The PC has evolved significantly since its common acceptance into the business world during the early 1980's as a clunky box with green text on a black background. The PCs of the early 1980's ran the MS-DOS operating system in a 640 kilobyte RAM environment utilizing magnetic media such as direct access storage devices that usually did not exceed 10 megabytes of storage. In comparison, the PCs of the 1990's standardly have anywhere from 8 to 16 megabytes of RAM and hard disk storage requirements of multiple gigabytes. The increased memory and storage requirements came as a result of increasing demand for system resources to run increasingly complex software. For the purposes of this paper, the PC is defined as a computer running the Microsoft Windows '95 operating system.
As machine speed, size, capability, and power have increased, the systems management concerns for PCs have become unwieldy and, in the majority of cases, fall far outside the level of expertise that a personal home or business application user could provide. For example, many software applications require specific versions of operating system software, network software, or other supporting software to run smoothly, if at all. The installation, maintenance, and the acquisition of the correct version proves costly and cumbersome. As systems have become more complex, information technology spending on both hardware and software support is increasing at astronomical rates and corporate leaders are re-evaluating the return on their technology investments.
A highly viable solution for this dilemma is The Network Computer (NC). The NCTM is a cost effective means of accessing, storing, and managing information via the Internet, the World Wide Web or corporate intranets. Where it is estimated that management costs alone for each PC are up to $8,000 per year and the average purchase price is in the $3,500 range, the NC will cost between $500 and $1,500. The NC serves only as an access device to information, with an ability to store a very small amount of data locally. However, all applications software is maintained on a central server, where it is constantly updated to reflect the latest version. This centralized approach to system control is reminiscent of the old mainframe/terminal and client/server solutions but without the high price tags and complexity for the end users associated with those systems.
The market opportunity for the NC is extremely large. Even though many corporations are good candidates for the NC technology due to their existing access to Internet and Intranet connections, as well as their desire to maintain consistency among application releases, the potential in other markets is even greater. Specifically, given the low barrier to entry and the drastically reduced cost of ownership and operation (about 20% that of PCs) many markets limited by PC price points will now be opened up to information and computing technology. The markets most likely to undergo a drastic expansion are the education market, emerging countries, and home computing environments, all price sensitive markets. Because of its low price point and simplicity, it is predicted that the NC could attract a majority of those consumers who have not yet purchased a home PC. This untapped consumer market accounts for about 60% of U.S. consumers and 90% of global households.
The NC will be capable of delivering a consistent user interface across Internet appliances like the NCTV, the NC Telephone, the NC Workstation, and other compatible appliances. This means that an NC application may consist of someone leaving a voice mail message via the NC Telephone with it subsequently being retrieved by an NCTV user through a TV interface box.
The biggest obstacles the NC has to overcome are network bandwidth issues and the lack of support in the initial release of the NC for many applications. However, as Internet use increases and Java and HTML become more widely used and accepted, the value and acceptance of the NC should dramatically increase.
While Oracle Corporation has been the leading pioneer in developing this technology, other major vendors such as Microsoft, Sun, and IBM have jumped on the Network Computer bandwagon and all of these vendors have announced delivery of their products within the next eight months.
Some initial corporate pilots have proven successful. Terry Carlin, head of systems and product launch at British Telecommunications PLC (BT) in London said "The cost savings between the PC and the JavaStation (Sun's NC access device) looks to be real. BT has saved between 50% and 60% with beta JavaStations from Sun.2"
Given that the NC will not be generally available until first quarter 1997, it is clearly in the very early adopter stage. We would recommend a pilot implementation within the next year, as a potential 50% to 60% Information Technology cost savings would give most companies an instant competitive advantage. Also, given the commitment from four of the most powerful IT vendors to bring this technology to market, the probability of success of the NC technology is high.