Friday, September 12, 2008

Cloud Computing Expo - NComputing & its Disruptive $70 PC

NComputing claims to be "revolutionizing computing"
Sep. 12, 2008 02:00 PM

IDC doesn't recognize the company that claims to be the leading thin client house on the planet as a through and through thin client company.

Seems two-thirds of it doesn't fit IDC's standard definition of what a thin client should be.

However, that quirky little factoid hasn't stopped NComputing from seeing over a million of its widgets deployed in the 20 months since it came to market and becoming, by all accounts, the fastest-growing desktop virtualization outfit around.

NComputing claims to be "revolutionizing computing."

Okay, all the boys say that but NComputing's appeal, particularly in emerging markets, home to the so-called "next five billion," is its promise of a $70 PC, a price point that has so far eluded such competitors as One Laptop Per Child (OLPC).

For instance, it was NComputing - not OLPC - that captured the first 1:1 country-wide education deployment, which happened to be in Macedonia, whose 180,000 student seats now constitute the largest known thin client deployment ever. It is also the largest known desktop Linux deployment ever even though NComputing's virtualization solution is built on Windows.

NComputing reportedly came in at half the next lowest bid and that includes all the hardware, the transportation, setup, training and maintenance.

What had to have pushed Macedonia over the edge is the fact that NComputing's proposition is sustainable: its users only consume an eco-friendly watt of power and the widgetry will never be obsolete.

NComputing's siren song has attracted commercial accounts like FedEx, CSC, Lear, the World Trade Organization, Carrefour, Cigna, Remax and Flextronics among its user base of 20,000 organizations in 90 countries.

The start-up now boasts an annualized run rate of over a million units. It says it's expecting orders of 10,000 units a clip starting this fall and is expecting to fulfill 7% of all K-12 public school purchases in the US this year, pretty good for a new arrival with only two rounds and a $100 million valuation to its name.

Its siren song also attracted Will Poole, the co-head of Microsoft's Unlimited Potential and former boss of Microsoft's Windows Client Business, whose enviable position gave him the pick of the litter.

Poole, who created Windows Starter - now at seven million sold in emerging markets - and championed détente with OLPC - the Windows version of its XO will be out any minute now - is retiring from Microsoft at the end of the month and says he wants to give something back.

He wants a shot at saving the world by resolving some of the global development issues. And he's going to use NComputing, where he will be non-executive co-chairman and ambassador to developing countries, as a platform while he figures out what he wants to do next.

Poole, by the way, has some money in the company.

What NComputing does is take a bog-standard PC and hang terminals off of it. It figures PCs are so powerful today that most applications only use a fraction of their capacity.

It taps that under-utilized capacity and can put, say, 10 users on a $500 Dell Inspiron reportedly with no discernable latency.

NComputing CEO and co-chair Stephen Dukker, the fast-talking, golden-tongued founder of eMachines, who's been down this disruptive, low-cost road before, says the company's widgetry, stored in a black box that has no CPU, memory or moving parts, doesn't try to eliminate the latency, it compensates for it.

The mojo was developed in Germany by an outlet called HydraPark that was determined to make Citrix eat its dust. NComputing, which got started in 2003, bought the Citrix-killer and from that its vSpace desktop virtualization software and User eXtension Protocol (UXP) were born.

NComputing offers two species of its technology: the X-series and L-series run on Windows Server. (Warning: NComputing won't be as cheap for commercial accounts as for education given Microsoft's licenses.)

The X-series is the cheaper, your basic 70 bucks a head on a one-watt-per-user budget. It uses a direct 10m connection between host and user, which limits it to no more than seven users per PC on X300.

In this case the host - which needs a special card - which is why the X-series doesn't qualify as a thin client as far as IDC is concerned - can be something as simple as a $350 Dell Vostro 200 with a 2.4GHz Core 2 Duo chip, 1GB of RAM and a 80GB HDD.

It offers Internet access, full multimedia, office productivity and presentations.

The pricier L-series uses an Ethernet connection so it has no distance limitations and can service up to 30 users per desktop PC. It runs $140 per user and demands five watts per seat to run.

Figure a $499 Inspiron 530 with a 2.4GHz quad core, 3GB of memory and a 500GB hard drive. Now imagine it simultaneously running four videos off the Media Player, four IE sessions, two IE sessions with streaming video, four Excel sessions, three Word sessions, three Acrobat Reader sessions and nine PowerPoint sessions.

Dukker says two-thirds of his customers are using the X-series, the rest are on the L-series; 60% are running Windows, the rest Linux.

Dukker figures where OLPC made its mistake was in expecting the user to fend for himself once the XO arrived.

NComputing's business model, a job creator at least in the third world, is 100% channel. The reseller gets a 30% margin but is required to deliver the goods, set up the site, support the darn thing and train the users. Dell is part of the channel.

NComputing, which has 150 people worldwide, now has offices in 14 countries including India, Brazil, Korea and Mexico and roughly 50% of its business comes from emerging markets.

NComputing, by the way, calculates that if the 850 million PC worldwide were replaced by its gismo energy use would decline by over 120 billion kilowatt-hours, the equivalent of planting 460 million trees.

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