Hewlett-Packard seeks big growth with thin clients

Hewlett-Packard is adding an AMD processor to its new thin-client computer to chase that fast-growing market.

Hewlett-Packard Co. launched its next generation thin-client computers Wednesday, rolling out the t5720, which uses Advanced Micro Devices chips. HP previously used processors from Transmeta, which no longer makes chips.

The company hopes the change will help it grab a greater share of the fast-growing market for thin-client computing, from business use at all levels and, in the future, for home use.

The t5720 thin client will be 10 percent faster than its predecessor, the t5710, and still use less wattage, said Keith Martin, product manager for HP thin clients. It achieves that by using the AMD Geode NX 1500 processor, a 1GHz chip based on the mobile Athlon. The t5720 also has more memory, with up to 512M bytes of flash memory and 512M bytes of DDR (double data rate) RAM. It runs the Windows XP Embedded operating system.

It is priced at US$699 with 256MB DDR memory.

The t5720 will be the high-performance model in HP's line of thin-client computers, alongside the price-sensitive t5125 for Linux systems, and the business-class t5520 for Windows CE 5.0 and t5525 for Linux.

HP sees strong growth potential for thin clients. In 2005, 2.6 million thin clients were shipped and unit shipments are forecast to reach 4.5 million this year, Martin said.

Thin clients could have strong growth in many sectors, said Mark Margevicius, research director at Gartner Research in Stamford, Connecticut.

"Customers are faced with an aging PC installed base with costly upgrades scheduled. Now they look at thin clients and see faster networks, better security and lower management costs. I wouldn't call it the perfect storm, but it's the perfect opportunity," he said.

Homes provide another opportunity for thin-client growth.

Cable television providers see a growth opportunity in providing applications as well as content, but to succeed they also need to manage their customers' computer hardware. Thin-client computers could be the answer to that impediment, because they are so inexpensive to maintain.

"Now, a thin client doesn't look a lot different than the router box or set-top box that's already in your house. So that's really intriguing," Margevicius said.

Another company that sees opportunity in thin clients is Wyse Technology, of California, which on Wednesday announced a partnership with AT&T's Business Services Division. AT&T will offer its business customers a bundle of Wyse thin-client computers and an AT&T array of security and continuity services, data-hosting services, and data and IP (Internet Protocol) networks including VPN (virtual private networks) and VOIP (voice over IP) telephony.

Thin clients today have just a 5 percent share of the corporate desktop market, but that will quickly grow beyond 10 percent, said company Chief Executive Officer John Kish. Because Wyse has a 40 percent share of the US$600 million thin-client market, it could claim a large portion growth, Kish said.

Demand for thin-client computers is growing because companies want to drive down the cost of workers' computers. Since a thin client has no moving parts like fans and hard drives, it will last five to 10 years longer than an equivalent PC, he said.

The thin client computing model can support enterprise use because of recent improvements in networking and software from companies like VMware and Citrix Systems, Kish said.

Ten years ago, users had valid complaints about how slowly thin clients pulled data off a central server. Users demanded a product that could emulate or replicate a complete desktop environment.

"The keys to that castle are in software, not hardware," Kish said. "In a thin client, you don't need a 2GHz processor because there's not much processing going on; the network does the heavy lifting."

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