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Technology Stocks : How high will Microsoft fly?
MSFT 481.60-1.7%2:18 PM EST

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To: Ibexx who wrote (5735)4/10/1998 11:23:00 AM
From: Flair   of 74651
 
Ibexx & all,

Windows terminals about to catch fire
By Joe McGarvey, Inter@ctive Week Online
April 10, 1998 5:58 AM PDT

zdnet.com

The Spring Comdex computer show, which is
to be held in Chicago starting April 20,
will be the unofficial coming-out party
for technology from software giant
Microsoft Corp. that enables underpowered
personal computers to control
Windows-based applications running on a
sever.


In addition to providing a venue for a
demonstration of Microsoft's (MSFT)
forthcoming Windows Terminal Server,
which enables the Windows NT operating
system to distribute server-based
applications to multiple users, some
analysts and industry insiders said the
event will also serve as an occasion to
crown Microsoft's victory over the
Java-based network computer (NC)
movement.
Will cheaper hardware -- Windows
terminals, ncs or low-cost desktops --
really reduce overall costs.

"Our position is that Microsoft will win
this game," said Michael Kantrowitz,
executive vice president of Neoware
Systems Inc., which makes a computing
device, a so-called Windows-based
terminal, designed to run Windows
applications stored on a server.
"Companies don't want to replace their
Windows applications and rewrite them in
Java. They want to use what they already
have."

Microsoft first proposed its
server-centric approach to personal
computing last year, largely as a
defensive move to protect the dominance
of the Windows operating system in
corporate environments. Feeling
threatened by the growing support behind
the network computer, an inexpensive
computing device that runs Java
applications downloaded from powerful
servers, Microsoft announced it would
build a multiuser version of Windows NT
that would distribute Windows
applications to scaled-down PCs.

Microsoft usurped much of the NC's
momentum by providing corporations with
the means to reduce the cost and
complexity of routine maintenance by
placing the bulk of processing power on
centralized servers. The key to the
projected success of Windows terminals,
however, said Eileen O'Brien, an analyst
at International Data Corp., is that it
enables enterprises to reap the rewards
of the network computing model without
giving up access to their Windows
applications.

The sale of hardware designed to run
distributed Windows applications is
expected to start slowly, with only
302,000 terminals sold to corporations in
1998, according to O'Brien. By the middle
of the year, however, when Microsoft is
expected to release the commercial
version of its Windows Terminal Server
product, O'Brien said the sale of Windows
terminals should pick up, reaching more
than 5 million units in the year 2002.

Although O'Brien said she believes the
Windows terminal market will account for
only about 10 percent of personal
computers sold to enterprises, others
think penetration percentages could be
twice that.

Chad Gibbons, product manager at Windows
terminal maker Boundless Technologies
Inc., said that in addition to being a
replacement device for mainframe
terminals, Windows terminals will be
deployed as substitutes for full-blown
personal computers that are primarily
used for productivity applications, such
as a word processor or a spreadsheet
program.

Boundless, much like Neoware, Wyse
Technologies Inc. and other terminal
makers, has diverted plans to build
Java-only devices to concentrate on
Windows terminals, which start at about
$250 and should be unveiled at the Spring
Comdex show.

Despite the apparent momentum around the
Windows terminal market, O'Brien said
several questions have to be answered
before enterprises are likely to adopt
the technology.

John Frederiksen, group product manager
for Windows Terminal Server, said pricing
has yet to be set but that it will not
cost customers more to run Windows
applications from a terminal than it does
from a standard PC.
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