Oracle’s NC relaunch – Its not about winning, its about taking part

2000-07-06

Guess what? An Oracle spin-off company is to launch a new type of computer, called the Network Computer. Hang on – haven’t we heard this before? Let’s just check the facts before we go on.

Oracle first attempt at the NC came in 1996, hot on the heels of the negative press the PC was receiving. Total Cost of Ownership was the name of the game – the PC was turning out more expensive than its list price had implied. It is academic whether Larry Ellison was driven by a brave new world vision or by a desire to kick Bill Gates while he was down: in either case he failed. Microsoft’s Zero Administration Initiative may have been a fig leaf, but it served to allay the overhyped fears of the time. In any case, the momentum behind the Windows-based PC has proved unstoppable.

We knew in November last year that Oracle would be relaunching the NC. Surely the company can’t still be chasing the rainbow of preventing its greatest rival from taking over the world? It is fair to say that the landscape has changed considerably over the past four years – the Internet has arrived and shaken up IT vendors, end-user businesses and consumers alike. You’ve read the stories before, involving great riches but – oh look – some failures too. You know that the future lies in devices and appliances, and that anything goes in the thin client world of the browser-based Internet. You know that services are moving more and more online, what with eCommerce hosting, electronic marketplaces and the stealthy arrival of the Application Service Provider or ASP. Against this background, Oracle’s NC has become an Internet access device, a Net appliance promising a low-cost point of entry to the Web. The question is – will it succeed?

There is no shortage of companies bringing consumer Net appliances to the market. Companies like Netpliance, who only last week increased the price of its I-opener device from $99 to $399, not to mention Intel and Emachines are all sure that a market exists for “pure” net devices, that is computers which can do little but access the Web. One thing is for sure: this market can only exist if consumers have high-speed Internet access – this may be true for cable or ADSL connected users, but these are not yet in the majority even in the United States. In the UK, ADSL trials may have started but the general roll-out is not expected to complete before June next year. In the meantime, companies such as The Free Internet provide 0800 ISDN access for a one-off yearly payment. The second issue is whether the range of services currently offered on the Internet is an adequate replacement for software packages on the PC. Online games still require users to install software; the Microsoft standard word processor is not yet available to consumers over the Web.

For organisations with a budget, such as corporates and government/educational establishments, the NC model starts to make more sense either for companies running a server-based computing model or for those trialling ASP services. Even then, a Citrix-style model is currently needed to ensure that all required applications can be provided over the wire: this model will not suit all comers.

There can be no doubt about the validity of the thin client model. What is less certain is the maturity of the server side of the equation. Even once thin client becomes the dominant model, there is little reason why Oracle should win the lion’s share of the device market as one of the key factors is the interchangeability of devices. Oracle may well succeed in increasing the momentum behind Net appliances, but it is unlikely to claim the market for itself.

(First published 6 July 2000)