As the summer vacation of 1997 rolled around, two titans of the computer industry appeared--at least at first glance--to be talking about education. "The information age needs to begin with schools," began a statement from Larry Ellison, chairman and CEO of Oracle Corporation, posted on the company's Web page. "Only if computers are as prevalent, accessible and easy to use as pencils will America's children be prepared for the 21st Century. That is why the slogan of Oracle's Promise is 'Now every child can use a computer.' The Network Computer is a device that will be the key to the Information Age, giving everyone a realistic chance to participate." In the spirit of giving, Oracle Corporation pledged $100 million to what it called "Oracle's Promise" foundation.
So far so good. Except that Bill Gates and his wife, as well as Microsoft Corporation itself, also announced the donation of a combined $400 million worth of software to libraries. In the end, it was unclear who had sandbagged whom. "It took Microsoft one year to respond to the Internet, six months to respond to the Network Computer, and only six hours to respond to our donation," Larry Ellison told industry analysts in New York.
In the computer industry, even philanthropy is controversial. What some may see as unselfish giving, others view as yet one more way to promote a new trend in the computer industry that has both Gates and Ellison trading potshots. The trend might be termed: "less is more" (a phrase attributed to architect Ludwig Mies van der Rohe).
"Small" is not a concept that comes easy to computer companies. Except for the shrinking footprint of laptops, we expect disk drives to hold more data, microprocessors to run faster, data buses to be wider, and software upgrades to have feature lists that are longer. But recently, a backlash has been gaining momentum against all of this elephantitis. You can see it in the reaction to Intel's Pentium II, a robust processor without a doubt, but one whose market is less assured than in years past. After all, how many megahertz do you actually need to run a word processor or a spreadsheet--two of the most common PC applications? Not for nothing didthat Intel chairman and CEO Andy Grove deliver the keynote address at the Electronic Entertainment Expo (E3) in Atlanta, Georgia, this year. E3 is best known as the place to debut computer games, and computer games are among the few only class of application where processing speed and graphics handling count. The title of Grove's talk said it all: "The PC: It's where the fun is!"
*If you have interested in Grove's keynote, check here!
As for Ellison, he was in New York talking about the Network Computer (NC), and in the process, butting heads against Microsoft and partners in proposing a smaller PC client, one that costs less and does less. The educational angle is simple enough: both of these computers might well be welcome in educational settings, where budgets are strained and demand for a computer on every kid's desk is becoming universal. But the real market for these machines is not schools, nor is it--as Oracle first proposed--home users. Rather, it is corporations, where both the Network Computer and Microsoft/
How thin should a thin client be?
"Thin client computing" counters the practice of people augmenting the computer on their desktop. If my company wants to support Microsoft Word and I prefer to use Word Perfect, there is nothing to stop me, except perhaps corporate policy, from my installing Word Perfect on my machine. Of course, if I want to transfer a file to a colleague, there may be some translation complications. And what happens if I am running an unsupported application and I run into problem? Often, it is the MIS department that must figure out what when wrong, even though the problem was really my doing. The issue has gotten so electrified that some companies absolutely prohibit users from installing anything not dictated by the company. But as long as computers come with floppy and CD-ROM drives, the temptation to personalize one's working environment will be hard to resist.
And so it is the concern of maintaining control, rather than the cost per desktop, that has become the real factor for propelling alternatives to the PC for the corporate desktop. While it is true that network-based computers cost less per client, the cost isn't that much less--perhaps $1,500 a seat. The real cost is in maintenance. The market research firm Gartner Group, for example, estimates that a single PC sitting on a corporate desk can require $25,000 to maintain over just three years. By contrast, Gartner Group estimates that a Network Computer could cost as little as $7,000 to maintain over the same period. NCs are too new for anyone to really prove whether this is so, but that cost analysis is certainly compelling. For this reason, the "thin client" approach, in which you put most of the intelligence on the server, is becoming a war cry. The question is, how do you go about it? More specifically--how thin should a thin client be?
The NC represents the more radical idea. First proposed by an informal consortium consisting largely of Oracle Corporation, Sun and IBM, the NC was originally touted as an inexpensive home computer--one that even Larry Ellison's mother could use. That concept was widely panned by many observers, including yours truly. But the NC in a corporate environment is another matter. Here, the local area network is already in place, thereby removing the unpredictability of dial-up phone lines. Moreover, there is a software technology in place that makes thin client computing reasonably compelling. The Java model was essentially written with thin client computing in mind. You turn on your NC, download a Java applet, do your work, and when you turn your machine off for the day, the applet lives on in the server.
Oracle's support of network computing has progressed from a loose proposal to a wholly owned subsidiary, called NCI: Network Computer, Inc. Founded in '96, NCI bills itself as "the world's only software company to provide NC software." But NCI's product software to date consists chiefly of NC Server software, which it calls "an easy to administer, low cost method for deploying network computers--priced at $149 per user."
NC Server uses NCI's NCOS operating system, which runs on standard Intel hardware. It also integrates, not surprisingly, a whole wad of Oracle software, including Oracle's Video Server and Web Application Server, and Oracle's Web collaboration suite. The server also includes, and Interoffice for document sharing, and calendaring messaging and workflow. Interoffice also includes "Hat Tricks," a set of Java-based software productivity applets for word processing and presentation graphics. That need to support office automation software of the kind Microsoft is so good at developing may be the catch. The domination of Microsoft Office in the U.
Bill Gates himself has been happy to throw some darts at both the NC and its principale backer. He told a Silicon Valley gathering last May: ''There are a few companies, very few, who have always hated PCs. And they've hated them for good reasons: You can't charge high prices for databases, and you can't charge high prices for workstations when you have PCs around.'' Gates referred to the fact that NC computers would require that existing applications be rewritten. ''That's why they're called NCs,'' he said. ''Not Compatible.''
The counter-proposal to the NC emerged full force at the PC World show in New York last June, where Microsoft and Intel touted something called the NetPC. Those two companies were joined by a cross-section of PC makers, including Hewlett-Packard, Compaq, Dell and Gateway. The NetPC approach is a much less radical departure than the Network Computer--in the form of an Intel-based PC that is "sealed." That is, it has no floppy or CD-ROMs drives in which an enterprising corporate user can add his or her own software. Nor can end users open the box to add more memory, a custom modem, a faster graphics card, or even a faster processor.
In other words, a NetPC delivers the advantages of a personal computer but is "owned" by MIS. The biggest difference here is not the cost savings from a lack of drives, but simply who has control of the box. "We aren't going to force our different departments to switch to a NetPC," said Myles Trachenberg, vice president and chief information officer for Prudential Insurance's Health Care Unit, to a reporter at the San Jose Mercury News. Trachenberg noted that the NetPC could easily replace a desktop computer in any of Prudential's 500 offices that have a server. "What makes it work is we're not changing from applications that people are using."
For the home market: stripped down PCs and WebTV
While the cost of ownership may be the driving force in client purchases, PCs themselves are also dropping in price-- a trend started by Dell Computer, with IBM, Compaq, and other PC makers following suit. In the slowing home market, where stripped down computers costing around $1,000 (without the monitor) are selling comparatively well, especially to first time buyers. Compaq, for example, introduced two such machines in July: selling for $999 and $799. The latter model, called the Compaq Presario 2200, includes a 180 MHz Cyrix processor, 16 MB RAM expandable to 80 MB, a 1.
But the theory still remains that some buyers don't really want a home computer at any price--but rather, a device that scans the Web. That's the gamble Microsoft made last April when it paid about $425 million in stock and cash to acquire WebTV Networks Inc., the maker of a product that converts an ordinary television into one that can receive Web pages. The company also licenses its architecture to television makers, including Philips and Sony, who want to build hybrid televisions that do both.
The move was a financial boom to WebTV's founders, who each received $64 million, but appears to have been less than that for Microsoft, at least so far. According to documents filed with the U.
But this is still early in the game, and Bill Gates has more up his sleeve. Two months later in June, for example, Microsoft said it would pay $1 billion to invest in Comcast, the fourth largest cable operator in the United States. Microsoft says the strategy behind the move is obvious: leveraging Comcast's existing cable infrastructure, Microsoft would like to provide high-bandwidth Internet service to a large customer base. But as with any Microsoft acquisition, the speculation goes beyond that. Some see the Comcast investment and WebTV acquisition as part of a bid to create a whole new business, one that would deliver consumer oriented content like home shopping to WebTV users, bypassing the home shopping channels already in place. Others see this as a war of the user interfaces, with Microsoft helping to ensure that a version of Windows, perhaps a Windows CE variant, will become the de facto standard for television-based Web surfing.
Meanwhile, last May, Oracle took steps to acquire Netscape's Navio Communications, whose mission is to move the Netscape Navigator browser to other platforms--and merge it with NCI. The move was made to challenge WebTV with what Ellison claimed was a more open standard. (Ellison has dubbed WebTV "Microsoft PayTV")
And in truth, Microsoft itself may not quite know where all of this is headed. A few years ago, for example, Microsoft's Microsoft Network was in a heated race with America Online and CompuServe to capture an audience for its proprietary online network. Now, CompuServe is for sale by its owner, H&R Block, and rumors has it that Microsoft may move away from generic Internet services, and toward providing content--as it has with its alliance with NBC to produce the all-news cable channel, MSNBC. So in the age of the Internet, the computer business continues to move at speeds that thwart everyone's guesses--including Bill Gates'. If you've got money to invest--and Microsoft has plenty--all you can do is put the company in the best possible position for growth, then hold on tight.
Sidebar: Does NC Mean "Not Compatible?" Gates speaks, Sun counters
Bill Gates has been anything but shy in expressing his disdain for the NC. In several question & answers sessions following speeches, as well as in his own column, Microsoft's chairman has gone been by turns dismissive and scathing about the challengerr to the PC. Here are two excerpts from remarks by Gates, and a response from Sun:
"What is the Network Computer? Well, some days it has a disk, some days it doesn't. The one from Sun is completely different in terms of resources and user interface, than the one from Oracle, which is completely different than the one from IBM. And so, NC means Not Compatible. And there's nothing wrong with starting with a non-compatible approach. But it's only defining characteristic is that it does not run PC software. Now, how would you go about doing something like that? Well, one approach is, you could say, let's run the software up on the server. After all, Sun and Oracle have made money with fairly low volume and high prices. Sun in the case of selling server hardware, Oracle in the case of selling overpriced databases. And so you want people to do things against the server. That old mainframe time-share model is a very good model.
"So you try and move the computing back to the center. It's very tough to do because people are used to portable computers. They're used to picking lots of applications. They're used to the responsiveness and empowerment that comes with a PC. But attacking the PC is not an easy thing. It used to be there were 40 companies that hated the PC, and then there were 30, 20, 10, now there's two. And these guys have always hated the PC, and it's Sun and Oracle. --Bill Gates' remarks at the Kellogg Technology Series Presentation, April 29, 1997
The network computer is not a well-defined term because the vendors planning to release "NCs" have divergent visions, but the proposed architectures have two things in common.
First, NCs require an expensive server at the center of the network. This approach is a throwback to the days of the mainframe, when computing power was under central control and hardware manufacturers charged premium prices for the software that ran on their centralized machines.
Second, NCs are not compatible with PCs – or even with rival NCs. To use a network computer you have to rewrite your applications, learn a new user interface, and build a whole new network structure around those. I claim that NC stands for "Not Compatible."
Without a doubt, the complexity of using and maintaining computers is greater than it needs to be. Each PC on a corporate network requires individual attention, and support personnel too often have to go to a specific computer to solve even a simple problem. The NC promises to let an entire network be administered centrally. This presents an interesting challenge for PC hardware and software makers. Can the PC offer central administration, while preserving compatibility with today's hardware and software and allowing users the advantages of desktop computing power?
The answer is yes, as will soon become clear. Before long we'll make it so that every new PC on a network is set up automatically. If you log into somebody else's computer, your information will be displayed. Software will be upgraded automatically. Managing a network will be dramatically simpler.
History is proof of how thoroughly even tough problems can be solved. A few years ago, the issue bedeviling computer users was printing. It was hard to get computers to print. When they did print, the fonts might not be right. It was a headache! Today people hardly ever have to think about printing. They just do it. A few years from now, people will hardly ever have to think about updating their software or configuring a set of networked PCs. They'll just do it. --From Bill Gates New York Times Syndicate column, June 4, 1997: (based on remarks to a gathering of CEOs in Seattle)
And a reply from Sun....
- People often criticize what they can't see, and Microsoft Corp. has done a pretty nice job of blindly hacking away at Network Computers (NCs). Little surprise. Two years ago, Microsoft overlooked the Internet, then tried to recast itself as the Internet company. Last year, the Redmond company missed the fact that the industry was tired of struggling with the rising total cost of ownership for PC networks. Now, after belittling that concept, Microsoft is preaching the gospel of zero administration, even buying a company that makes thin clients to imitate the model.
So what's the latest? Microsoft Chairman Bill Gates says in published reports that the only thing NCs have in common with one another is that they are "not compatible" with existing PCs, and there is no market for them.
Sorry, Mr. Gates. Wrong again.
As Microsoft knows, it's the software platform that defines compatibility. And true NCs have one very important thing in common: the 100% Pure Java software platform. This is part of the NC Reference Profile, which Sun Microsystems and the other major NC players endorse, and it will remain that way.
The central reason Java became part of the profile is its "Write Once, Run Anywhere," cross-platform nature. Obviously, there are forces at work that feel threatened and would like to change that by making Java just another proprietary technology. But the industry is saying it does not want that; it wants heterogeneous environments where applications and data can be shared across platforms consisting of PCs, Macs, UNIX workstations, 3270 terminals and NCs. That's why Java is central to the NC Reference spec - it further enhances compatibility within the NC industry. But Microsoft says Java-enabled NCs can't run Windows apps. In fact, they can do that and more. Sun's own JavaStation NC can access the Windows environment using remote windowing software from Insignia and Citrix. Microsoft knows this since it's also licensing Citrix technology. What Microsoft executives may not realize is that JavaStation can also access mainframe apps through technology from OpenConnect Systems, and it can access UNIX through technology from GraphOn.
Now when was the last time a PC offered that level of compatibility with other computing devices? The industry knows better. The last time we checked, Win95 apps weren't necessarily compatible with Windows NT, Windows NT apps wouldn't run on Windows 3.
In fact, it looks as if Microsoft has prior claim to the "not compatible" trademark. In a recent study, a major industry analyst firm pointed out that Microsoft has historically shown a lack of understanding of the realities of corporate PC management, saying that perhaps it's because the company lacks the background itself to appreciate the value of centralized solutions.
Indeed, that's why companies like Sun are leading the way to this new computing paradigm and why they see a market now that Microsoft won't recognize for another year or so. Sun's NC customers have been asking for compatibility and an alternative to the high cost of owning PC networks for some time now. Maybe Microsoft's customers aren't talking to Mr. Gates. --Reprinted with permission, Sun Microsystems, Inc. ©c. 1997.