, he said.
"Microsoft did a lot of work to discredit the NC," he added, and promised new customer announcements in the near future.
But David Card, analyst at Jupiter Communicationshe was much more bullish about NCI's chances of embedding its software into television sets rather than other devices.
However, the promise of reasonably-priced Internet-enabled televisions appearing on the market by Christmas has been broken by infighting between computer companies and TV manufacturers over what technology to use.
As a result, the Advanced Television Enhancement Forum (ATEF) has now been set up to try and break the deadlock. NCI, Intel, Microsoft and content providers such as Disney and CNN are all members and are attempting to woo consumer electronics giants over to the ATEF?s specification.
Despite the difficulties, it is here that NCI has won several contracts, however, mainly in international markets.
In March, the UK's Cable & Wireless started using NCI DTV Navigator technology to build an interactive TV platform supporting five million set top boxes in the UK, followed by Hong Kong and Australia.
Last month, Belgacom said it would use NCI's TV Navigator and Custom Connect Server software as the basis of the world's first home banking service, dubbed CyberTV. Customers will be given Acer set-top boxes based on smart card technology to enable them to manage their financial accounts, pay bills, and transfer funds.
Although Oracle is the majority shareholder in NCI and Netscape the largest minority owner, other companies such as Sega, Nintendo, Sony, NEC and Acer also have small stakes in the organisation.
While NCI is a private company, it claims to generate sufficient revenues to no longer have to call on its owners for capital. It is not yet profitable, however, and according to Brasche, this means that going public is not on the cards right now.
"Of course it's a long term goal of ours to be independent, but it's not the focus of the company now," he said.
Although conventional wisdom once dictated that a company had to be profitable before going public, this no longer applies for Internet start ups. But, to attract investors, NCI acknowledges it needs to have the customers and technology to show sceptics that it could be profitable in future.
But it also admits that it?s major rival in bid situations is none other than Microsoft, although Big Green?s WebTV and Windows CE mobile operating system does not pose a threat to NCI just yet.
Brasche said: "We meet them on every major deal out there, but we believe we have a 12 month window."
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