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Telcos said testing plan to offer PCs to businesses

Call it the second coming of the network computer, if you like, but major telecommunications companies have set up pilot outsourcing programs where they would supply access to virtual computers.

Telecommunications providers on four continents are testing a plan to provide so-called virtual desktop computing to their business customers.

People familiar with the outlines of the pilot program say the idea is to offer Internet access to companies via dumb terminals connected through the so-called cloud. The tests are said to involve companies in the United States, Europe, Australia, and China.

The testing period is slated to run through the middle of the year. If it works out to participants' satisfaction, the pitch to customers will be why it makes more sense in an economic recession to outsource their computing infrastructure to the telcos, according to the sources. The hope is that more companies now have an extra incentive to turn over the costs and complexity to outsiders. Any savings they realize could thus get redirected for more valuable purposes.

Although details of the plan are said to vary according to the provider, the basic idea would be to build a system where a user's login information would be recognized on a terminal, essentially creating a virtual desktop that could be accessed anywhere within the network.

In a way, it's a reprise of the late '90s idea of a thin client hawked unsuccessfully by Oracle's Larry Ellison and Scott McNealy of Sun Microsystems. More than a decade later, broadband is faster and less expensive and the concomitant growing interest in cloud computing may convince more companies to give this a serious look.

But however interesting the idea, it still faces obstacles, not the least being concerns over the management of network security. At the same time, corporate inertia is a fact of life as companies often like to do the same thing because, well, that's the way they've been doing it.

There's an even earlier, though inexact, precedent. The breakup of Ma Bell in 1984 spawned seven regional bell operating systems. Some of them, like Nynex and Pacific Telesis, for a time operated retail outlets that sold personal computers. Of course, this was back in the early development of telephony and management wanted to convince serious numbers of customers to buy bundled offers of computer and telecommunications services. It didn't work out that way and the experiment was subsequently abandoned after a few years.

Faced with stepped-up margin pressures on their traditional businesses, however, the telcos do have an incentive to push into new businesses. Indeed, AT&T already offers Netbooks to some customers for $50 if they sign up for an Internet service plan.

"The bottom line is that telcos have commoditized bits on their pipes, so there is no customer loyalty and very little value-add," said a person involved in the testing. "What this does is offer a viable option that would let everyone one a PC and have access from anywhere."