Ellison drives stake right into NC heart

By Doug Barney, John Cox and Chris Nerney
Network World, 5/18/98

Almost three years ago Oracle chief Larry Ellison began banging the drum for network computers (NC), claiming the low-cost Java-based devices would push aside clunky conventional PCs. Hopeful users wanted to believe him.

After a while the pounding got softer. Then Ellison grew nearly silent on the matter. But in recent weeks, Ellison has once again taken up the topic, and in the process, dashed hopes for an NC corporate revolution.

Ellison and other Oracle officers in the past few weeks have been sounding a consistent theme: Very low-cost Windows PCs, equipped with Web browsers and TCP/IP net access, will rule the desktop - not NCs!

In fact, Oracle officials now claim that the personal computer has become, or is becoming, a network computer.

No comment

The Oracle CEO has acknowledged that these ``new" PCs will block the network computer - as defined by Ellison - from corporate desktops. But that doesn't really matter, he said, because the PC is becoming simply an appliance, and the primary user interface is becoming the browser.

Ellison wouldn't talk to Network World, but Oracle Senior Vice President Mark Jarvis took on the job of spin control.

``We say the PC has mutated: if it has a browser, it's effectively become an NC," he said. ``[When accessing Internet data and applications, a PC] uses the local disk only to load the browser."

``When people pull up their browsers and go out on the 'Net, they're doing network computing, not personal computing. From Oracle's viewpoint, our goal is to make all our database applications accessible via the Web browser," Jarvis said. ``This [browser] is the true zero administration client: to access these database applications, all you need is the browser."

Industry reaction to Ellison's revisionist theme ranged from outright contempt to bewilderment.

``This is one of his most pathetic attempts yet to weasel out of his absurd predictions," said Jesse Berst, a long-time PC pundit and currently editor of www.anchordesk.com, an Internet news service for computer technology. ``I was at several of the events where he launched the NC, and it didn't even include a hard disk when first promoted."

``[Ellison] is dancing quite nicely as he exits the [NC] business," said Roy Graham, senior vice president of sales and marketing at Wyse Technology, Inc., a San Jose, Calif., builder of Windows terminals. ``The NC was always positioned as an alternative to the PC," he said.

Wyse last year scrapped plans for an Ellison-inspired Java network computer, arguing that customers were not ready to replace laboriously built PC client/server systems with untried Java devices.

Some MIS directors seemed less willing than Ellison to throw in the corporate NC towel.

``It doesn't make a hell of a lot of sense to me to have a full-blown, high-powered PC, even if it does cost less than $1,000, because of the cost of ownership of these devices - for support, for help desk, for administration," said Dave Klinzman, director of IT, Long's Drug Stores Corp. of Walnut Creek, Calif. ``Even if you can buy a PC for $700, that's only the cost of acquisition - that's not the cost of maintaining the damn thing."

The NC fad started almost unnoticed nearly three years ago at Telecom 95 in Geneva, where Ellison made a public pitch for a $500 ``communications device" designed specifically as an Internet client.

Within a few months, the idea was sparking enormous controversy and was sarcastically derided by PC stalwarts.

However, the NC idea prompted MIS and business managers to take a fresh look at just what PC computing was costing them.

That cost was growing every year, fueled by ever-larger Microsoft Corp. systems and application software, coupled with ever-more-powerful Intel Corp. processors.

This crystalizing of customer resistance prodded Microsoft and Intel to respond to Ellison's NC drumbeating.

First the vendors came out with a specification for the NetPC, a sealed PC with additional software so that it could be better managed over the network and loaded with software from a central server.

And early this year Intel announced it was creating a specification for ``lean clients" that would use Intel processors but could run a range of thin-client operating systems.

At the same time, NC shipments have lagged, hamstrung by the lack of Java applications and by Sun's delay of nearly a year in shipping its JavaStation NC. n
Ellison through the ages
May 1996
On the Network Computer: "It will change our economy. It will change our culture. It will change everything."

Nov. 1996
"We will never move to the information age if we have to rely on the PC to get us there. . . People can't afford them and don't understand how to use them. The NC is a communication and information access device, not a computation device."

April 1997
"It just hit me. . . It took me a while to see that we needed to go with the flow of the existing industry." (You can build it, but the industry will not come if it does not have Intel inside).

June 1997
Demonstrating the NC at a showcase for Oracle 8: "I'm really doing this. . . You don't see Bill Gates installing hardware on stage, do you?. . . A fifth-grade teacher could set this up."

Sept. 1997
"Public schools need affordable and easy-to-use computers. Costly PCs further a society of have's and have not's. Oracle's promise is committed to closing the digital divide by bringing network computers to every classroom in America."