Big firms battle in new network computer arena

First came the battle of the browsers. Now comes the war overnetwork computers.

Not content with fighting to dominate the Internet, several ofAmerica's top computer companies this week are opening a second frontto try and take control of millions of desktop computers used bybusinesses around the world.

Yesterday Microsoft Corp. and Intel Corp. announced a plan tointroduce a new kind of "network computer," a cheaper, simplerversion of today's personal computers. Intel and Microsoft promisedthat the new NetPC design would be cheaper to buy and to maintain.In addition, Microsoft said it would revise its Windows NT andWindows 95 operating systems to make it easier and less costly tomaintain networks of desktop machines. Microsoft and Intel citedsupport for their initiative from a number of major computer firms,including Digital Equipment Corp., Hewlett-Packard Co., DellComputer, Gateway 2000 and Packard Bell.The Microsoft-Intel announcement seems designed to counter asimilar move expected to be announced today by Sun MicrosystemsComputer Corp. In New York, Sun will demonstrate a machine based onprocessor chips designed especially to use Sun's Java programminglanguage. If the Sun NCs gain favor, they could cut into the salesof Microsoft's Windows operating systems and software, and also harmsales of computers that use Intel's Pentium microprocessor chips.Sun plans to reveal a list of major companies that plan to use itsNCs. Among them are the railroad company CSX Corp. and theflower-delivery network FTD.Microsoft and Intel said they would finalize the basic design oftheir NetPC machines by the end of the year. HP expects to offer aNetPC device sometime in 1997.At first glance, the NetPC seems little different from atraditional desktop machine. It will include a Pentium processorwith a clock speed of at least 100 megahertz, 16 megabytes of memory,and the ability to play audio files. But its hard drive will be usedonly for storing data files; any software used by the computer willbe stored on a remote server instead. The NetPCs won't haveexpansion slots for plugging in extra features like an internalmodem, and its case can be locked to prevent the theft of thecomputer's internal memory chips.In addition, Microsoft is launching its Zero AdministrationInitiative for Windows, a plan to make it easier to update andmaintain software on networks of computers using Windows 95 andWindows NT. Under zero administration, network managers will be ableto limit the ability of a computer user to alter files or install newsoftware of his own. When new software is added to the network, eachdesktop machine will download it automatically. That way, allmachines will have the latest versions of programs, without the needfor network managers to check each machine.The goal, said Microsoft vice president of marketing Richard Tong,is to reduce the labor costs of maintaining a desktop computer."We've been hearing for quite a long time that we need to reduce thecost of computing," Tong said.Still, until recently, neither Microsoft nor Intel expressed anyinterest in making inexpensive NCs. But corporate computer usershave begun to resist increases in the cost of computing. "There isan assumption, I think, that the industry holds, that they can justkeep increasing the features and functions of software, soessentially to run the software you have to buy a new computer everytwo years," said Nina Lytton, president of Open Systems Advisors, aBoston computer consulting firm. "I don't think that isjustifiable."Sun Microsystems and the database software maker Oracle Corp.tapped that discontent when they promised to build cheaper, simplerdesktop machines that didn't rely on Microsoft programs. Oracleyesterday said it would bundle software from Netscape CommunicationsCorp. with its NC, which is to be unveiled next week. Oracle says itplans to begin selling NCs next year. Meanwhile, IBM Corp. joinedthe trend, launching its own NC line last month.Sun, Oracle and IBM have said their NCs will cost significantlyless than traditional PCs. The cheapest IBM NC costs $700. But PatGelsinger, vice president and general manager of Intel's Internetgroup, said the Intel NetPC would cost only slightly less thantoday's Intel-based machines. The real savings, Gelsinger said,would come from lower management costs.Despite the clamor for cheaper computing, it's unclear how largethe market for NCs will be. Lytton thinks the devices will catch onin many offices, but will not supplant the traditional personalcomputer. "No technology comes in and outright replaces somethingelse," Lytton said, "because the one that's under attack respondswith improvements."Robert Womack, director of technology at Hale & Dorr, a majorBoston law firm, has made no commitments to adopt NCs, but he plansto evaluate the technology. "We at least kick the tires of thingsthat we think might help us practice more efficiently," Womack said.But Michael Prince, chief information officer at Burlington CoatFactory in Burlington, N.J., said he's eager to start deployingnetwork computers at his company, which has 17,000 employees andabout 250 stores nationwide. "We think that we can more effectivelymanage the NCs than we can PC-based workstations, that the cost ofmanagement will be lower, and they promise to provide a wide range offunctionality that will be satisfactory for the people we'll begiving them to," said Prince.