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Microsoft Corp.

The Network Computer's Decline: A Shift in the Computer Industry

Strategic Insights

— 1 min read

The network computer, touted as a revolutionary concept in the mid-1990s, has failed to gain traction in the market. Initially, Federal Express Corp. was at the forefront of adopting the network computer, but now the company has opted for conventional PCs and Windows-based terminals to replace up to 30,000 of its aging terminals. This shift is a significant blow to the network computer's proponents, including Sun Microsystems Inc., Oracle Corp., and International Business Machines Corp., who had hoped that the combination of the network computer, the Internet, and Java would break the Windows-Intel duopoly's grip on the computer industry's profits.

Key Takeaways:

  • Federal Express Corp. has abandoned the network computer and will use conventional PCs and Windows-based terminals to replace up to 30,000 of its aging terminals.
  • Sun Microsystems Inc. and other network computer proponents had hoped that the NC would break the Windows-Intel duopoly's grip on the computer industry's profits.
  • The prices of conventional PCs have fallen unexpectedly, reducing the network computer's up-front price advantage.
  • Citrix Corp.'s software, based on Microsoft's Windows NT operating system, has allowed customers to use terminals costing as low as $350, further squeezing the network computer's market.
  • Other stars of the network computer road show, such as First Union Corp. and CSX Corp., have also abandoned the NC.

Statistics:

  • Nearly 75% of thin desktop devices by the year 2002 will be Windows-based terminals (International Data Corp.).
  • Federal Express Corp. plans to replace up to 30,000 terminals with conventional PCs and Windows-based terminals.
  • The prices of conventional PCs have fallen to less than $1,000, reducing the network computer's up-front price advantage.
  • Citrix Corp.'s software can be used to operate terminals with a price tag as low as $350.
  • Sun's JavaStation lists at $699 but doesn't include a monitor.

Sources:

  • The Wall Street Journal
  • Sun Microsystems Inc.
  • Federal Express Corp.
  • Oracle Corp.
  • International Business Machines Corp.
  • International Data Corp.
  • Citrix Corp.
  • Boundless Technologies Inc.

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