Follow Up: HP and the Thin-Client Marketplace

The November 10 issue of Thin-Client UPDATE reported that HP was endorsing NCD as its preferred supplier for HP’s "full portfolio of thin-client offerings." As promised, here’s a follow-up, which I derived from hashing out the details with HP and NCD press organs and a source inside HP. The original NCD press release was partially true, but misleading.

First, yes, HP does seem to be getting out of the terminal side of the thin-client computing market. The company is dropping the Entria line of Windows-based terminals (WBTs) before shipping them, and folding its thin-client resources into the NetServer division. However, this news doesn't imply that HP is getting out of thin-client computing altogether. Rather, its focusing on the server side of the equation and on the "e-PC corporate appliance," intended to provide the functionality of a PC with the small form factor, simplicity, and reliability of an appliance. According to Andrea Bass, worldwide public relations manager for HP’s business PC organization, the reason for the change is that HP customers demand is higher for PCs than for terminals. Additionally, the terminal market is getting very crowded (as I experienced first-hand while choosing WBTs for a review to appear in Windows NT Magazine next April) and doesn’t offer the same profit potential that the server side of the equation does. Considering that HP is an established brand for servers, the company's decision to focus on terminal servers makes sense. However, HP will continue to offer its rebates until the end of 1999 (as previously reported) and support training for thin-client computing.

What about NCD getting all of HP’s terminal business, ranging from X terminals to Windows-based terminals? This news appears to be partially incorrect. First, according to Bass, NCD and HP have no relationship. They’ve been in talks about a reseller agreement but haven’t yet formalized the relationship. Second, an HP source reports that the company recommends NCD for its customers needing X terminals and Wyse for customers needing WBTs. Because Wyse was supplying HP with its WBTs already, this isn’t a surprising move. In short, if the original plan goes through, NCD gets part of the terminal business and Wyse another part, and HP will continue to make its terminal servers and begin work on its e-PCs.