The war of words and egos began when Oracle Corp. Chairman Lawrence J. Ellison announced plans last September to create a $500 "Network Computer." A cheap device that runs simpler, easier-to-use programs transmitted via the Internet? Can't be done, snapped critics. Even after Ellison demonstrated a prototype in February, they scoffed at the price. Sniffed Microsoft Corp. Chairman William H. Gates III: "It's a fantasy."
Not for long, perhaps. On May 20, Oracle, Sun Microsystems, Netscape Communications, and IBM will announce a set of software standards to elevate Ellison's plan beyond the fantasy stage. The goal: to enable any NC to access any material on the Net--which could persuade software developers to write programs for NCs just as they did for personal computers. Sun, IBM, and a half-dozen other manufacturers--including TV maker Mitsubishi and computer maker Olivetti Group--pledge to build devices bearing the NC imprimatur starting this fall (table).
BARE BONES. The big names, and their bucks, will help NCs challenge PCs as the universal digital appliance. They won't all be $500--some will cost more than twice that much--and they won't make a dent in PC sales any time soon. Moreover, other sorts of so-called Internet appliances abound. But for the first time since Apple's Macintosh appeared, there's a clear, widely supported alternative to the "Wintel" standard--PCs based on Windows software and Intel Corp. chips. Boasts Ellison: "There will be more NCs sold by the turn of the century than PCs." He plans shortly to spin off Oracle's NC software-development unit, dubbing it Network Computer Inc.; by 2000, he predicts, NCI will post annual revenues of several hundred million dollars.
That's a fairly grandiose vision. The NC standard won't be done until August, and some partners are still fuzzy on specifics. Conspicuously absent from the initial list of backers, moreover, are Microsoft, Intel, most big American PC makers, and major U.S. phone companies that would provide links to the Net. "How much of it turns out to be hype vs. major industry transformation remains to be seen," says Michael D. Culver, senior director of product management at PC maker Acer America Corp.
Still, the NC comes at an opportune time. U.S. household penetration of PCs, at about 33%, isn't likely to budge soon, says market researcher Dataquest Inc. And consumers are demanding cheaper, easier-to-use devices than today's PCs, says Richard Finkelstein, president of consultant Performance Computing Inc. The NC will strip the PC to bare bones, often using a TV for a display and nixing disk drives. Massive programs won't be installed as on PCs. Instead, large computer "servers" will zap programs written in Java, Sun's network software, over the Net to run on the NC.
Java programs run on any chip or operating software, so NCs can take almost any form. For corporate markets, Sun will build traditional desktop PC-style boxes using a lightweight Java operating software code-named Kona. Phonemaker Uniden Corp. plans cordless computer-phones with Internet access. Mitsubishi and Akai Electric Co. plan TVs with built-in Web browsers.
Businesses likely will be the first buyers because they have the necessary high-speed networks already in place. Bank teller machines and airport reservations systems, for instance, don't need all the PC's smarts--and NCs, which can process data locally, can perform transactions faster than dumb terminals. "We want to use 'em all over," in distribution and accounting centers, says Michael B. Prince, chief information officer for Burlington Coat Factory Warehouse Corp. in Burlington, N.J.
Consumers may take longer to convince. Even at $500, NCs aren't impulse items. More than that, browsing the Web via even the fastest modem can be like watching paint dry--and TV screen resolution is far worse than PC monitors. Meanwhile, video-game makers are jumping in with machines featuring Internet access, and the PC camp is fighting back, too. Microsoft is exploring ways to make PCs cheaper--including pared-down Windows software--and easier to use. Gates insists: "The PC is moving very fast." Ellison's NC will have to move even faster.