Future looks bright for thin client

Windows NT, ecommerce and thin client computing will be the technologies that take companies into the millennium. A year after thin client computing won Microsoft's backing, the technology still needs to overcome concerns over cost, writes Jane Dudman.

Lou Gerstner's prophecy that the PC era is dead prompted a lot of raised eyebrows. It seemed strange that the chairman and chief executive of IBM - a large PC vendor - should say this, especially after resisting the network computer's supposed onslaught.

But there's more to Gerstner's prediction than meets the eye. A fresh threat from thin clients is emerging, as the number of those adopting the technology is poised to soar. This is one of the key findings in the 1999 National Computing Centre (NCC) survey of IT users.

The survey, conducted annually since 1980, looks at issues affecting IT managers, from budgets to systems strategy. It aims to assess the year's IT trends and future directions. This year, the NCC polled 404 IT directors in charge of half-a-million end users in the UK.

The NCC identified clear winners and losers: winners include Windows NT and its successor Windows 2000 - which will make huge inroads into both server and desktop markets during the next two years. Half of all end-user devices will be running NT or Win2000 by 2001, says the NCC.

It also predicts that, by 2001, the number of NT servers will have doubled to more than 6,000. The number of Novell Netware servers will have halved to just under 2,000.

Electronic commerce is on the up because perceptions over how to use the Internet have shifted massively since last year. In 1998, the Net was seen mainly as a good marketing tool. About 60% of IT managers polled said it was good at raising corporate and image awareness.

A year later, and ecommerce is top of the agenda, with 23% of managers saying that they are planning Internet-based ecommerce.

Intranets have fared less well. Although they are now widespread, a quarter of organisations surveyed said they are disappointed with their experiences so far, finding it harder than expected to keep information up-to-date and to accrue real business benefits.

IT budgets look set to suffer. Last year saw optimism in the growth of this year's IT budgets, mainly to cope with year 2000 work and projects brought forward before the date change. Next year's budgets are considerably smaller - 15% of respondents predict a budget increase greater than 10%, less than half the proportion predicting such an increase last year.

But the most significant finding of the survey is the increasing popularity of thin client computing.

Thin client computing is where applications are held and executed centrally on the server. Changes to particular data fields are simply downloaded to the client across the network.

A year ago this week, Microsoft recognised the technology's potential and launched Windows NT 4 Terminal Server (WTS). It runs on Windows applications on the server and serves data to Windows and non-Windows clients.

Software vendor Citrix was even further ahead of the game - it launched its own Winframe thin-client software in 1996.

NCC statistics are based on take-up of the server and operating systems for thin-client technology, rather than client devices. During WTS' first year, thin clients achieved only a small number of installations. Less than 10% of companies have a major commitment to the technology, and less than 30% have any current thin-client applications. This is because of the technology is relatively unproven.

'There are some organisations where the IT department favours thin client, but it's not easy to implement on a large scale. Any new technology has to prove itself, and people want to see reference sites,' says Dominic Cornford, an associate consultant at the NCC.

But this position will change. Sixty three per cent of respondents predict that they will be using some thin-client technology by 2001, and almost a quarter say they will have adopted it on a fairly widespread basis or that it will be a key strategic technology.

Large organisations are looking seriously at thin-client systems. More than three-quarters of larger companies, those with more than 500 users, say they will probably be using thin-client tech- nology in two years' time.

The key reason for this upsurge is the need to get the desktop environment back under central control. More than 70% of those planning to implement thin-client systems said ease of management of the desktop environ- ment was a major attraction.

Alexis Easton, IT manager at Clackmannanshire Council, Tayside, says a return to centralised control will make the IT department's job easier.

Easton has rolled out WTS to 600 desktops. 'The skills shortage has made people look at what areas they cover and what people they have,' she says.

Thin-client technology has other important benefits. It offers lower total cost of ownership and better security than existing PC-based systems.

Applications and users' access rights and privileges are held on a central server, which means there is less opportunity for users to install software that introduces bugs or crashes PCs.

Cornford says that thin-client technology can deliver two immediate cost savings. When organisations choose to install thin-client software on existing PCs, they can extend the life of equipment that would otherwise have been upgraded or thrown away to keep up with growing systems demands.

He says this kind of approach tends to be used for specific departmental applications.

Companies are also installing thin-client systems from scratch and will buy thin-client desktop devices because of the much lower cost of ownership of the server-based approach.

Another benefit is the network-friendly nature of thin client architecture, compared with client/server architecture. WTS and Winframe download minute screen updates to client devices, so applications need only low bandwidth.

Key benefits are increased speed of access to applications over wide area networks, enhanced processing speed for remote dial-up users, and the ability to use existing cabling infrastructure and avoid upgrades.

Thin-client computing may have growing appeal, but there are some hidden costs. WTS has drawn flack during its first year over its cost, which may have hindered takeup. Initially, Microsoft said all who accessed WTS had to run an NT 4 Workstation licence, but the company shifted its position in January.

Non-Windows clients can now buy a client access licence instead of an NT Workstation licence, which is about 20% cheaper than before.

However, there is a still a substantial price difference between Winframe and WTS when the Microsoft product is running more advanced server management software, Metaframe from Citrix. Winframe costs about £5,000 for 15 users, while the WTS bundle is almost double.

But Citrix and its partners are seeing increased demand for the Metaframe-based system. One Citrix distributor said that demand had 'gone crazy' since the release of the latest version of Metaframe, version 1.8, in February.

Chris Hammans, Citrix director of enterprise accounts for northern Europe, says Microsoft's licensing change has increased sales: 'When Microsoft changed its licensing policy, it was seen as a message that it wanted to make server-based computing part of its product set.'

But Avi Fraenkel, group IT director for textile retailer and manufacturer The Worthington Group, says cost is the single biggest factor that deters him from adopting WTS. Fraenkel, a Winframe user, says: 'The cost of the upgrade is completely nonsensical. If you are using Winframe to serve up one or two applications group-wide, you can't justify the cost.'

But for existing Microsoft customers it's a different story. Charles Patey, infrastructure planning manager at Homebase, says Microsoft licence discount schemes mean WTS is not a hindrance. However, like many companies using Microsoft software, he says it is easier to stick with the Redmond giant. 'We are fairly embedded into Microsoft,' he says.

Neither Microsoft nor Citrix will say how many WTS licences have now been sold in the UK, either before or after the pricing change.

Citrix has sold more than 100,000 Winframe and Metaframe licences, and claims that more than eight million end-user devices hang off its thin client servers. The Metaframe customer base is split almost evenly between existing Winframe customers looking to upgrade and new organisations looking to install some form of thin client technology.

Anecdotal evidence suggests that there have been some sizeable installations, and that these are poised to get bigger as early adopters enter the next stage of deployment. Clackmannanshire Council plans to double the number of client installations by rolling out to local schools in collaboration with the local education authority. Homebase is eyeing up a rollout of WTS to users in its 288 retail outlets nationwide, having initiated a rollout at its head office in London. This seems to back up the NCC's prediction that thin-client computing will expand during the next two years.

Frances Fawcett, Windows product marketing manager, says many organisations will deploy thin client computing only for specific applications or uses, not as a replacement for traditional client/server computing. This is because client/server technology has saturated the market, and not because there are any problems over scalability, she says.

'Because this is a technology that depends on central computing resources, the scalability depends on the resources available. There are no real limits,' she says.

So thin client computing has joined the group of promising technologies and trends. Thin clients, ecommerce and the ever-popular NT and Win2000 will grow once attention shifts from year 2000 work.

But technology will not succeed by itself. With IT budgets being scaled down, resistance to the price of WTS and the uphill task of changing existing IT infrastructure, it seems that thin client technology will flourish in specific areas rather than be deployed across entire organisations.