Thin Clients Gain Ground, But Windows Remains Dominant

Strategic Insights -

The network computer, touted as a threat to Intel and Microsoft, is struggling to live up to its promise, according to a report by Zona Research Inc. Instead of replacing traditional personal computers, thin clients are increasingly being used as a way to run Windows programs remotely. Analysts predict that thin clients will continue to grow in popularity, but the market is expected to be dominated by Windows-based systems.

Key Takeaways:

  • Sales of thin clients grew by 34.7% in 1997 to 347,917 units, with factory revenues reaching $350 million.
  • Almost half of these systems (48.4%) were designed to run Windows applications using Citrix's ICA software.
  • Java-capable thin clients took only 17% of the market, while browser-enabled thin clients managed 26.2%.
  • Microsoft has licensed Citrix's technology and promotes ICA as a way of enabling non-Windows computers to run Windows applications remotely.
  • Microsoft is also preparing to launch its own version of ICA, codenamed Hydra, for use with Windows-based PCs.
  • Several suppliers of thin-client computers will support Hydra by launching Windows-based terminals (WBTs) - thin clients that run Microsoft's Windows CE operating system.
  • The largest thin client manufacturer, Network Computing Devices (NCD), plans to launch a WBT called ThinStar.
  • NCD has agreed to develop a 'reference platform design' for a thin client based on Pentium processors, while Intel has bought a $10 million shareholding in NCD.

Statistics:

  • 347,917 thin client units sold in 1997 (growth of 34.7% from 1996).
  • $350 million in factory revenues for thin clients in 1997.
  • 48.4% of thin clients designed to run Windows applications using Citrix's ICA software.
  • 17% of the market taken by Java-capable thin clients.
  • 26.2% of the market taken by browser-enabled thin clients.
  • $10 million investment by Intel in NCD.

Sources:

  • "The Thin-Client Market: 1998 and Beyond" (Zona Research Inc, 1998)
  • "ThinStar" (Network Computing Devices, 1998)
  • "Intel and NCD Agreement" (Network Computing Devices, March 1998)
  • "Microsoft Licenses ICA Technology" (Microsoft, 1997)