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Meanwhile, IDC believes that more than a 1.2 million thin clients will ship in 2010, an increase of 20 percent over 2009. Sounds great if you have a short memory. Anyone paying attention to this market sector has heard this before. IDC made many similar bold predictions in the past.
For instance, in 2003 IDC predicted that the market would expand to 3.4 million units by 2007. Obviously, growth lags behind earlier predictions.
This isn't meant to beat up on IDC. Sure, they were overly optimistic, but so was everyone else. Other analysts and such vendors as Oracle, Sun and Microsoft all made similar proclamations.
What's different this time? Several things. First, the in-the-office-all-day-long workforce is becoming a thing of the past. Next, broadband penetration is up, even if it still lags behind were it should be in the U.S. Smart phone adoption is also up, meaning more and more end users are getting comfortable accessing the Internet on devices other than PCs.
Meanwhile, organizations are beginning to realize that virtual desktops may be a heck of a lot easier to secure, manage and maintain than full-blown ones.
Finally, the biggest factor benefiting thin clients is the convergence of virtualized infrastructures with cloud computing. This technology perfect storm means thin client adoption is a "when," not "if" scenario. As the market evolves, will today's thin-client leaders, such as Wyse, NComputing and Pano Logic, gain the same sort of brand recognition that Microsoft, Apple and HP do today?
It's too early to tell, but what we do know is that the following five vendors are well positioned to take advantage of this burgeoning market.
Why they're a thin client leader today: HP's acquisition of Neoware in 2007 vaulted them to the top of the thin client market. Gaining market share via acquisition doesn't necessarily make you a "leader," if the definition of "leader" you're using is synonymous with "visionary." In this case, however, HP both gained market muscle and displayed insight.
With many of its hardware platforms threatened by the looming post-PC era, HP has taken steps to help it avoid repeating the mistakes IBM made in the 1980’s and 90’s.
Why they could be on top in years to come: Versus the other competitors in this market, HP's main advantage is its sales channels. Others, such as Wyse, may have been playing the thin client game for longer, but they'll have a tough time reaching the same number of customers. While other competitors are hyping up “zero clients,” HP is focusing on “mobile thin clients,” which we see as a smart move. The zero client concept certainly has its appeal, but not quite the raw appeal of “mobile.”
HP’s mobile thin clients are basically laptops preloaded to work with virtualized environments. Not terribly revolutionary, but HP seems to be positioning itself to push the virtual desktop to other mobile devices as the market matures.
While the zero client message is tailored for enterprise customers, mobile clients appeal to businesses and consumers alike. When it comes to gadgets, innovation is often driven on the consumer side before spilling over into the enterprise, so this is no trivial distinction.
Customers: Domino’s Pizza, Seismic Micro-Technology, Noodle’s & Company, Apache Junction Unified School District and JetBlue.
Why they're a thin client leader today: Wyse was the leading thin client vendor until HP jumped ahead with its purchase of Neoware. Today, Wyse is a close number two, and according to IDC, together HP and Wyse own roughly 70% of the market.
Wyse has an impressive product portfolio, offering everything from standard desktop thin clients to mobile ones. Moreover, Wyse’s PocketCloud technology, which allows users to manage their virtual desktops from iPhones, iTouches and iPads, is ahead of anything else in the market.
Why they could be on top in years to come: Wyse’s history in this space sets it aside from others on this list. Wyse has shipped nearly 10 million thin clients, and it has been a pioneer with such innovations as OS and application streaming, zero clients and virtual clients that work with smart phones and tablet PCs.
While it doesn’t have the market muscle of HP, Wyse is well positioned to cash in on a variety of thin client adoption models, be it zero, mobile or shared clients.
Customers: Abbott Labs, Aramark, Citi, Hilton Reservations and Sears.
Why they're a thin client leader today: Rather than replacing PCs with thin clients during your next upgrade cycle, why not purchase fewer PCs, tie them to multiple terminals, keyboards and mice, and drive your replacement costs down even further?
That’s NComputing’s proposition. According to the company, today’s PCs have become so powerful that they are pretty much like supercomputers. Yet, 99 percent of all PCs users aren’t doing any supercomputing. Most of the compute- and memory-intensive things going on in the workplace, like streaming video, probably aren’t even work-related. As a result, NComputing estimates that 95 percent of each PC’s power is wasted.
NComputing has more than 2 million seats deployed and more than 100,000 users in the enterprise market.
Why they could be on top in years to come: NComputing takes a single PC and delivers it to as many as 30 users, with a price per seat as low as $70. While being the low-cost vendor isn’t always the best positioning for a technology company, NComputing’s low cost comes from a distinctly different model from competitors.
No server infrastructure, little maintenance and a small energy-consumption footprint add up to make NComputing’s solution appealing to verticals such as the government and education sectors. NComputing claims to have already captured about 15% of the US K-12 desktop computing market.
The company recently released its Numo chipset line, which “moves virtualization from the desktop and server to mobile and next-generation devices.” The $20 Numo system-on-chip is intended for non-PC devices, such as netbooks, TVs, set-top boxes and Android phones.
Customers: Big O Tires, Employee State Insurance Corporation (Indian government’s social security system), Government of Punjab Province, Pakistan and Tangipahoa Parish (Louisiana) School District.
4. Pano Logic
Why they're a thin client leader today: From a market-share standpoint, they’re not. However, this four-year-old startup is one of the most innovative zero client vendors. The Pano Device is a small (3.5” x 3.5” x 2”) black or silver cube that connects to an organization’s virtual infrastructure and supplies connections for keyboards, mice, displays and other USB peripherals.
Pano Device has no CPU, internal memory, embedded OS, etc. This is a true all-hardware zero client. Operating systems, firmware, drivers and applications are stored centrally in the data center.
The complete system includes server-side connection broker software, a virtual desktop management appliance and a client connection service for peripherals. Currently, Pano Logic supports VMware virtualized desktop environments, with Microsoft and Citrix slated for later this year or early next.
Why they could be on top in years to come: In February 2010, the company secured $20 million in Series C financing from Mayfield Fund, bringing the total raised to $44 million. Foundation Capital and Goldman Sachs are also investors.
While a stack of VC money doesn’t guarantee success, fundraising at this level in these economic times certainly looks good. Pano’s zero client system is sleek and affordable and should pose a significant challenge to others on this list.
In early March 2010, Pano Logic inked a deal with Fujitsu, under which Fujitsu will integrate Pano Logic’s zero client technology into a new Fujitsu desktop computing solution.
Customers: University of Maryland, Westerly Public Schools (Rhode Island), Boulevard Brewing, Baker Hill (an Experian company) and City of Walnut Creek, California.
Why they're a thin client today: This German company (Igel is German for hedgehog) gets more play overseas than in the U.S., but it should challenge in the North American market in the years to come. According to IDC, IGEL is the world’s leading Linux thin client vendor, and the number three vendor overall in terms of revenue.
IGEL recently released its Universal Desktop product line, a family of thin clients that maintain a single image across the entire product line. Universal Desktop allows users to mix and match various hardware models with various OSes (currently Linux, Windows Embedded and Windows CE), while also allowing users to pick and choose which client protocols they want enabled.
The benefit of this approach is that it makes it easier to find solutions that meet particular end user needs, while also making it far easier to manage and update images.
Why they could be on top in years to come: IGEL has a strong presence in the EU, and products like the Universal Desktop and its $40 thumb-drive-based Universal Desktop Converter, which turns legacy PCs into remotely managed thin clients, offer a unique spin on the thin-client model.
Customers: Miami’s Biltmore Hotel, Bridgewater College (UK), Privatbank (Switzerland), Munich Schwabing Hospital, Piper Aircraft and General Motors.
Thin Client Players to Keep an Eye on:
Even though this article is focused on hardware vendors, I’m sure I’ll get emails asking me why VMware, Citrix and Microsoft aren’t on this list. The virtualization solutions from these vendors are critical to the emerging thin client ecosystem, but they aren’t pioneering the client side.
I may also be asked why Dell, Sun and even Apple aren’t on the list. Dell should be mentioned here, since it entered the thin client marketin late 2008, but so far its traction is limited. Moreover, Dell’s struggles in the traditional PC market are a red flag.
Sun, on the other hand, bears watching. Sun introduced its Sun Ray stateless thin clientsolution clear back in 1999, and this was actually Sun’s second commercial attempt at thin clients. This is a classic case of getting to a market too early, way too early. According to IDC and other research firms, Sun lags well behind HP and Wyse in market share. However, Sun’s acquisition by Oracle gives it deeper pockets, and Oracle seems intent on being a serious VDI contender.
Finally, while Apple has never claimed to be a thin client vendor, the iPad could well be the pioneering thin client for consumers. Sure, there’s more onboard horsepower than you’d normally associate with a thin client, but perhaps the iPad points the way to a computing category that’s not quite thin, not that fat, way too expensive, but popular nonetheless.