IBM execs, analysts positive about new NC

IBM is getting good reports from analysts who believe the company is on track with its plan to market a network computer to the corporate-based terminal market.

Jumping on the network computer bandwagon with the release of the US$700 Network Station, IBM is getting the thumbs up from analysts who believe the company is on track with its plan to market the device to the corporate-based terminal market.

"IBM is targeting the Network Station as the replacement for the 20-30 million terminals out there," says Irving Wladawsky-Berger, general manager of IBM's Internet division.

Terminals, which are essentially monitors used to link employees to mainframe computers, are currently used in operations such as manufacturing, inventory, purchasing and sales tracking, Wladawsky-Berger says. The new IBM NC will "have a prettier interface than traditional terminals and expand the client to allow users to browse the Web and run Java applications," he says.

IBM's announcement (see IBM launches)comes four months after it, Oracle, Netscape, Sun and Apple agreed on a common specification for network computer devices. Analysts are confident that IBM's plan to target terminal users is a strong stance.

"The terminal market is the right market for the NC to go after and IBM understands that," says Dave Folger, programme director for META Group's workgroup computing strategies service.

Some of the advantages for companies wishing to deploy a Web terminal over a traditional terminal include giving employees access to more information, an easier learning curve because everything is done through a Web browser, and lower cost of ownership in the long run, Folger says.

According to a study conducted by Forrester Research, the NC will replace at least 20% of the terminal market in the next two years and 42% of Fortune 1000 companies are interested in deploying NCs, says Tom Rhinelander, an analyst for Forrester. However, while the NC may overtake the terminal in the next five years in terms of number of new sales, it will never replace the PC, Folger says. "IBM's announcement isn't going to blow Microsoft out of the water or anything."

"IBM has a large installed base of mainframe access terminals and they are very smart to target this market," says Eileen O'Brien, director of the terminal programme at International Data, adding that terminals are usually replaced every three-to-five years.

Some terminal users have been moving to PCs over the past few years because they needed more functionality, but an NC such as the Network Terminal could replace the need to buy costly PCs, O'Brien says. Plus, the NC is a much more secure device than a PC, says O'Brien, since it doesn't have a disk drive which would allow employees to load viruses, or counter-productive PC games, into the machine. "Targeting the corporate market is much smarter than targeting the home market," O'Brien says.

She says bandwidth issues will keep NCs out of homes for the next few years. "Corporate networks don't need to worry about accessing the intranet with a slow modem."

Rhinelander says there was also a matter of company trust in IBM, since no one knows the terminal market better than IBM. "They aren't just a flash-in-the-pan Internet computing startup like many of the other vendors who've announced they'll make NCs," he says. "IBM will begin to legitimise the NC market with this release; this is a clear message to the corporate market that a trusted terminal vendor is endorsing an NC."

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