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Wyse Technology changes course with acquisition

The top manufacturer of stripped-down computers known as "thin clients" has acquired Netier Technologies, which will dramatically change its business plan, the company will announce Monday.

Wyse Technology, the top manufacturer of stripped-down computers known as "thin clients," has acquired Netier Technologies and will dramatically change its business plan as a result, the company will announce Monday.

The acquisition gives Wyse software that will allow its customers to manage their thin clients and ultimately their desktop computers, cell phones, handheld computers, Internet appliances and other devices, Wyse chief executive John Stinger said in an interview. The move gives Wyse a stronger future, given the fact that managing computing devices is getting harder to do than building them, he said.

Specifically, Netier has software called Rappor that will allow companies to remotely install software, upgrade software, configure devices or diagnose problems with the device. For example, it could enable a cell phone to change its features if its owner were switching from one phone service plan to another.

The move also eliminates a competing thin client manufacturer.

Stringer declined to discuss terms of the acquisition, though he said it's complete and has received all necessary regulatory approval. Netier, with fewer than 75 employees, will stay in its Carrollton, Texas, location and will continue to be managed by the same executives.

The change in business model is dramatic for Wyse, which for years made terminals that hooked to mainframes. The company added thin clients into its product mix as corporations adopted new computing systems, and top-tier computer makers such as Compaq and Hewlett-Packard sell Wyse's machines under their own labels.

While Wyse does a healthy business, the company hasn't been able to persuade most companies that the simplicity of thin clients outweighs the power and software options of more expensive desktop computers. Despite the ideological support of powerful companies such as Sun Microsystems and Oracle, both of which favor letting centralized servers handle the heavy lifting, customers have voted with their dollars for PCs.

And with the arrival of Internet appliances and other comparatively inexpensive devices, Wyse's existing business was threatened, Stringer said. With National Semiconductor and others growing steadily closer to putting an entire computer on a single chip, "the barriers to getting into the hardware manufacturing business are getting lower over time," Stringer said.

Instead of fighting the impending arrival of new computing devices, Wyse chose to embrace it. The arrival of other devices means companies will be installing and maintaining hundreds of thousands of devices, and they'll need help.

Within the next year, about 20 percent of Wyse's revenue will be from software, Stringer predicted.

Netier's Rapport software runs on a server that communicates with a Rapport software agent on the device, he said. The agent can communicate with the device, notifying it of changes such as an imminent software update.

The software will first be available for Wyse's thin clients, including those using Windows NT, Windows CE and Linux, Stringer said. Later, the company will add support for PCs as well.

However, the company will likely run into competition from others. Red Hat, the top Linux seller, has launched its Red Hat Network to lure customers who want to maintain their Internet devices or computers. And Microsoft plans to sell subscription services that automatically update its software as well.

For his part, Stringer believes that the field is still largely open. "Nobody has staked out the device management space," he said.

Having the software gives Wyse further offerings that interest business partners such as Compaq, he said.