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Grove soft on NCs, Net PCs

Intel CEO Andy Grove says he'd be surprised to see so-called sealed-case systems take off. Intel and others created the Net PC standard.

Network Computers (NCs) and Net PCs may have their cheerleaders, but Andy Grove doesn't seem to be one of them.

The Intel (INTC) chief executive officer told reporters at a Gartner Group conference in San Francisco that he would be surprised to see these stripped-down PCs take off in any significant way. Intel, Microsoft, Compaq, and other major PC companies created the Net PC standard.

The Net PC is essentially a bare-bones personal computer which, in theory at least, is tied more closely than a standard corporate PC to a centrally-managed server computer.

"Would I be surprised to see this as a major market phenomenon? I would be surprised to see that," Grove said. "If I was a consultant, I would recommend everyone to go for managed PCs, but not everyone would go for my recommendation."

A managed PC, he said, gives the corporate user the ability to centrally upgrade and control fleets of desktops--one of the key, original selling points of NCs and Net PCs--without the disadvantages that come with these sealed-case systems.

With managed PCs computer makers will be able to offer "all of the characteristics of a NC or a Net PC or waive it at will," he said.

Managed PCs are essentially ordinary desktop PCs that utilize software which conforms to a collection of manageability standards propounded and developed by Intel and others. One of the principal technologies is the Desktop Management Interface, which allows centrally located information system administrators to monitor desktop PCs.

The chief disadvantages of the NCs or NetPCs lay in their inflexibility. Most NC designs do not store applications or data, meaning that a user has to remain connected to use them. NetPCs can store applications locally, but do not allow users to load software at their desk. With both products, the interior of the machine is sealed off.

"The Net PC has the same management technology that managed PCs have. The difference between them is that the user's ability to load software on NetPCs is gone. The Net PC is a halfway solution [between NCs and managed PCs]," Grove explained.

Compaq, which announced its first Net PC this week, made it very clear that its product is targeted at the relatively small NC market : the same market many of the older mainframe-based "dumb terminal" devices have been sold to, which includes banks, hospitals, airlines, customer support centers, and insurance companies. Dumb terminals are typically used as simple data entry devices.

Grove also said that lower price would not likely be a driving attraction for Net PCs or NC either. Mostly, corporate customers will hinge their decision on how much control they want to give their employees.

Still, Grove said that success remains a possibility for these devices. If customer demand changes, significant segments may desire these boxes. Besides, even if NetPCs and NCs only account for a small percentage of the market, that could mean millions of units, he added.

To this end, Intel will continue to work with the companies designing NCs and NetPCs.

"For us to allow a schism to develop between managed, full-function PCs and less-functional NetPCs would be wrong," he said.

Both the NC and the Net PC at least partially seem the victims of their own success. Conceived by Sun and Oracle, the NC was touted as a machine that could reduce corporate costs of ownership because it could be managed through a central server, said Scott Miller, an analyst with Dataquest. The Net PC was essentially born as an alternative based on Intel-Microsoft technology.

Since then, however, vendors have begun to incorporate the vital principle of the new hardware model--network manageability--into more flexible desktops, thereby diminishing the appeal of the hardware vehicle of the NC or Net PC.

"Manageability has taken care of most of the financial impact the NC would have had," Miller said. As for the Net PC, "It has always been stronger as a theoretical talking point. Net PCs will still be sold," Miller noted. "They are not going to dominate the market."

With the trump card of NCs and Net PCs now common, observers have said that these machines might find most interest as terminal replacements.

Still, as Eileen O'Brien, an analyst at International Data Corporation, pointed out, NCs or Net PCs hold distinct advantages over terminals: The interface is typically superior, security is improved, and users are or will be able to access standard applications.

"For the long term, it should be a good solution for some users," she said of NCs. "Anywhere that traditional terminals fit they should be able glide in." Education, she added, could prove to be another strong market.

Ironically, Miller added that most corporate information systems departments can't adapt "manageability" techniques yet anyway. "Over the next two to three years we will see tools that will make all this easier to implement." By then, sealed case systems may actually become popular.