Wyse Technology has a few interesting thin-client devices in the works for later this year, but the company's long-term health depends on its ability to take advantage of fast networks with sophisticated software, according to the company's chief executive officer.

The company plans to introduce a thin-client monitor later this year, said John Kish, chief executive officer of Wyse, in an interview with IDG News Service Thursday. It will have an embedded chip behind a flat-panel display, similar to an all-in-one PC such as Apple Computer's iMac computers.

This device will become the latest hardware thin client from Wyse, long known as a thin-client proponent. But since Kish joined the company 10 months ago, his focus has been on moving Wyse away from commodity hardware design to the development of software that will allow corporations to take advantage of server-based computing.

Server-based computing is one of those seemingly good ideas that never seems to go anywhere. It's based on the premise that some PC users, especially ones using just one or two applications in the course of a day, don't need all the capabilities provided by a PC. Instead, they could access their applications through a simple hub on their desks that connects to a server where all the data and applications are stored. This allows IT managers to tightly control the type of software run on their networks and relieves IT departments of the burden of managing individual PCs.

However, most IT departments still issue their users PCs and endure patch cycles and hard drive failures. Kish estimates that Wyse thin clients account for about five percent of the desktop client market. In the past, the theoretical promise of thin-client computing has been overshadowed by the poor performance of applications over the network and the conservative nature of IT managers uneasy about introducing an unfamiliar concept.

Despite the obstacles, Wyse still believes in the promise of thin clients because networking technology is finally reaching the point where server-based data can reach a user's desktop almost as quickly as data stored locally, Kish said.

Security concerns are another factor that is reawakening interest in server-based computing, said Mark Margevicius, a research director with Gartner.

"Our clients feel that [Microsoft's] Windows today is very exposed to a lot of bad things out there," Margevicius said. By controlling data from a central location, IT departments with thin clients can limit the ability of users to download software potentially contaminated with viruses or worms, he said.

Even though many of these arguments resonate with IT managers tired of scrambling to contain a virus outbreak, in the end resistance to change and sticker shock work against companies such as Wyse, Margevicius said. Although Gartner has studies that show server-based computing often reduces maintenance expenses by 10 percent to 40 percent, thin clients can be expensive to set up and require staff to be retrained on the new infrastructure, he said.

Thin clients probably hold the greatest promise outside North America and Western Europe, said Roger Kay, president of Endpoint Technologies Associates.

"While the developed world would have to overcome the inertia of the existing technology, [thin clients] could stand a chance elsewhere," Kay said.

Wyse hopes improved management software will make it easier for new users to embrace thin clients, Kish said. The company is investing heavily in software development centers in India and China, not just to save money but also to take advantage of local talent to design products specifically for those markets, he said.