Thin clients hungry for XP

Wyse Technology, the top manufacturer of stripped-down computers known as "thin clients," is launching a terminal that will run the embedded version of Windows XP.

Despite the fact that the new Winterm includes 128MB of RAM and 96MB of flash memory, the new machine still counts as a thin client rather than a full-fledged desktop PCs, the company said, and will be promoted as a smaller, more secure and more tightly controlled alternative to conventional Windows XP desktops.

"Put your server in the data center, not on the desktop," said Stephen Yeo, marketing director for Europe, Middle East and Africa (EMEA) for San Jose, Calif.-based Wyse. "We are getting to the stage where people have to put something on their desk that would have been a server three years ago."

A total of 3.5 million thin clients will be sold in EMEA in 2005, according to predictions made by research firm IDC in June.

The Winterm will be sold not so much based on price but on reducing the total cost of ownership and putting the IT manager in control. This is very much the model proposed by thin-client makers in the late 1990s, when Oracle CEO Larry Ellison predicted that Java-based clients could replace Windows.

Yeo acknowledges the thin client so far has fallen considerably short of Ellison's expectations. "We've been doubling sales every 18 months," he said. "However, when you start from zero, it takes a long while. We are approaching 1 percent of desktops now."

But the thin-client lobby has moved away from the Java clients proposed six years ago, toward a closer relationship with Microsoft. "We are Microsoft's partner of the year," Yeo said.

He proposed that IT managers have three choices--stay with existing "fat" desktops, most of which are essentially unmanaged; upgrade to Windows XP, which improves desktop management; or move to thin clients. The first option is the most expensive, he said, while upgrading to managed desktops cuts costs somewhat.

Thin clients with embedded XP will typically pay for themselves in three to eight months, according to Gartner research quoted by Yeo.

However, even this figure might not convince IT managers, said Tony Locke, desktop analyst at Bloor Research. A return on investment "less than one year ought to be a no-brainer. But unfortunately, there is a lot of emotion tied up with this."

Wyse's Winterm 8235LE costs $609 for the model that will support embedded XP, which Microsoft is due to launch Nov. 28.

Staff writer Peter Judge reported from London.