Are Network Computers The Way To Go?

The bare-bones machines are virtually glitch-free, but there are plenty of drawbacks

Brian Littleton thinks nothing of troubleshooting complex industrial heating and air-conditioning systems. But he was tired of troubleshooting the 12 personal computers at California Hydronics Corp. in Hayward, Calif. "The hard drives would be full, and `this' wasn't compatible with `that,"' says Littleton. "They were getting to be a real maintenance problem." So he decided to try a cutting-edge technology that promised greater simplicity: network computers. Tethered to a network, the $649 machines from IBM can't be fooled with. There's no hard drive, floppy disk, or CD-ROM. In short, no way to screw up the machine by loading incompatible software, or worse, by introducing a virus.

Littleton isn't alone in his quest for an alternative. Many small businesses are discovering the pitfalls of PCs: They're not easy to operate, and they're expensive. A single desktop computer can set you back more than three times the sticker price when you factor in hidden costs such as maintenance, training, and software upgrades. What's more, as Littleton has found out, PC makers haven't lived up to the promise of plug 'n' play, a technical standard that is supposed to make tasks such as connecting a scanner or running project-management software work smoothly straight out of the box. Plug 'n' pray is more like it.

So what's a small business to do? Proceed with caution. While network computing may look like an attractive option worth keeping an eye on, it's new technology. And so far, it doesn't live up to its billing for simplicity and lower costs. Sure, some businesses are making the switch because they believe in the long run they can save money and have tighter security over company data. But unless the PCs at your company are totally out of control, a small business shouldn't get into it right now. Besides, prices of traditional PCs are falling. And some makers, such as IBM, are offering new software that will take the pain--and some of the cost--out of managing desktop computers.

Today, the most radical departure from the PC is the so-called network computer, one of three centralized computing options. Much like mainframe terminals common in an era gone by, most of the control over each network computer resides in a central location--a computer server. That's the best way to tackle runaway support costs. Unlike PC users, operators of network computers (NCs) cannot load programs onto their machines. Rather, they fetch them from a central computer, if permitted. No more viruses infecting the computer because an employee was using a contaminated diskette. And as envisioned by its champions--Sun Microsystems, Oracle, and IBM--the NCs would be cheaper to build because fewer parts are needed. Ultimately, NCs could be constructed without using Intel chips or Microsoft programs.

That's why Microsoft Corp. and Intel Corp. are backing two other schemes. First, there's what Microsoft calls Windows-based terminals. Simply put, this software supports a variety of familiar devices, ranging from the PalmPilot pocket computer to desktop machines operating the popular Windows 95 or Windows NT. The choice is up to the user. But you'll need a version of Microsoft's Windows NT operating system on your server.

Then there's the NetPC. Microsoft, Intel, Compaq Computer, and Dell Computer have designed a stripped-down PC for networks. At about $1,000, NetPCs are supposed to be cheaper, yet familiar to PC owners. Designed for work that requires less flexibility--say, repetitive tasks such as filling out forms--the NetPC is a slimmed-down Windows PC with fewer expansion slots and a hard disk drive, but no CD-ROM or floppy. In other words, forget about loading your favorite screen saver.

TRICKY. What do these approaches have in common? They offer a way to cut the cost of desktop computers by dramatically reducing the amount of time companies spend tending to PC maintenance and upgrades (chart). "It can cost $10,000 a year to own a PC, if you count technical support and how much time an end user spends trying to fix something on his PC," points out Michael Silver, an analyst at Gartner Group Inc., a Stamford (Conn.) research outfit.

It was just such problems that led Littleton to replace his PCs with NCs. But this small-business owner discovered early this year that network computing is not necessarily a matter of effortlessly plugging in some inexpensive devices that employees use to fetch company data and applications. It can be complex. So Littleton hired a consultant, ea software Inc. in Rancho Cordova, Calif., to do the job. "It would not have been efficient to do this ourselves," says Littleton, chief executive of the 45-person company.

Littleton estimates that the $80,000 project cost him about $20,000 more than he would have spent had he chosen PCs. The reason? The inexpensive network computers--in Littleton's case, the $649 IBM Network Station--represented only part of the equation. The job also required complicated software work on the server computers, which are the back-end workhorses that control the network boxes.

That's why it is better, experts say, to call in a computer consultant or systems integrator. Installing equipment yourself may seem like a good way to save money. But networks can be tricky. And if the network crashes, unlike with stand-alone PCs, you can't simply reboot a machine and go on working.

In the long term, NCs are meant to run software written in Java--a programming language developed by Sun that promises to allow applications to be pulled off a network and run on any type of computer. Software companies, however, don't yet offer many Java-based programs such as spreadsheets, word processors, presentation graphics, or database applications. And it could take years before there's anywhere near the volume that exists for Windows.

BOTTOM LINE. For now, Windows still rules the desktop. Anne E. Biedel & Associates installed nine Windows-based terminals from Wyse Technology Inc. in its family medical practice in Port Townsend, Wash., 40 miles northwest of Seattle. Jim Biedel, the company's systems operator, says the company uses the devices--including two wireless models--to retrieve 2,000 patient records from desk, exam-room, and remote locations. Biedel built his own $5,500 server and spent $800 for each of the seven wired terminals--and $2,600 apiece for the two wireless boxes. He also spent $2,000 on other network gear. "For the small business, this is going to be the way to go," says Biedel.

Of course, there's no substitute for familiarity. At least that's what PC makers Compaq, Dell, and Hewlett-Packard were thinking in June, when they announced plans to offer NetPCs by yearend. Only Compaq and Gateway 2000 have NetPCs on the market so far. Meanwhile, companies such as IBM and Micron Electronics Inc. are backing away from earlier plans to bring out NetPCs. Instead, they'll modify the existing PC and give it the features of a NetPC--namely, software that makes it easier to distribute and troubleshoot applications. The bottom line: With rapidly falling prices for traditional PCs--entry-level models can be had for about $1,000--NetPCs seem less attractive.

In the end, desktop computers may not be getting tremendously easy to use, but at least they're getting a little less expensive to run.