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Low-cost PCs spawn Windows alternatives

With inexpensive PCs and the Internet driving the market, small companies are proposing alternative operating systems that stand out by being what Microsoft products aren't: namely, cheap and easy to use.

With inexpensive PCs and the Internet driving the market, small companies are proposing alternative operating systems and software that stand out by being what Microsoft products aren't: namely, cheap and easy to use.

Two such firms, OnChannel and NewDeal, are offering software that shuns the Windows operating system and applications, while appealing to manufacturers and users looking for programs that run well on computers below $200 and older PCs not capable of running Windows efficiently. Ultimate success won't be easy, but the price certainly is right for now.

Upstart Linux technology is behind the push at OnChannel to get an operating system into low-cost TV set-top boxes and personal computers. OnChannel this month will begin shipping to PC makers a prototype of its OS 2000, which is based on Linux.

In addition to being considerably cheaper than Windows, OnChannel's system is more stable, said Daniel R. Nilsson, president of OnChannel.

"Basically, you turn it on and it works," Nilsson said. Users don't have to go through a lengthy start-up process like typical Windows PCs, he added.

Another reason for the appeal of Linux over Windows: "Linux has the highest growth of any OS right now," Nilsson said. The minimalist software will also allow customers to use any Linux applications that may emerge, such as new versions of Corel's office suite, he said.

This also sets it apart from inexpensive devices with so-called embedded operating systems, which are easy to use but typically don't allow a consumer to add software.

OnChannel's announcement follows an agreement announced yesterday that sets up Linux to compete with Windows in the consumer marketplace. In that deal, Ebiz Enterprises and its Linux Store unit have released what they call the Pia, a $199 Net device that will be marketed through Internet service providers. Prodigy, one of the Internet's oldest service providers, has already signed up to promote the device.

As with OnChannel's Nilsson, Prodigy sees Linux as a highly efficient, inexpensive way to power cheap Internet devices.

Linux, an open-source technology that is making serious inroads in the computing market, allows for easier development and offers significant cost savings to hardware makers. Windows 98 can cost small PC manufacturers close to $80 per machine, according to various sources, making it one of the more expensive elements of a computer. Linux, by contrast, can be had for free.

Although OnChannel is by no means guaranteed success, there are some positive signs for such operating systems.

"The price of every single component of a PC has come down, except the operating system," said Shelly Ohava, an analyst at International Data Corporation, adding that Windows can become a barrier to offering a low-cost PC. "But with Linux, the cost is minimal and can drive the cost [of PCs] below $300. I don't think Microsoft is really targeting this space now anyway."

Nilsson said his product appeals to some PC makers because the market potential is so great. He cites a projected market size of more than 50 million Net appliances market emerging over the next few years.

Saving the dinosaurs
Meanwhile, NewDeal, a company founded by Clive Smith, a former senior executive at Geoworks, is going back in time. It is offering new versions of its software suite for older PCs, computers that have been rendered obsolete by what it calls "bloated" Windows software.

Geoworks was a company that a decade ago competed with Windows 3.0 for the operating system crown. At that time, Geoworks was given high marks as a fast and efficient system that used a modest amount of the PC's hardware resources compared to Windows.

NewDeal offers a set of communications, productivity, and school curriculum software that can run on any PC--even ancient computers based on the Intel 286 processor, popular in the mid-1980s. NewDeal also develops Internet services and products specifically optimized for access by all PCs.

The company claims that its software suites are the "only integrated point-and-click application suites--with word processor, spreadsheet, database, and Internet browser--able to run effectively on the tens of millions of computers left behind by today's bloated software."

NewDeal says its markets are the educational, home-office, and non-profit sectors in North America and Western Europe, where there are many millions of working older computers that can be easily upgraded through "smart" software.

"There are an estimated 80 million 286/386/486-based PCs worldwide that are fully functional, yet unable to meet the excessive processor, storage, and memory requirements of the latest software used in major corporations. There are over 50 million legacy computers in North America alone, and over 7 million PCs are retired annually by U.S corporations and governments," NewDeal said.