March 31, 2000 4:50 PM PST

Wyse wants to put thin clients in the home

Wyse Technology, the leading maker of dumbed-down computers known as thin clients, is retooling its product line for the home market.

The shift will be a significant change in direction for the company, whose products currently are used by businesses that see thin clients as a cheaper, easier-to-administer alternative to desktop PCs.

Wyse plans to sell the new Internet-enabled devices through telecommunications companies, banks and entertainment companies that will label the products as their own, said Jeff McNaught, vice president of marketing.

Shifting strategies is nothing new for Wyse, a company that once had its main business selling the basic computer terminals that were the precedent for today's thin clients. Wyse then took an unsuccessful turn at selling the PCs that replaced them.

After a foray with thin clients using Sun Microsystems' Java software and then the Linux operating system, Wyse has settled on a special versions of Microsoft Windows or its own operating system.

Wyse, while not selling as many machines as PC companies such as Compaq, still does a respectable business, said International Data Corp. analyst Eileen O'Brien. The expansion into the home market, combined with some new corporate products, should boost Wyse's presence, she said.

"With the new products, they're going all the way from your simplest, thinnest Windows-based terminal to (a product) which is pretty close to a PC," she said.

Wyse has been clever in expanding into new areas, converting its older terminal customers into buyers of newer products, she said. "Wyse has been pretty savvy in this market."

Wyse is beta-testing its home-oriented Internet appliances, code-named "Blazer," and plans to introduce them within 90 days, he said. They use National Semiconductor's system-on-a-chip Geode chips and a proprietary Wyse operating system that's carefully written to minimize the computing burden of the servers to which the Blazers are attached.

In coming years, Wyse expects to sell more of the home-oriented devices than corporate thin clients. The Blazer is specifically set up for streaming audio and video, which current low-end Internet appliances can't handle, McNaught said.

But Wyse will be entering a crowded arena. Just about everybody, including consumer electronics giants, established PC companies and many start-ups, is coming out with a limited-purpose home computing appliance.

With new thin clients coming from Sun Microsystems, Neoware, Hewlett-Packard, IBM and Compaq, the corporate market is no walk in the park, either.

Wyse shipped 262,000 units in 1999, McNaught said. O'Brien expects the overall thin client market of 700,000 units to grow to 10 million by 2004.

The company uses Windows CE in its low-priced machines, McNaught said. Its more powerful ones use Embedded Windows NT, which is more powerful but requires more expensive hardware.

Wyse introduced a Linux-based thin client last year but will be phasing out that machine because Linux didn't have adequate support from companies that made bar-code readers, scanners, printers and other hardware with which the thin clients had to be able to communicate.

"Linux wasn't really the right solution," McNaught said. "I think Linux is going to be a huge deal on servers, but what we found out was it's too limiting on clients."

The foray into Linux did, however, give Wyse enough leverage to persuade Microsoft that a version of the Internet Explorer Web browser would be a major improvement to the Windows CE machines, he added.

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Wyse Technology Inc., thin client, home market, Internet appliance, Linux

 

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