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When worlds collide: PC meets mainframe

ClearCube's centralized-PC technology to ease system management is attracting investors, customers--and competitors.

A start-up's efforts to take a step forward with PCs will entail taking a partial step backward as well.

Austin, Texas-based ClearCube Technology has been promoting the idea of a networked PC for nearly three years, but the company's PCs may be nothing like what you've seen before, and investors are beginning to realize their value. The company announced its third round of funding on Monday, which in addition to the previous rounds brings the total to $32 million.

ClearCube's PCs are designed to mount in a rack where IT professionals can more easily manage them, while still giving clients a familiar Windows interface on their local display. ClearCube's technology is as close as you can come to combining the local computing capabilities of a PC and the easy manageability of a mainframe system.

"The basic pitch here is that ClearCube's offering is more manageable," IDC analyst Roger Kay said. "And their solution isn't a big stretch for enterprise buyers."

Still, Kay added, ClearCube's products will be limited to niche markets, such as financial institutions.

Because the PCs are centrally located, IT managers can fix problems faster and more efficiently, which translates to a quicker response time from support personnel and less down time for employees. Upgrading memory in ClearCube's systems can take about 30 minutes. In comparison, updating a division full of traditional PCs could take a week or more.

"The network is easier to manage and maintain because everything is in one spot," said Chief Executive Mike Frost.

These potential benefits are catching on with investors and customers, and competitors are taking note. The company announced on Monday that it has raised $20 million in its third round of funding, and it has signed agreements with hotel and resort company Starwood Resorts and investment bank Credit Suisse First Boston. The government is also a likely target, according to Frost.

On the competitive front, PC giant IBM has announced a similar product in the form of its Intellistation R Pro workstation.

With both products, a cable runs from a rack-mounted PC to a small black box that resides on a client's desktop where a monitor, keyboard, mouse and storage devices, such as a CD-ROM or floppy drive, can be attached. The racks can hold multiple PCs. ClearCube racks can hold up to 96 PCs, a configuration that would cost $120,000.

The company also announced on Monday a new USB technology and an enhancement to its remote-management capabilities. In the case of a failure, managers will be able to reroute clients remotely from one PC to another. The USB technology will allow USB devices to be connected to a PC via the hub that sits on the desktop.

IBM has yet to release details on its Intellistation R Pro workstation, but the company plans to release a product in mid-April. The PCs will come in a dual-processor configuration.

However, Kay said, IBM may be just dipping its toe into this market.

Gartner analysts Bill Gassman and Mark Margevicius say despite the optimism of companies such as ClearCube Technology, remote PCs will likely not become the mainstream approach to managing enterprise desktops.

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"Whenever IBM enters your market, there's reason for concern," Kay said. "But they're really playing the straw man, trying to cover themselves in case this market turns into something big."

Ken Knotts, ClearCube director of marketing, said that the entry of IBM into the market only validates the category. Knotts said ClearCube holds 10 patents, including a business methodology patent that covers the concept of the remote desktop, and 10 more in process. The company has held the patents for about two years.

"We're looking into whether they are using the same technology, but at this point we're not sure if they are infringing. We haven't spoken with them," Knotts said.

IBM representatives said they have not heard from ClearCube.

Staff writer John Spooner contributed to this report.