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Grove, Gates gaga over NetPC

Intel and Microsoft announce a new platform for low-cost network PCs, opening up a new category of business corporate computers.

Intel (INTC) and Microsoft (MSFT) announced a new platform for low-cost network PCs, opening up a new category of business computers.

The so-called NetPC platform is targeted at "task-oriented users that do not require the flexibility and expandability of the traditional PC," the two companies stated.

"This is essentially a PC in a sealed-case hardware environment. It has a different configuration in terms of access and upgrade," an Intel spokesperson said, referring to the fact that these types of computers will not be like current PCs that can be expanded by taking off the cover and installing upgrades.

In conjunction with this, Microsoft has announced a "Zero Adminstration" intitative for Windows targeted at reducing the cost of PC administration at corporations. The Zero Administration technologies "will be fully implemented" in future versions of the Windows 95 and Windows NT Workstation operating systems, Microsoft said.

The NetPC platform materialized in response to pressure from other vendors proposing low-cost network computer intiatives. Those vendors include IBM, Oracle, and Sun Microsystems.

"We expect the initial price (of the NetPC) to be somewhat less but not dramatically less (than a traditional PC)...the major cost reduction is in total cost of ownership," said Pat Gelsinger, vice president and general manager at Intel.

The NetPC platform has won broad industry support from leading PC vendors, including Compaq Computer, Dell Computer, Digital Equipment, Gateway 2000, Hewlett-Packard, and Texas Instruments. Some, like HP, have already announced their intention to bring out products based on the platform.

Although potential pricing has not been announced, certain configurations are expected to cost below $1,000.

HP has pledged to deliver a NetPC solution in 1997 as part of its Vectra PC family, according to Jacques Clay, general manager in charge of worldwide commercial PC business. "The NetPC will provide customers with the best combination of simplicity, low cost of ownership, and high return on investment of any solution available for task-oriented computing," he said.

The NetPC specification calls for the following requirements, which stress low cost and ease-of-use:
--a Pentium processor, 100 MHz or greater;
--a 16MB minimum of system memory;
--buses and drivers compliant with current Plug and Play specification;
--minimal user interaction for installing and configuring devices;
--a lockable PC case;
--no end user expansion slots;
--support for an internal hard disk as a cache;
--external keyboard connection;
--external pointing device connection;
--VGA-compatible display adapter with a minimum 640-by-480-pixel resolution;
--support for one of the following network infrastructures: Ethernet, token ring, 28.8-kbps modems, ISDN, T1, or ATM (asynchronous transfer mode);
--device drivers and installation that meet the specifications of the Microsoft Windows and Windows NT operating systems;
--audio capabilities.

In tandem with this, Microsoft's Zero Administration intiative calls for cost-reducing technologies such as having the operating system update itself when the computer is booted, without user intervention. This includes going out and getting the "latest necessary code and drivers from a server, intranet or the Internet, if available...the Automatic Desktop feature will provide users with all available applications, installing them automatically when invoked," Microsoft said.

Other features include allowing "users to roam between PCs while maintaining full access to their data, applications, and customized environment." Also, client systems will be "controllable by a central administrator across the network," Microsoft said.

In addition, "full implementation of the Active Platform on Windows will offer the flexibility to deploy both Web-style 'thin client' applications and the full wealth of personal productivity and client-server applications," the company stated.

These functions will be built on Windows 95 and Windows NT Workstation operating systems, and will be fully implemented in upcomong versions, according to Microsoft.

Analysts believe that this is a market waiting to happen. "For PC vendors, large corporations are their traditional customers and this is one of the few areas where there is a clearly defined market for the [NetPC] to serve," said Dean McCarron, a principal at Mercury Research, a Scottsdale, Arizona-based marketing research firm.

NetPCs will work in corporations because most people are on local networks with relatively high-bandwidth connections to the server, McCarron added. The NetPC is predicated on the server doing the data processing for many tasks.

Although the NetPC revisits the mainframe era and its "dumb" terminals, McCarron said, there are some important distinctions.

"The dumb terminal was really dumb. This is smarter. The NC client will do some of the processing such as validating data in a server-based database application."

This may also be a boon for Intel. "You're going to need to have beefier servers [for the platform]," he noted, alluding to the fact that Intel will be providing the high-performance processors for these servers.