HP unveils PC blade system

Hewlett-Packard (HP) Thursday detailed new thin-client systems based on PC blades, which it claims can potentially replace up to half of the existing desktops in medium-size to large companies.

The PC blade system, which will be available in March, is called the HP Consolidated Client Infrastructure and consists of a thin client connected to a dedicated rack-mounted blade in the server room running Windows XP operating systems. The blade will use Transmeta Corp.'s Efficeon processor.

HP believes its PC blades can halve desktop costs, which it put at about US$8,000 per PC over four years.

The strongest candidates for PC blades are IT shops that have already "maxed out on how much improvement they can get out of their traditional desktops," said Jeff Groudan, vice president of product marketing at HP's Personal Systems Group. "Frankly, they are the ideal candidate."

Thin-client pricing will start at US$349, and the PC blade will list for $799. HP said a full product suite -- including customization, implementation, training and support -- will start at under $1,500 per seat and at less than $1,000 per seat for a company that wants to replace tens of thousands of its desktops with blades.

Although HP sees big potential for its blades, the reality is that thin-client shipments, most of which are server-based systems, amount to only 1 percent of PC shipments. Market research firm IDC in Framingham, Mass., is forecasting about 1.45 million thin-clients shipments this year but has said the market will grow at more than 20 percent annually, reaching 3.3 million shipments per year by 2007.

IDC analyst Bob O'Donnell said HP's move raises the profile of an industry largely dominated by small companies. "The thin-client industry needs a big player like HP behind it," he said.

New York-based ClearCube Inc. sells a PC blade system using Pentium 4 chips and said more than 500 customers have adopted its systems. HP's decision to compete in the PC blade market, "validates this whole PC blade computing category," said Raj Shah, the company's chief marketing officer.

HP will also be competing against Sun Microsystems Inc., which offers a non-Windows thin-client system, its SunRay.

One company eyeing PC blades to reduce desktop cost is Wells Dairy Inc., a national company and maker of the Blue Bunny brand of ice cream products, in La Mars, Iowa.

The company already has some server thin clients, but Kim Norby, vice president of IT, said he is interested in cutting desktop costs. "We're certainly very driven to continue to do more with what we have and be able to support larger and larger systems with the same amount of technicians," he said.

Likely desktop replacement candidates are users who rely mostly on Windows and Office and don't have a lot of custom applications running on their systems. Mobile laptop users are also a barrier, although users who typically use their laptop only when its connected to a network, such as from home, can use it to connect to the blade.

But HP's Groudan believes that as many as half of existing desktop systems in companies running 1,000 or more desktops could scrap them in favor of thin clients.

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