It took almost a decade, but the era of the so-called "thin-client computer" ballyhooed by Oracle Corp. chairman Larry Ellison back in 1996 is finally coming to pass. The concept was that a stripped-down machine could serve almost as a telephone to tap into a company's computer applications and data over a central network.
Fast forward to 2005, and voila! Thin-client manufacturers such as Neoware Systems Inc., Sun Microsystems and Hewlett-Packard Co., among others, report unit sales increases of more than 20% annually. This year thin-client machines are expected to represent 5.4% of all PCs sold to large and mid-size companies, rising to about 10% by 2008, according to estimates from International Data Corp., an IT market research firm in Framingham, Mass.
"The interest and demand for thin-client machines has really skyrocketed in the last 18 months," says Tad Bodeman, director of thin-client solutions at Hewlett Packard's Houston campus. HP itself currently is deploying its t5000 series thin-client machines to 1,200 employees at four manufacturing sites.
"What's driving companies to move to thin-client computing are security issues and cost savings," says Michael Kantrowitz, CEO of Neoware. One of the leading manufacturers of thin-client computers and software, the King of Prussia, Pa.-firm saw an increase in sales of 34% in the latest quarter and reported record profits, with unit sales up 70%. "These machines are immune from typical viruses that plague PCs because their applications are managed centrally," Kantrowitz adds.
Manufacturers certainly are taking advantage of the shift. "Manufacturers are realizing that whether it's in the office or on the factory floor, it's far easier to manage a few servers than hundreds of PCs," says Mason Uyeda, product manager at Sun Microsystems in Mountain View, Calif., which is experiencing 30% annual growth in unit sales of its Sun Ray devices.
Keystone Automotive, a remanufacturer and distributor of wheels, bumpers and other parts used by body shops throughout North America, standardized on thin-client machines from Neoware three years ago. Keystone operates a fleet of more than 2,000 thin-clients that workers at its 130 warehouse locations use to tap into the company's recently installed enterprise resource planning (ERP) system, which runs on servers at the main office in Pomona, Calif.
"We knew if we deployed PCs for our ERP system, we would run into maintenance issues with each individual PC," says Jesus Arriaga, vice president and CIO. "Trying to maintain 2,000 PCs across the U.S. is a major undertaking. Now our overall maintenance is pretty much gone. We had viruses before with PCs, and now our security is several notches up." He figures the company saved about $1.5 million on the ERP installation by not having to purchase a fleet of PCs. Keystone reaped an additional $700,000 in cost savings, Arriaga estimates, due to lower maintenance and personnel expense associated with the simpler machines.
While the average PC purchased for business costs around $800, thin-client machines can be purchased for less than $200 per unit. With thin-client computers, in fact, less is usually more. With no hard drive, no floppies and no CD-ROM player, not even the super-geek on the company payroll could download a single musical note from the Web, let alone chew up hours on a live chat or play computer games. Similarly, there are no disks containing company secrets for someone to take home at the end of the day.
"Having thin-client machines turns the desktop into a work environment instead of a playground," says Gordon Olson, IT director at Refrigeration Supplies Distributor. The Lake Forest, Calif., distributor and manufacturer of commercial refrigeration parts and control panels has about 500 employees at 62 warehouses using Neoware machines. "There's nothing they can change on a thin client," Olson adds. "They can get e-mail and get on the Internet, but it all goes through our servers. We control everything."
Lacking the moving parts of a PC that tend to fail, thin clients have a longer expected service life. While PCs often run for several years, they require regular feeding and care and eventually break down. Thin-client machines require almost no care. And CIOs appreciate not having to worry about employees loading maverick software programs or otherwise corrupting the machines.
Most thin-client machines typically look and behave like a PC running Windows, including the point-and-click interface. They display all the same applications that run on PCs. The difference is that users are simply viewing an application that's being run at a central location and piped to their machine.
Thin-client machines also are well suited for the plant environment. For instance, they merely flinch when hit by power drops or surges. "If the power drops beyond their tolerance level, there's no long reboot process as with a PC, you just push a button and you're back online," says Bodeman of HP. "And their power consumption is so low, companies can drive batches of them with backup battery power, keeping systems accessible all the time to their employees."
Keystone's Arriaga also found a way to adapt the Neoware thin clients as time stations for employees to punch in and out. "The wall clocks we were using are expensive, costing $3,000 to $5,000 each," he says. "We were able to create kiosk-based time stations with Neoware machines for employees to use to clock in and out using a Web interface."