Some folks from
a management consulting firm working on a
research project recently interviewed me to
get my thoughts about the future of the thin
client device market space. Here's what I
told them:
1. Analysts are projecting 15-30% growth
rates for thin clients though growth hasn't
been that strong recently. Do you think
those rates are attainable? Has anything
fundamentally changed to really drive that
growth or is it pent-up demand that will be
unleashed once IT spending recovers?
Yes, those rates are attainable. In fact,
it's not that growth will be unleashed once
IT spending recovers, rather, it's the
current IT climate that's driving this
spending.
Once IT spending does pick up, I think
people are going to be a lot smarter about
how they spend. However, future IT and
application models will totally support thin
client devices. Look at the current
emergence of server blade computing and the
software to manage those types of environments.
This is why IBM bought Think Dynamics. Also, don't forget about
the emerging importance of virtual server
technology. (This is why Connectix was acquired by
Microsoft) Also, the fact that Bandwidth is becoming a commodity allows thin client solutions to get stronger and stronger.
2. We know that HP broke off its
relationship with Wyse... Do you think PC
vendors are trying to enter this space? How
will they go about it? What success do you
think they'll have?
I think they'll
have to. They're all commodities, PCs and
Thin Clients. All the PC vendors are trying
to push their value-add services (which is
why HP bought Compaq, why IBM bought PWC
Consulting, and why Dell bought Plural). I
think they'll be successful.
Compaq has
always made sexy stuff. They used Wyse early
on so that they could test the waters. Now,
with their iPAQ 5700 we see them branching
out on their own. IBM has been making thin
clients for years. Dell always waits until
things become commodities to enter the
market (which is why they just now entered
the printer and handheld markets).
The PC
vendors will be successful.. Again, it goes
back to the fact that these are all just
commodities. The big vendors can afford the
slim margins. The dedicated terminal vendors
are the ones who are in trouble. Wyse,
Neoware, NetX, etc.. They must differentiate
themselves also, which is why Wyse now OEMs
T-Scale from RTO under the Expedian name.
3. What are trends in software for thin
clients? Are customers willing to pay for
device management software? Will that become
the key purchasing criteria? Which vendor
has the stronger offering and why? What
about software for reconfigured PCs?
The big trend in the thin client device
market is the Move towards "chubby" Thin
clients have always had local browsing,
local 3270 terminal stuff, and local ICA and
RDP clients. But with today's chubby
clients, they now have local streaming
media, maybe local Acrobat and local
storage. Customers making purchase decisions
will have to balance simplicity with the
ability to offload work from their servers
onto their clients.
As for management
software, I don't think people are willing
to pay too much for management software. I
think it's expected. Thin clients have
always been about ease of management, and I
think that customers are turned off by high
"a la carte" ad-ins such as management. Even
with companies like HP and Wyse offering
Altiris or Rapport licenses for the clients,
some people are angry about having to pay
thousands of dollars for the server
software.
4. What is the typical useful
life for a thin client (before it needs to
be replaced)? Is that lengthening or
shortening? How hard is it to switch vendors
of thin clients?
Lifespan is
shortening as these things become more
powerful. I mean come on... these things
have 1GHz processors now. I don't think that
the current lifespan of these devices is
much more than that of a PC. Sure they have
no moving parts, but computing requirements
still increase, ultimately eclipsing the
current hardware.
Of course, all of this
thin client hoo-ah is just a temporary
stop-gap solution until we get to the true
fluid computing / .NET / whatever the future
holds.