Microsoft Corp. (Nasdaq: MSFT) plans to develop client and server software for a sub-$500 Windows terminal that will go head-to-head with network computers (NCs), according to next week's issue of Computer Reseller News. The article is also posted on Computer Reseller News Online.

"The move is a radical shift for the software giant, which has been a staunch proponent of fat clients and memory-hogging applications," writes Mary Jo Foley, Managing Editor/OnLine. "Rather than ignore the NC or develop software for a slimmed-down NetPC, Microsoft now plans to offer client and server pieces for networked thin clients."

A developer familiar with Microsoft's plans told Computer Reseller News, "Microsoft has done a 180-degree turn. They've been saying fat, thick clients are the way to go. Now they're trying to say they'll be the thinnest of the thin."

Microsoft Chairman and Chief Executive Bill Gates pre-announced the new machines last week at the Software Developers Conference in San Francisco. Gates also said support for these "Windows terminals" will be included in Windows NT 5.0.

The new machines will include a graphic display interface; a keyboard; a mouse; 4 Mbytes each of ROM and RAM; and a network interface card, said sources briefed by the company. Microsoft told customers the machines will be geared toward "task-based users" and that the whole goal is to undercut the network computer.

Adam Taylor, Group Product Manager with Microsoft's Windows Product Marketing division, told Computer Reseller News that the Windows terminals will be small devices that may or may not run some version of Windows. "It might run Windows CE or some version of Windows, or maybe something else altogether. We just don't know," he said.

One developer said he expects the Windows terminal to be little more than a display device for applets and other information stored on an NT server. "It will work like (Symantec Corp.'s) PC Anywhere. You won't need a client operating system at all," he said.

On the server side, the Windows terminal will be enabled by a set of technologies Microsoft is developing, code-named Hydra. Hydra will include the core NT server code, the wire protocol and the client-side operating environment, Taylor said.

While Citrix Systems Inc.'s proprietary ICA protocol is said to be one of those being considered by Microsoft, most expect Microsoft to instead use its own custom-built protocol or possibly one from Intel Corp., sources said.

Taylor conceded that Microsoft's Windows direct response to the popularity of network computers. "In many ways, it will be similar to an NC-type device," he said. "For certain users, a diskless, task-oriented workstation is the way to go, especially in terms of total cost of ownership discussions."

According to the Computer Reseller News article, Microsoft expects to release final details of its Windows terminal project at its upcoming TechEd conference early next month in Orlando, Fla.

"Whether Hydra and the Windows terminal actually materialize in the NT 5.0 time frame -- right now, early 1998 -- remains to be seen," writes Foley. "Some developers said that goal could be a bit ambitious."

Source: CMP Media Inc.