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News In Review

October 12, 1998


A Thin Foothold

Thin clients may not be right for every business, but they're finding a market

By Barbara DePompa

Illustration by Barton Stabler More than two years after the concept of thin-client computing was launched, IT executives haven't exactly lined up to add these systems to their companies' assets.

But while thin clients may not yet fit into every organization's framework, they've become a top choice in certain types of businesses. In particular, they've gained a foothold in industries where most employees are focused on one application that doesn't require the local intelligence that PCs possess, such as airline reservations or loan processing. And while the 650,000 network computers that will ship worldwide this year is just a small fraction of the 70 million PCs that will ship, demand is growing. By 2000, Zona Research estimates, 5.5 million NCs will ship.

NCs are already finding their way into a few large companies making big investments in the technology. The Home Depot Inc., for instance, will spend nearly $50 million on its thin-client installation. That's a far cry from many of the smaller installations that have been buying into thin clients 100 or 200 units at a time.

Cheap And Easy
IT managers in organizations that are choosing thin clients for users working on one application typically share a common goal: "They want a low-cost PC or terminal replacement that is easy to install, inexpensive to maintain, and won't be out-of-date by next Tuesday," says Zona analyst Greg Blatnick. Because thin clients lack features such as a hard disk and can be centrally managed, NCs are cheaper to buy and operate. Precisely how much cheaper NCs are than PC installations is still in question, but Gartner Group Inc. pegs the savings over the course of five years between 24% and 31% and says the total cost of ownership (TCO) per PC is between $8,000 and $10,000 over a five-year period.

Large companies such as Home Depot and Sabre Group Holdings Inc. cite TCO savings as a reason for choosing thin clients, as do smaller thin-client customers such as Bombardier Capital Mortgage Division in Jacksonville, Fla., a subsidiary of Bombardier Capital Corp. in Montreal.

As the range of features and functions offered by thin clients evolves, IT executives may find that they can deploy these systems to an even wider range of users, further decreasing TCO across the company. For instance, Windows NT 4.0 Terminal Server Edition lets Windows and NT applications running on an NT server transport data to Windows-based terminals. Meanwhile, IBM offers Network Stations that can support Java, legacy, Internet, and Windows applications, depending on which model or server add-ons users purchase.

Of course, there are still challenges to be met-for instance, Home Depot hasn't found an NC platform that can run multiple custom applications to its satisfaction and that's flexible enough to support new ones as needed. But Bombardier Capital Mortgage, satisfied with the productivity boost it has seen by giving thin clients to clerical workers in certain divisions, is already thinking about how to bring other users who perform multiple functions onboard with the technology.

Here's how Sabre, Home Depot, and Bombardier are proceeding with their thin-client implementations.

Sabre: Signs On With Sun
Sabre Group Holdings, an airline reservations company with $1.78 billion in revenue last year, has been interested in thin-client computers since early 1997. The company's goal has been to port its client-server reservations software, Qik-Access, to Java. In June, just months after Sun Microsystems introduced its JavaStation NCs, Sabre signed an agreement with the company to do just that-as well as resell JavaStations to its customers.

Noreen Henry, senior director of Sabre Technology Solutions, the company's IT division, says thin-client computing makes sense for Sabre and its customers. These include airlines, travel agencies, and rail, hotel, cruise, and tour companies, whose 75,000 agents use Qik-Access to perform either reservation or check-in tasks. Sabre, which was spun off in late 1996 by parent AMR Corp., still counts AMR's American Airlines as its biggest customer.

These users, Henry says, have long struggled with their current PC systems' ownership cost. "Some of those customers have thousands of PCs currently in place and are looking for ways to better manage the cost of maintaining and supporting all of those systems," Henry says.

The rewrite of Qik-Access from C++ to Java should be completed by year's end. Beta versions of Sun JavaStations running the new Qik-Access software will be sent to selected travel and reservation users in the first quarter of next year.

When it's finally finished, the Sabre/Sun JavaStation system will be Sabre's preferred in-house platform, and will also be offered to customers. Sabre now supplies its Qik-Access software to run on a variety of PC platforms, including Windows, and customers today buy PCs from their own sources.

Henry says that even though Sabre will resell JavaStations, the company will continue to support Qik-Access on other platforms, at least for a while. But since Java programs don't need to be written for specific server or client systems, rewriting the software to "100% Java," which users on other platforms can someday use, should ultimately reduce the cost of supporting multiple computer platforms, as well as make it easy to add new ones, Henry says.

Some observers say Sabre may be taking some risks by porting an important application to Java and by choosing JavaStations; these thin clients haven't been successful so far because they're not appropriate for running anything other than Java applications. But Henry maintains that reducing TCO is the main goal-and that this solution is the best way for Sabre and its customers to meet that goal.

Home Depot: Fence-Sitting
With $24 billion in revenue and new stores opening at the rate of almost three per week, Home Depot is taking its time selecting thin-client computer suppliers.

Attracted by the thin-client concept about two years ago, the company has set a goal of deploying 95,000 network computers in its retail stores by 2002. Home Depot wants to buy the systems from a single supplier but has had trouble finding an NC that's adept at performing the multiple tasks the company has in mind for the units.

Within each store, Home Depot plans to ultimately use whichever model it chooses as cash registers and in-store kiosks that offer customers information on home-improvement projects. At the forefront of the company's agenda is testing three Java-based applications-customer service, call center, and reporting. "We won't deploy an NC system companywide until we've tested the platform in all three settings," says Brad Albers, director of IS for Home Depot.

The company now has NC systems from 12 different manufacturers-including IBM, Sun, and Wyse Technology-in its lab. However, the testing has been slowed by the variations in the different units' performance with Home Depot's three key apps.

For instance, the response time on one particular system may be adequate for the Java-based reporting application but not for the Java-based customer-service application. Albers says each company's version of Java uses the language's development tools dif- ferently, accounting for the variations in application response times. The fact that IBM Network Station's Navio browser and Sun JavaStation's Hot Java browser don't necessarily support JavaBeans applets and JavaScript development tools equally has other implications, too.

"That makes it difficult for us because we may want to develop applications using different methods," Albers says. "We've got to be sure the system we choose can adequately support multiple types of Java development methods." While it's time-consuming to do the kind of real-world testing Home Depot does, Albers says that with 70 systems going into each store, the company can't afford to rely on benchmark numbers.

Admittedly, Home Depot expects a lot from what is still an immature technology. But it's finally starting to narrow the field of suppliers and plans to make its decision in the next several months. Performance on Home Depot's tests, the viability of the supplier, and cost will play a part in its choice.

Both Albers and VP of IS Mike Anderson say the volume discount for 95,000 NCs should bring the cost per system to less than $500. "That's the purchase price we are really hoping for," Anderson says, noting that the company is as driven as others by the need to lower PC support costs. "Those costs eat away at the bottom line, but we realize we can't hurry to implement systems that won't enable us to easily add new applications in the future."

Bombardier: Raising Productivity
Bombardier Capital Mortgage Division boosted productivity after installing network computers for 350 of its 440 employees.

The two-year-old subsidiary, which finances prefabricated homes in 30 states, originally installed a client-server system, but there were problems. "We had difficulty managing the PC server, distributing software and upgrades to the client PCs, policing users who played games, and living with downtime due to [server and PC hardware] failures," says Al Sorheim, VP of planning and systems. "The first system was just a ton of problems."

Sorheim says he learned about network computers as low-cost, more easily managed PC replacements during discussions with ALE Systems Inc. to provide Bombardier with new loan processing software. ALE steered him to IBM's AS/400 Model 650, which has proved to be a more fault-resilient server than its predecessor; along with that, Bombardier bought IBM Network Stations in early 1998. "In all, the switch to ALE's specialized software and the new server and NCs boosted productivity by 400%," says Sorheim, pointing to factors such as increased uptime and greater control over users' systems.

Until now, data-entry, credit-management, and loan-processing workers have been given Network Station 100 Series and 300 Series systems, while supervisors, managers, and secretaries were given PCs "because they need more of the functionality offered by Microsoft's suite of software," Sorheim says.

However, Sorheim has been so pleased with the reliable, easy-to-use Network Stations that he's thinking about buying the new 1000 Series to replace the rest of the PCs-the 1000 Series systems run the required Windows applications.

Sorheim likes the potential cost savings of moving all users to thin clients. Since the data is stored on the server, administrators need only upgrade and maintain the server to maintain the end-user systems. Says Sorheim, "We still maintain a staff of technical people to support our PCs, but no one is needed to support our thin clients."


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