As major distributors prepare to stock network computers, debate continues about the future of the device.

Most distributors believe thin clients eventually will find a niche in corporate departments that want employee control, and do not require the flexibility of a multi-function computer, or those that view cost-of-ownership as a top priority.

"I think the network computer will be an interesting battle, but one that won't be won on a distribution level," said Mike Long, president of Gates/Arrow Distributing, Greenville, S.C. "It will be driven by the CEOs of corporations that are trying to have a secure environment. It might take off in a more structured environment, such as accounting or credit departments."

As most distributors do, Gates/Arrow plans to carry network computers from some of the major manufacturers, such as Intel Corp., Compaq Computer Corp., Sun Microsystems Inc. and IBM Corp., that have already entered the playing field.

Distributors interviewed do not expect major orders for NCs until at least the end of 1997. But once the machines find a niche, they said, other manufacturers will flood the market with their own versions of the stripped-down desktop.

"If that market looks like it's going to take off," Long predicted, "everybody's going to be in on it."

Merisel Inc., El Segundo, Calif., carries thin clients from Wyse Technologies Inc. and executives now are talking with IBM to carry its version, said Art Merkin, Merisel's director of technical products.

"This is an area that's a little too early to predict. But we're working with all the key manufacturers to see where their offerings are," Merkin said. "I think [NCs] will provide a great solution to certain areas of corporate America."

Martin Culbert, senior manager of product evaluation for Ingram Micro Inc.'s Technical Products Division, expects the network computer eventually to break out of structured environments and into small business and consumer markets. It eventually could compete directly against the PC, once people overcome security concerns, he said.

"The beauty of Java is that it doesn't care what software runs the computer, so the processor is no longer important," Culbert said. "Now I can make a computer whatever size I want."

Distributors view the network computer, which is expected to cost about $700 per seat, as a commodity item that does not provide much profit for VARs. Whatever margins will be available will be squeezed out of software, server and mainframe sales, they said.

"In many ways it represents issues for software rather than hardware," said Anthony Ibarguen, president of Tech Data Corp., Clearwater Fla. "If it's just a low-cost box, it won't have as much impact [on resellers] as software."

Rick Hamada, vice president of marketing for Hall-Mark Computer Products, a Tempe, Ariz.-based distributor with strong sales in IBM, Digital Equipment Corp. and Hewlett-Packard Co. servers, agrees.

"We're big fans of the network computer. The more clients that are sold, the more servers that are needed to support them," he said, adding thin clients will be sold as new seats, rather than replacements for existing PCs.

Access Graphics Inc., Boulder, Colo., is another company that will benefit from the NC. Sun Microsystems, the developer of Java and a pioneer of the NC, accounts for 75 percent of Access Graphics' sales.

Ross Churchill, vice president of the company's Sun business group, believes large accounting firms or financial institutions, where outdated software and a multitude of servers support the business, will be perfect candidates for the NC.

"There has to be a way to get them into a newer, current and more competitive environment," he said. "The network computer, with Java and all the things that go into that environment, offers an alternative.

The key to the NC's success, Churchill said, lies in marketing the concept to the corporate world's buyers of technology.

"The concept of the alternative is already attractive to the directors of enterprise computing," he said. "The next step is to show them that it can work, that it's secure, that it's effective, and that it is an alternative for the transition of their enterprise computing systems."

The employees that ultimately use NCs might be a tougher sell, some distributors said.

"I don't think the end user will stand for them," said Long of Gates/Arrow. "They might want to plug in a disc to their hard drive and the secure environment won't allow that."

Source: Computer Reseller News