HDS Network Systems Inc. will try and play both sides of the field when it launches its new netOS operating system and NeoStation terminal next week.

Users will be able to run the company's system as a Windows terminal or as a network computer, using a software upgrade. HDS, based in King of Prussia, Penn., has already signed up a major licenser for its netOS, Hitachi Data Systems Corp., which will take the HDS name along with the OS license.

The company's new name will be Neoware, said Michael Kantrowitz, executive vice president of HDS. He said that the name change was not related to the licensing deal, but added that it would clear up confusion.

The new OS -- which will be released Monday and comes in three versions -- is based on an ultra-thin "Windows terminal" that runs everything on the server.

Microsoft Corp. is developing a protocol for such a terminal. Although Microsoft hasn't yet released that specification, Kantrowitz said the netOS for Windows terminals uses technology endorsed by Microsoft, such as making connections through the ICA protocol.

Microsoft's WinTerm specification is partially a response to the network computer specification proposed by Oracle Corp., IBM and Sun Microsystems Inc. Both specifications are designed to let administrators closely manage users' terminals while keeping costs down.

Neoware was the first company out of the gate with a system that confirmed to the network computer specification. And its new OS can be upgraded to a device that meets NC reference protocol, including Java, a browser and the ability to send and receive E-mail via software plugins.

"There's a war going on right now between two parties. Microsoft has the [Intel- driven] NetPC [spec] and WinTerm, but those devices are intended to protect Windows. The other vendors are what we call 'anything but Microsoft,' they depend on Java, and their strategy is to have software developers rewrite everything in Java," Kantrowitz said. "Our strategy is to run the best of both worlds."

The strategy is likely to work, said Greg Blatnik, vice president at market researcher Zona Research Inc., in Redwood City, Calif.

"Ultimately, it's a fairly comprehensive move for them. They're covering the bases essentially, across these various classes or types of thin-client products," he said. "It gives a solution for people that want to consider one or both of these choices."

Neoware will produce its own thin client, the NeoStation, available with all three OS versions. It will cost $649 with netOS for Windows, with upgrades to the enterprise version for $50, and to the NC version -- the netOS for intranets -- for $75.

The licensing deal with Hitachi is important as well, Blatnik said, since that company has a very large installed base of mainframe customers it is looking to supply.

"Hitachi has historically worked with a number of companies to provide peripherals that could be used by its customers," he said. "The situation is certainly one where the benefits for HDS could be very strong."

Source: ZDNet News