CEO Guide to Technology

Companies Seek PC Alternatives


Special Report January 5, 2009, 12:01AM EST

Companies Seek PC Alternatives

To cut costs and go green, businesses are toying with PC substitutes such as small devices that tap virtual desktop software

PCs are so 2008. Computer users are warming to personal computer alternatives, including netbooks, handheld mobile devices—and in a growing number of cases, machines that work in tandem with so-called virtual desktop software, a technology that makes it possible to deliver desktop software and files from another location like a data center.

That was the case for Mark Lopez, an IT manager for auto-parts maker Lear (LEA). When he set about finding less expensive alternatives to the PCs in use in Lear's factories, he turned to devices made by NComputing that effectively let multiple workers share a single PC.

Here's how it works: Each user has a monitor and keyboard, but instead of a hard drive, there's a small device about the size of a potholder attached to it. Those small devices, in turn, connect to one PC with special software that lets as many as 30 people share one computer. "The users don't notice any difference," says Lopez, who adds that about 400 people in 17 factories at Lear are using NComputing's devices. Those devices cost $150 to $200 per user, far less than the cost of buying a new PC. Lopez figures that PC alternatives have saved Lear about $125,000.

Little Gizmo Called a Thin Client Even as PC prices drop, some companies are finding that they still want lower-priced alternatives. As enterprises begin to experiment with virtual desktops, some are discovering they don't necessarily need to give workers a full-fledged PC.

A commonly used PC alternative is a stripped-down machine called a thin client. "Typically, thin clients are not as cheap as the very cheapest computers but they're cheaper than the midrange computers" says John Burke, principal research analyst at consulting firm Nemertes Research. Since these devices involve fewer components, they draw less power and tend to last longer as well, which can contribute to cost savings, he adds.

Consulting firm IDC predicts that the worldwide thin-client market will grow from 2.9 million units in 2007 to just over 7 million in 2012, and revenues will double from just under $1 billion in 2007 to just under $2 billion in 2012. The regional dominance of the U.S. and Western Europe in this market will start to give way to Asia/Pacific, and by 2009 that region will be the largest market for thin-client shipments. To be sure, thin clients and other PC alternatives still make up a fraction of the PC market, pegged by IDC at about 268 million in 2007. The figure includes portables, desktops, and x86 servers.

A number of other alternatives to full-scale PCs have popped up in recent years from companies such as ClearCube Technology, Hewlett-Packard (HPQ), Lenovo, Pano Logic, Wyse, and others. Sun Microsystems (JAVA) has been selling PC alternatives for years.

Saving on Electricity St. Vincent's Catholic Medical Centers is toying with PC alternatives as part of an effort to go green. "We have about 5,000 workstations out there, and a traditional PC sucks up about 150 watts per PC when it's fully running," says Kane Edupuganti, director of IT operations and communications at St. Vincent's. In September, St. Vincent's began experimenting with pared-down PCs from Pano Logic that use only three to five watts of electricity. St. Vincent's is testing about 100 devices from Pano Logic that work with VMware virtual desktop software. Already Edupuganti has noticed some benefits. It once took him four to six hours to get a PC up and running for a new employee, but with the Pano Logic device it takes only 30 minutes. He also saves about $300 vs. the cost of a traditional PC, but he expects that savings is actually more when management costs are factored in.

In the manufacturing sector, PC alternatives like NComputing's devices can also be less sensitive to dust, dirt, temperature, and vibration extremes, partially because they have fewer components. So far, the devices have worked well in Lear's factories, says Lopez. The next time he needs to replace desktop computers, Lopez says he will definitely consider NComputing.

King is a writer for BusinessWeek.com in San Francisco.


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