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Here We Go Again: Thin-Client Vendors Look To Unseat PC

Has enough been learned from the first time around to make this time different? And will IT departments and users be willing to give up all that desktop power for
November 07, 2005

The era of the PC is almost over, and the era of the [thin client] is about to begin," Oracle CEO Larry Ellison said during a press conference in March 1996, echoing a declaration similar to ones often made by Sun Microsystems CEO Scott McNealy around the same time. Almost 10 years later, though, thin clients command only a tiny fraction of the desktop market.

Here we go again. Some vendors are saying that the increased availability of Web applications and growing network bandwidth will see--for real, this time--the thin client overthrow the PC as king of the desktop. Wyse Technology Inc. and Sun hope to forge the way, revealing last week an agreement to bundle and sell Sun Secure Global Desktop software on Wyse's thin clients and work together more.

"You're not just talking about a device, you're talking about an infrastructure for computing," Wyse CEO John Kish says. Wyse leads the thin-client market with $225 million in annual sales.

Thin clients eventually will make up 85% of the desktop market, Kish predicted at an event in New York City last week. A tad too ambitious? Consider that thin clients account for about 1% of today's desktop market. Research firm IDC projects that the thin-client market will hit 2.4 million units this year, up 46% from 2004, and reach 5.3 million units next year with total sales of $1.25 billion. Hewlett-Packard holds second place in the market, followed by Neoware Systems Inc., according to IDC.

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