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Intel, Microsoft plan "thin" server thrust

The companies say the relatively low cost server appliances will be aimed at small businesses and will be easier to set up than regular computers.

Intel and Microsoft are joining forces once again, this time in the emerging market for low-cost "thin" server appliances.

Intel and Microsoft said the devices, which analysts estimate would be priced between $1,500 and $2,000, would be aimed at small businesses needing file, print, and secure Internet content sharing.

The companies are aiming to make the devices "highly reliable" and easier to set up than regular servers in an effort to drive sales in a market that could reach $2.6 billion by 2003, according to market researcher Dataquest.

Reliability and ease of use are critical in selling "thin servers," so named because they generally serve a single function, to small businesses, defined as those who employ 100 or fewer people. These companies often lack support for their systems.

So while many small offices with multiple PCs would benefit from email and file sharing, fewer than 30 percent have done so because of the cost and complexity of installing a traditional PC server, according to a report from International Data Corporation.

Microsoft said the "thin servers" will use the embedded version of Windows NT 4.0 along with Intel processors. A Web browser would serve as the interface to system management software and other applications instead of the ubiquitous Windows desktop.

The companies said that products based on these technologies are expected to be available from original equipment manufacturers (OEMs) in the second half of 1999. Industry analysts estimate the devices aren't likely to appear on the market until late 1999 or early 2000, however.

These servers will be marketed as appliances, because of their emphasis on ease of set-up and maintenance, according to Dataquest senior analyst James Staten. Generally, the server will come in a sealed-case design, implying that it is designed as a plug-and-play device, analogous to consumer appliances.

Included in this category is Whistle Communications' toaster-size device that is based on the Unix operating system and provides email, Web browsing, and Web publishing features for under $2,000. Compaq entered into the market last week with its $1,399 Windows-based "Neoserver."

The low cost of these devices presents a challenge for Microsoft and Intel.

"Microsoft has to figure out how to compete with Linux without blowing up their main revenue generator [Windows]," said Staten. The only way to address the server appliance market is to use a stripped down version of Windows, he said. While Microsoft can't offer the operating system for free, like the Unix and Linux operating systems used by other appliance vendors, the company can sell developers and customers on the availability of Windows applications that are more easily re-written for the embedded market, Staten noted.

Generally, these devices use older processor technology, which raises questions about Intel's desire to jump whole-hog into this market. Compaq doesn't even list the processor type for its Neoserver, and most other server appliances use older Pentium processors. Staten suspects that Intel would like to target its Celeron line of processors at this market.

Related, but different, thin servers
The new "thin server appliances" should not be confused with thin servers, which are a different class of single-function servers, targeted at industrial-strength applications such as Web hosting and telecommunications applications. Internet service providers or the information technology departments of large companies are the primary users of such servers.

Intel is working with companies such as Dell, Hewlett-Packard, Novell, and Oracle for that market, which will represent the largest portion of a $16 billion market by 2002, Dataquest said.

Intel has formed the Server Appliance Design Guide to hammer out uses for thin servers that don't use Windows. Intel is hoping to come up with a set of hardware and software guidelines so corporations can standardize their equipment.

Other similar efforts include Oracle's "Raw Iron" effort, which is an attempt to create a new market for database server appliances that can lower overall operating costs and simplify administration. The plan is also intended to blunt Microsoft's push into the enterprise software market.

Although the Raw Iron server appliances contain parts of Sun Microsystems' Solaris operating system, they will not need a separate operating system, which will further reduce management costs in comparison to Windows NT machines, Oracle has claimed.