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The fight for the NC market is on as the combined weight of Microsoftand Intel is pitted against all comers. Geof Wheelwright visits theircorner

Microsoft and Intel have made an official entrance into the battle for the corporate network computer (NC) market with the unveiling of their Net PC in late October. The so-called Wintel alliance has finally dropped the pretense that the NC idea doesn't matter.

Oracle, Sun Microsystems and dozens of others have made so much noise about the idea of a computer designed principally to connect to the Internet or the corporate intranet that Microsoft and Intel were forced to set out some clear plans in response.

The first was the Simply Interactive PC idea announced last spring. This seemed long on rhetoric and short on timetables. The companies rectified this on 28 October with the announcement of 'an initiative to develop the Net PC reference platform'.

Intel and Microsoft are portraying the Net PC as a 'new member of the PC family that will reduce the cost of business computing by optimising design for a particular class of task-oriented users that do not require the flexibility and expandability' of traditional PCs.

The companies went to great lengths to emphasise that the Net PC is meant to be a new PC family member, not a replacement for anything the companies already offer. The Net PC is supposed to let PC vendors make Intel-based systems using the Windows operating system 'that lower the cost of owning PCs'.

The hope clearly is that it will distract vendors from the idea of making non-Windows Internet computers that do not use Intel chips. But Intel and Microsoft prefer to emphasise the overall benefit as 'reduced support costs, a stable hardware platform for several years, a lower initial purchase price and the ability to build on existing organisation training, development and capital investments in Windows and applications that are designed for Windows'.

The line on all this from the existing market leaders is that although PCs have always offered the highest level of price/performance, compatibility and adaptability, many people still think they are too expensive to buy and maintain.

So the companies have set their sights on producing cheaper machines that cost less to run and are less likely to become quickly obsolete.

To do this, they pledge that the Net PC reference platform will specify industry-standard components (processor, memory, hard drive, video and audio) with an integrated network adaptor or modem in a locked case with limited expandability to prevent user modification. In many ways, the initiative comes across as trying to do for the PC industry what automatic transmission did for the car.

Intel, in particular, is keen to claim its share of the credit. 'This new effort, to deliver a PC platform for specific types of users, builds on Intel's Wired for Management initiative to reduce total cost of ownership without sacrificing necessary performance,' says Frank Gill, executive VP at Intel. 'By delivering an appropriate level of flexibility, the Net PC is the natural next step in further reducing cost of ownership while maintaining the strategic value that PCs deliver to business.'

Despite this obvious trumpet-blowing, the Net PC appears to have no shortage of manufacturers lined up to produce the systems, with Hewlett Packard near the head of the line. 'The Net PC offers the critical elements of both PC computing and network computing without introducing costly incompatibilities,' says Jacques Clay, HP general manager in charge of worldwide commercial PC business. 'Hewlett Packard is committed to delivering a Net PC solution in 1997 as part of its Vectra PC family.'

On first inspection, it is hard to see what is different in this proposition from the dozens of cheap, sealed-case PC systems that have been proposed and produced over the past 10 years - except this one will run Windows 95 and be able to view Web pages and handle email.

The UK's own Apricot was a champion of the diskless workstation for years. An initial look at the specs would not reveal a huge difference between the Net PC and a typical diskless PC, except that it has its own local storage.

But according to Intel and Microsoft, the real difference between this plan and those that have gone before it lies in the way the Net PC will be maintained and administered.

Microsoft has introduced a Zero Administration initiative for Windows and Intel and is touting its Wired for Management scheme. These two efforts will allow organisations to update software remotely. They enable users to move seamlessly from one machine to another with all their data and applications easily accessible and with their customised environment automatically applied to the new PC.

Of the two, the Microsoft Zero Administration initiative bears the closest inspection, as it was launched hand-in-hand with the Net PC. The company makes clear that the effort is aimed at existing Windows-based PCs as well as the new Net PCs. It further promises that the initiative will reduce the cost of owning PCs while building on the existing investment that companies have in the Windows operating system.

Chief executive Bill Gates says: 'Customers want to update software without touching every machine. They want to move seamlessly move from one machine to another, and they want to gain these benefits without introducing the unnecessary complexity of new, incompatible hardware and operating systems.'

The Zero Administration initiative will give IT professionals new levels of control and manageability over their Windows-based environments by automating tasks such as operating-system updates and application installation, and by providing tools for central administration and desktop system lock-down.

In this brave new world, Microsoft sees a time when users will be able to roam between PCs without requiring their applications and files to be reinstalled each time. The initiative enables application software developers to deploy a wide range of applications more easily.

For long-time computer professionals, the specific features of Zero Administration may look familiar, particularly when viewed from the perspective of the old mainframe and minicomputer world. Microsoft says users will see a number of key features in the initiative.

Automatic system update and application installation. Microsoft claims the operating system will update itself when the computer is booted, without user intervention, seeking the latest necessary code and drivers from a server, intranet or the Internet, if available.

Meanwhile, the automatic desktop feature will provide users with all available applications, installing them automatically when invoked.

All status information kept on the server. Under this scheme, a user's data can be automatically reflected to servers, ensuring high availability and allowing mobile users to have access to information whether connected to the network or not.

Central administration and system lock-down. It sounds like mainframe talk. All aspects of client systems will be controllable by a central administrator across the network. Microsoft says that in a few simple steps, the system can be locked down to 'maintain controlled, consistent and secure configurations across sets of users'.

The degree of flexibility can be altered on a per-user basis by the central administrator, without having to change hardware and software.

These functions will be available to varying degrees on future versions of Microsoft Windows 95 and Microsoft Windows NT Workstation, and will be supported by Windows NT Server as well as being part of the Net PC effort.

Microsoft quotes computer industry analysts such as the Gartner Group and Forrester Research in claiming that features such as remote diagnosis and management of key system services, standardised system policies and centralised user profiles, and Windows NT Workstation's ability to securely lock-down system configurations will result in savings on support costs and improved manageability.

And it ties back into the whole Net PC idea. 'The Net PC will be an important PC platform that organisations can deploy to increase return on investment,' claims Paul Maritz, Microsoft group VP.

Leading PC manufacturers that have announced their support for the Net PC include Compaq, Dell, Digital Equipment, Gateway 2000, Hewlett Packard, Packard Bell, NEC and Texas Instruments.

The support of Compaq, in particular, has to be important to Intel and Microsoft. Compaq senior vice president and group general manager of enterprise computing group John Rose makes the point that this is not about just producing cheap PCs. 'Compaq's objective is to maximise customer value by delivering systems solutions with the lowest total cost of ownership in the industry,' he says.

Meanwhile, Michael Dell, chairman and CEO of a resurgent Dell Computer, appears to be using the Net PC announcement as a chance to take an oblique swipe at Sun and Oracle by making them look like the ones opposing open standards with their respective Java station and NC announcements.

'We have consistently supported open standards, which is one of the reasons we believe this announcement is critical,' says Dell. 'The industry has seen a number of proprietary designs for network computers proposed recently - a clear step backward that would require customers to support multiple computing environments, increasing support costs and complexity.

'The Net PC concept is ideal for task-oriented workers, and the Net PC design specification offers customers a totally managed approach within the framework of their existing environment.'

There are clear signs that Digital Equipment wants to be a part of a winning strategy - any winning strategy - and sees itself as having unique credentials in this effort. 'Digital, known worldwide as a provider of enterprise solutions and for its commitment to the Windows NT platform, endorses industry efforts to lower the overall cost of ownership for personal computers in networked environments,' says Digital VP and personal computer business unit chief technology officer Scott Cutler.

'We have traditionally focused on manageability and security in networked business environments, and we endorse efforts in the industry to move in this direction.'

The main result of all this for dealers is that they can be confident of meeting the anticipated demand for network computer-style devices from existing PC suppliers. There will finally be some real competition with a credible story to tell. They can also know that Intel, for example, will have to be on its toes to make sure that its processor can stand up well to both Sun's Java chips and the Acorn ARM chips being used in the network computers so far announced by many of the Oracle network computer licensees.

Microsoft, meanwhile, will yet again have to come up with a number of reasons to stay with Windows - particularly when Java-based wordprocessors, spreadsheets and presentation packages start arriving with the capability to run on any system that can use a Java-based browser.

One interesting wrinkle of particular note to dealers is that Intel may sidestep its part of the debate by having its chips used in versions of the NC. In fact, in an address to press and analysts at Oracle World in San Francisco earlier this month, Oracle chief executive Larry Ellison showed off a prototype of an Intel-based NC and then proceeded to suggest it would probably form the bulk of the systems sold to corporate accounts.

He said that although Arm chips were cheap, designed well and fast, the corporate computing world had a love affair with Intel that he would not attempt to interfere with.

Ellison has not yet announced a single manufacturer planning to offer Intel-based NCs, but it is clear that he is trying to use this as a way to cleave the so far impenetrable Microsoft-Intel alliance.

This development makes it quite clear where Oracle's whole network computing initiative is really aiming - straight at the heart of Microsoft in an attempt to unseat the boys from Redmond from their huge position of influence over the computer industry.

But at the end of it all dealers and Vars will have to find a way to add value to the sale of a network computer. If the system comes in a sealed case and pulls its updates, support and even much of its software off the corporate network or the Internet, what can dealers reasonably expect to sell alongside it?

That question, perhaps more than any other, is what will probably keep dealers in the Microsoft camp as it does not appear that Sun, Oracle nor any of the other major prospective suppliers of these kinds of devices appear to have thought it through.