Thin client technology has so far failed to deliver on its promise of client technology in an organisation can result in huge cost savings. Unfortunately, many dealers don't. low-cost, enterprise-wide, server-centric computing. Dealers complain that the savings per terminal over a conventional desktop PC are soon swallowed up by the cost of improving server performance and cite reluctance on the part of corporates to put their faith and business on the line with a one-box-serves-all system.
In the first Roundtable of 1999, PC Dealer assembled 70 UK resellers in the imposing surroundings of the Jacobean Room at Edinburgh Castle to discuss the state of the market. All were eager to find out more about where the technology was heading and how they could capitalise on it.
And - as always - a couple of brave hearts were able to get a few things off their chests.
Jane Rimmer regional marketing manager, Citrix Systems
Mark Jordan vice president and general manager EMEA, Wyse Technology
Yuri Pasea managing director, KNS
Scott Leckie technical manager, KNS Scotland
Alison Goldie sales manager, KNS Scotland
Stephen Adair IT manager, GEC Marconi Mission Avionics
Bill Lipscombe IT manager, BT Edinburgh
Stuart Fletcher technical development manager, Forestry Commission
Questions from the floor
Paul Sabacci assistant systems analyst, Forestry Commission
Andy McGlashen senior sales executive, Esteem Computers
David Taylor IT strategy, GEC
Alistair Kitching director of NT division, Esteem Computers
Ron Miles sales executive, Computer Associates
PC Dealer: One issue that continually arises in the early implementation of thin client technology is the need for users to beef up servers. What are the costs involved in deploying terminals and how can dealers help clients minimise initial costs?
Adair: Speaking from experience, when we implemented a thin client system, the initial sizing parameters defined by Citrix were probably under-specified.
Performance has been adequate, but not what we really wanted. Once it gets to the level of the original specification, performance is not that great. We also have fewer users on a particular server than we predicted.
So, we are looking at improving the quality of the servers. In memory terms, this is not particularly expensive. The biggest expense by far has been the licensing.
Goldie: If you add up the memory on each of the desktops you're running in a standard PC environment and weigh it up against the memory running the servers, you'll see that a server-centric environment costs considerably less.
Sabacci: Isn't it a case of the chicken and the egg - the price is high so people don't buy? That's the problem. We can sell a client a PC for #1,000 or one-and-a-half Win terminals for the same money. But people say: 'Well, if the server is down, I can't use the Win terminal but I can still use my PC.' If we could sell five Win terminals for the price of one PC, we'd really start to shift volume.
McGlashen: If you're looking at about #1,000 for a PC, you're looking at about #600 for a Win terminal. That's a considerable saving.
But you have to look closely at your environment. Historically, dumb terminals, Unix terminals and asynchronous terminals have been used in areas that are rich in transaction processing, such as hotel check-ins, sales departments and accounts departments.
That type of network doesn't often go down. If you're planning a move to server-centric computing, you have to consider how to manage your network.
Crucial factors are consultancy, the early design of the network and its robustness. To put everything into one server - with the potential for that server to fall over - is a recipe for disaster. It's all about spreading the risk, which is part of selling the system.
Jordan: The most important thing is to test, test and test before you go live. Where applications are concerned, think big. If you can potentially spread the applications over a number of servers and separate the ones that could be troublesome, you reduce the risks.
Fletcher: We put in a large number of Win terminals at the Forestry Commission and we had no problems with having to beef up the servers. I don't think you will always have to do that. They have been a success in that they have brought the total cost of running the system down and are easier for users than a PC.
PC Dealer: But surely that's the problem - two different sells into the corporate environment? A lot of companies that resellers would be selling into are medium-sized ones with a small number of PCs. When you're looking to replace those with thin clients, surely you will lose the saving you make because you have to pay to improve server performance. So why are the terminals so expensive and why haven't you answered the question?
Jordan: I think the question has been answered. As I said earlier, prices will come down. But there are additional costs in the food chain. Look at retained margin. The margin retained by the reseller on a Win terminal or thin client is much higher than on a PC sale.
OK, on how many PC installations would you manage to get 10 or 12 per cent margin? How many resellers sell Compaq or Dell machines?
Name one hardware brand on which you can get more than 10 per cent margin?
Kitching: But price Win terminals more aggressively and the market will quadruple.
Jordan: From the users' standpoint, it represents an initial saving on purchase price. It's a scale of economies. If one manufacturer is building between half a million and a million of these units per year, they will make more per unit and prices will come down. In fact, they already have.
Win terminals are becoming cheaper in small steps and the trend will continue as volume increases. But it isn't a question of all manufacturers pitching in for the maximum amount possible - it really is an emerging market and we're comparing it with one that's a lot bigger. It will take time to get the acquisition costs down, even from the manufacturing standpoint, but it's moving in the right direction.
Taylor: Several speakers have said Microsoft's NT 3.51 interface on existing WinFrame products is putting people off. The fact that users are unable to run some basic NT 4 applications is forcing them towards Windows Terminal Server, which is an expensive option. Do you think Microsoft is using its monopoly to force us into buying yet another of its products?
Rimmer: I think Microsoft's entry into the thin client-server market has expanded it for all of us. It has not had a detrimental affect. I know there have been some issues over pricing, particularly within educational establishments, but actually it's not about the first point of procurement.
Obviously, a lot of people do have to look at it from a budgetary perspective, but if you look at the whole of the application you are looking to deploy, the initial purchase cost is a very small percentage of that.
For customers looking to deploy across an enterprise-wide environment, the initial purchase cost is reaped one hundredfold once the application has been deployed. I think Microsoft's involvement is adding value for all of us, by raising market awareness of what the technology can deliver.
Lipscombe: A thin client implementation does add to the cost of the client. When you're using large Terminal Servers you need more licences, which can make the implementation more expensive in the long term.
Rimmer: Do you have a multiple user licensing agreement or a select agreement with Microsoft?
Rimmer: So the impact on your organisation is a lot smaller than on someone who would be going in and buying a new system?
Lipscombe: That's right. It isn't a problem for BT, but it could be very expensive for a small company.
Adair: I think a small company, with less buying power than we have to buy client access licences or make other licensing deals, would be put off. Certainly, looking at the pricing I have done, it is 80 per cent more expensive to procure a Terminal Server from scratch than to procure a WinFrame - and that's with keen pricing from Microsoft.
So it's a bit of a killer for some companies. I'm convinced that Microsoft will have to change its licensing model within the next 12 months, otherwise people will carry on buying WinFrame. Whether Microsoft is happy with that remains to be seen.
Rimmer: I think the situation arose from the fact that Citrix, with WinFrame, was first with this type of technology and the product was sold on a concurrency basis, which set an anomaly. Microsoft doesn't sell applications on a concurrent basis. So if you look at it as WinFrame versus Terminal Server and MetaFrame, the licensing agreement means added cost.
It's not that MetaFrame and Terminal Server are more expensive - perhaps WinFrame was just too cheap in the first place.
Kitching: That's the point. Anyone coming from a WinFrame environment has had a cushy time - apart from licensing. Compare the cost of client-server for NT 4 for the workstation on the desktop with the cost of Terminal Server thin client and you'll find they're quite similar. It's people in a WinFrame environment who see the benefit.
If you have to go to a green field site to compare the investment price of Terminal Server against NT 4 on the server and an NT 4 workstation on the desktop, the licensing costs are the same. It's the ongoing cost of ownership and management that wins the argument - but only in the long term.
Rimmer: Exactly. That's the key point. All we can do is go out there and educate the market. This isn't a case of 'buy it because it's cheap today', it's a case of what you're going to gain over a period of two to five to 10 years.
Kitching: As far as the WinFrame and Terminal Server licence debate goes, one important point is that WinFrame has not gone away. There are two products in this market - Citrix WinFrame and Microsoft Terminal Server - probably with the Citrix MetaFrame add-on. Terminal Server is not necessarily replacing WinFrame in certain sites.
People say: 'It's NT 3.51 - we don't want that, we want NT 4.' So we ask: 'Why do you want NT 4?' If the answer is that all they're trying to do is get an application out to a lot of desktops, or they're trying to get an application to run over slow links, low bandwidths or satellite links, we should find out whether the application can run on WinFrame.
If it does, that might be the cheaper way to do it.
Miles: Thin client technology relies on the back-end servers and the network. What would you recommend for managing those?
Leckie: I think the important thing is that if you're going to spend a lot of money on the network, you should spend it in the server room where you can control it. Make sure you are buying and supplying proper servers and putting in tier one manufacturers' equipment, not something that someone has bought for #14,000 from a computer magazine. You need to make sure the network is concentrated and you trust it.
The good thing about thin client technology is that Citrix and Microsoft products do tend to sit in well, no matter what people have in there.
If users are running Tivoli, Unicentre or OpenView, the kit can go alongside as a complementary application. The thing I like best is that you can control all this back there without having to wonder what's on peoples' desktops and add SNS or some other desktop management system. To be honest, I'd rather we got away from that.
Adair: As far as network management was concerned, we took the view that it didn't matter whether we were putting thin clients or PCs out there. We needed a network that was 100 per cent available because we needed to use it for email and a lot of file serving. As we move towards client-server applications, we are relying on the PC or desktop device through our standard Lan to get out the business applications that allow us to make things.
We took the view that the thin client was just another element in the picture and whatever tools were best for managing networks would apply in either case. One thing you can do is filter out the independent computing architecture (ICA) traffic on the packet-shaper you buy to manage the network and that can be quite useful as well. Looking at specific thin client issues, I don't think there is any need to use a particular system management tool.
Jordan: That's an important point. All the early devices came from one or two companies. But what you are seeing is not the market taking off - it has taken off and people are moving into it.
A lot of people are jumping in, so when you do select your device - whether it's a PC, notebook or Windows-based terminal - it's important to know it offers some manageability. Just select the right device and select the right partner.
I think the most important thing we'll see this year is better manageability of thin clients. The network manager will be able to do automatic upgrades, checking the latest revision of firmware, automatic updating and the ability to set passwords remotely - all those sorts of things. This is all going to become important from the hardware standpoint and the support of your hardware manufacturer is going to be a key selling point.
The deal builds on distie's earlier promise to distribute a broader range of electrical goods
Services firm sees revenue increase 23 per cent
Execs Zak Virdi and Neil Lomax open up on the rationale behind acquisition
CEO Steve Brazier slams vendor titans at annual event in Barcelona