Technology: A Network Computer for Your Business?

for Business and Economic Review; April 1998.

Network Computers are getting a lot of attention. Should you consider installing them?

Look at a Network Computer (NC) as two different things. First, an NC is a computer for less than $800 that allows your people to work as if they had a $4,000 computer. The NC has no floppy or CD drive and little memory. It relies on your network or the Internet for its programs and information.

Second, NCs are a highly promoted effort to either reduce the market presence of Microsoft and Intel or reenforce it.

Will any of this actually do you any good? Your vendors will offer you an NC solution this year. This column will look at the three issues to consider when you think of switching to Network Computers: money, people, and software.

What would an NC solution look like if you installed it? Your users would have something a little smarter than a terminal on each desk. The new computers get their intelligence from servers on a network or the Internet. They rely on the nets since they can do very little by themselves.


For most buyers, the first question is: "Will it save me money?" The answer is: "Not as much as advertised."

The cost to acquire an NC is low: you might save as much as $3,500 per machine. Since the software is on the network instead of the PC, you save there, too, because you are freed from upgrading each machine every time someone releases new products. With NCs, you only upgrade your copies on the network servers. And, since the NC has almost nothing in it, the cost of maintenance will slowly drop as the operating system becomes stable.

But - most software designed for network use requires more training, not less. Not only will you have to pay out of pocket, but when you ask an employee to switch to an NC, you will also lose their productivity during retraining and relearning. That opportunity cost could easily exceed all the other savings from NCs. When your people are learning software commands, they are not taking care of your business: it's your greatest dollar cost.

The next largest cost may be your networking. Each NC will be online all the time it's in use. That means a larger investment in modems, cable, phone lines, Ethernet, and network management. The cost of software is not likely to go down, even though you just buy copies for the servers. There are few good office packages for network use, and their price is higher than you would like.


Even more important than money are your people: will they stand for the change? They are used to being productive in a certain way with certain tools. If you bring in NCs, will all the folks with laptops stop using them? Do your people work from home in the evenings and weekends?

Until Microsoft and WordPerfect produce NC products identical to PC software, you can expect this to be a problem. Some of your people have tailored their macros, feature bars, spellers, and other tools. Don't make your users choose between two different tool sets. How empowering is it to make them adapt to a technical standard they cannot use well from home or the road?


The place to start thinking about Network Computers is at the effects they deliver for your business. The value of computing in your business isn't cost: it's getting value from your investment. If all you wanted was to save money, you would still be on "286" computers using the old WordPerfect. After all, the Hubble telescope is reputed to be using a 286.

When you decide to leave old technology, it's to get the effect your business needs. Since that effect comes more from software than hardware, so should your decision to go to Network Computers.

  1. Look at the available and proven software you need to run on a network with NCs without disrupting your users.
  2. Look at the support for that software. Is the supplier really committed to NCs, or is he waiting to see if anyone buys this stuff? Can you get good, knowledgeable support?
  3. Consider cost issues.

Then you will know whether it's time to invest in Network Computers!

Want to Try Before You Buy?

You can install one option today. A Utah company named Caldera offers an Internet Web browser that will run on older PCs. If you set your systems up to run off your Intranet or the Internet, this will allow you to use your old, nearly obsolete computers to build an NC environment.

WARNING - this is not for the technologically faint of heart. As of January, the software was still in beta test. It requires at least a 486 processor - it couldn't run on the Hubble. The tools do not always work together. If you need a project, download it from

Prepare to have limited applications that run on the net. Word for Windows? No. WordPerfect for Java? Not yet. This option will show you just how useful network software is.

But, first, ask yourself what's in it for you.