The network computer will force the PC industry to refocus on Internet devices, a shift that poses a real threat to Microsoft's dominance. This is the view of US analysts at Forrester Research,although they do not believe the NC will replace the PC in the corporate world.
By 2000, Tom Rhinelander, author of 'PCs meet NCs', believes network computers will make up 15 per cent of installed computers in medium to large corporations. However, "hardly any" of these devices will have been purchased to replace PCs, which will remain the dominant client and local server in larger organisations. Instead, they will function as additional computers for mobile workers or occasional IT users, or will replace dumb terminals.
"There are still huge numbers of terminals out there and their users need to be linked to the corporate Intranets," said Rhinelander. As companies become more and more dependent on Intranets as the basis for their systems, NCs will be a low cost method of connecting "disenfranchised" terminal users, says Forrester. It also reduces the amount of training required to bring people unused to PCs into the overall IT structure.
The explosion of Intranets will, however, put huge pressure on the traditional PC model. Although Forrester believes the PC industry will respond to this pressure sufficiently rapidly to prevent the NC taking significant chunks of its market, this process may sideline Microsoft. "The NC, along with Internet standards and Java applications, will force the PC to morph into an Internet-optimised device that Microsoft can no longer count on dominating," says the report.
Microsoft's response to the threat will be to improve the ease of use and Internet support of the Windows environment, with additions such as embedded Internet standards, a built-in Java Virtual Machine and an increased focus on component-based applications. While these will provide an effective short term counterblast to the threat from the NC, Microsoft will also be eroding its own Win32 monopoly by offering these enhancements, believes Rhinelander.
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