Oracle Corp. and subsidiary Network Computer Inc.Redwood Shores, Calif.

In October 1995 Oracle Corp. CEO Larry Ellison stood before a Paris crowd and told them about an upcoming $500 device that would replace PCs around the globe and open entirely untapped markets to computing. He was branded a heretic. Little more than a year later, the technology he trumpeted is a legitimate market phenom-enon. Network computing -- an open-standards platform in which an appliance for network communication and computing supports Web browsing, e-mail, data and word processing, and graphics -- is for real. Unlike the PC paradigm in which software is at the desktop, the network computer downloads software as needed from the Internet or corporate network and moves the complexity of the appliance to the network and network server. Oracle and allies say NC advantages are much-reduced total cost of computer ownership (unit, software, and upkeep costs) and an end to ever-growing PC complexity. Even Microsoft, the don of PCdom, is now pushing its own version of an NC (a registered Oracle trademark). "They basically validated the whole strategy," says Bonnie Crater, VP of strategic marketing for Network Computer Inc. (NCI), Oracle's wholly owned subsidiary. "Previously they called us a liar and really pooh-poohed the whole notion." The potential mother of network-computing markets is corporate intranets. "There's enormous concern in MIS depart- ments about the number of administrators they have to hire to run around and fix everybody's PC," says Crater. Some studies show annual corporate cost of PC ownership as high as $10,000 per unit. "So they're looking for solutions that will keep their costs low and also provide users the same or better kind of functionality they're used to getting, and we think we have that with the network computer." Additionally, NCs, says Crater, will allow the 70% of U.S. households that don't currently own a computer a cheaper, less-complex entry. She sees a third market being schools, where costs often differentiate future techies from the computer illiterate. In May Oracle, along with IBM Corp., Sun Microsystems Inc., Netscape Communications, and Apple Computer Inc., agreed upon a series of open Internet standards (i.e., HTML, TCP/IP, Java) for establishing the network computer as a client device and agreed to build to those standards. Oracle's NCI, formed in August, is licensing reference designs to NC developers. Crater says seven manufacturers (and more to come) are building appliances to these designs. In 1997 RCA will market a $300 NC set-top box for the TV. Oracle's financial and technology stake goes well beyond the manufacturing licenses to marketing software and support services for network computing, also through NCI. Oracle's "core competency has been in the past, and continues to be, the ability to produce very robust, mission-critical server technology," says Crater. "We're extending that capability to the whole network-computing realm to build NC servers that will provide that information for the client." Oracle's NC markets also include a database repository, a suite of Web-enabled development tools, its Designer product that allows customers with client-server applications to automatically regenerate them to Web-based applications, a suite of financial and manufacturing applications that are Web-enabled, and in first-quarter 1997 a suite of Java-based personal productivity tools -- word processing, spreadsheets, and graphic presentation -- for NCs. "There are estimates of 200 [million] to 500 million new devices to be sold by the year 2000," says Crater. "If you think about it, only 5% of the world has PCs today, so there's 95% that doesn't. If you can provide a device that's really, really low-cost, the whole market grows."