Crunch time arrives for Oracle's NC unit

Jerry Baker was not too sure about network computers (NCs) at first. But he changed his mind shortly after Oracle Corp. Chairman Larry Ellison handpicked him to run the company's Network Computer Inc. (NCI) subsidiary when it was formed last May. Now it's other people's turn to be to too sure about the progress of NCI itself.

Jerry Baker was not too sure about network computers (NCs) at first. But he changed his mind shortly after Oracle Corp. Chairman Larry Ellison handpicked him to run the company's Network Computer Inc. (NCI) subsidiary when it was formed last May.

"It took me weeks to set up my own PC upon moving into NCI's new offices, and even then I finally had to bring in an IS person," says Baker, NCI's CEO. "It dawned on me then: These things really are complex. That turned me from an NC skeptic into a real believer."

The next few months will be a critical time for NCI in terms of finding out whether customers are skeptics or believers.

Despite the hype that Ellison has whipped up around the NC concept, thin-client devices that run Java applets stored on servers are still largely unproven as cheaper, easier-to-manage alternatives to PCs running Microsoft Windows.

Most NC hardware and software products won't ship in volume until the end of the year the year, and relatively few robust Java applications are available. Even customers who have bought into the NC concept are typically only conducting small pilot projects.

"I'm frankly disappointed in NCI's progress," says one industry analyst who insisted on anonymity. "I would have liked to see more support from hardware and software applications vendors."

But NCI is not standing still. The company just snapped up Netscape's Navio subsidiary, which is focused on consumer-oriented NCs.

NCI also will announce shortly a licensing agreement involving software from a third-party vendor that lets NCs access server-based Windows applications. And in June, the company will formally demonstrate its client and server software as well as announce a slew of hardware and software partnerships.

By year-end, Baker says, NC hardware and software will ship in volume, and he plans to have a half-dozen corporate accounts, each deploying at least several hundred NCs.

While the NC has not come close yet to killing off PCs that run Windows, NCI clearly has touched a nerve at Microsoft. Chairman Bill Gates and company last fall announced the NetPC program, which is designed to create a simpler, easier way to manage PCs. More recently, Gates said Microsoft would create its own version of an NC, dubbed the Windows terminal.

"[NCI] showed that thin desktop clients with server-centric applications were a viable approach and could save a great deal of money for certain types of users," says Dan Kusnetzky, an analyst with International Data Corp.

Under Baker, a trusted Ellison lieutenant who had directed some 1,000 programers while with Oracle proper, NCI has midwifed a standard hardware and software description of the NC called the NC Reference Profile. NCI licensed the profile to a host of companies now building NCs.

Last month, NCI released a limited edition of its NC client and server software, and also released office and desktop applications based on Oracle products.

"Any objective observer would have to give NCI considerable credit for developing, borrowing and buying technologies, and then gluing them together and getting the result to market," says Peter Kastner, a vice president at Aberdeen Group, Inc., a Boston-based consultancy.

But both the promise of NCI and the problems facing the company are typified by the needs of its lone corporate customer to date, retail florist 1-800-FLOWERS in Westbury, New York.

For years, the florist has wanted to switch hundreds of call center order takers from terminals to PCs but found the cost of doing so was prohibitive, says Chris McCann, a vice president at the company. After talking with Baker and the NCI technical staff, the florist tested early NCs in a pilot program. The plan now is to roll out the devices gradually to eight call centers and then to hundreds of retail stores, bundled with new software applications.

However, initial use will not be for the Java and HTML programs NCs were designed to run. Rather, McCann says the devices will access existing Windows and Oracle applications.

For some observers, NCI is not so much creating the NC wave as riding it. The company is exploiting Internet technologies that make thin-client computing possible and attractive, just as user frustration with Windows PCs is reaching a new high.

"If network computing does succeed, NCI has the chance to be a major player in making this new kind of device work in the commercial market," says Tom Austin, a vice president at Gartner Group.

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