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Cover Story
PC vs. NC: The Whole Story
They're here! Network Computers have hit the streets-but how do these low-cost boxes measure up to your PC?

-- by John D. Ruley

Back in 1995, Oracle CEO Larry Ellison called the PC a ridiculous device. He predicted the forthcoming $500 Network Computer (NC) would be just what the rest of the industry-and the world in general-needed to topple the Wintel empire. Businesses, schools and consumers en masse would abandon their PCs and leap back to the diskless terminals of yesteryear.

Two years later, these devices are finally starting to hit the streets. Are NCs everything Ellison promised they'd be? Do they have what it takes to replace your desktop system? Here's an in-depth look at the real NC story and what it means to you.

The 'Thin Client'

An NC is basically an X terminal (think of it as a PC sans hard drive) enhanced just enough to run a Java virtual machine (VM). The Java VM enables Java-based NC programs to be both operating-system and CPU-architecture independent. Any Web server can host Java-based apps by making the code available to any device with a Java VM, which can then load the code and execute it locally. So, all you need to run PC-like applications, such as word processors and spreadsheets, is an appropriate browser-provided a server is available that hosts the Java-based application code. That server can either be offsite or on your company network. Once you download the code you need from your browser, it's stored in RAM and you can log off the server. Both Netscape Navigator 2.0 and Microsoft Internet Explorer 3.01 enable you to download the Java code, but they can run only on a PC. Sun's HotJava Browser is written in Java, so it can run on any hardware with a Java VM.

For an NC to function as anything more than a pricey paperweight, you must connect it to a network. Any LAN that supports Internet-standard TCP/IP protocol (such as Ethernet) will do. That means you can't use an NC at home unless it's hooked up to a network with a server. Depending on the type of NC, there may be some additional requirements. A pure NC, for instance, requires a boot server to function.

An NC has just enough smarts to make a network connection and load a Java VM, so you can work over a network-provided the applications you want to run are implemented in Java and published on Web pages.

The NC has evolved into three distinct types of machine: the true NC, which meets the Sun/IBM/Apple/Netscape/Oracle NC-1 specification; the near-NC, created by adding Java and Web-browser support to existing X terminal or diskless workstations; and the "anti-NC," or NetPC, contrived by Microsoft and Intel as a counter-action. Unlike the others, this Wintel unit has a hard drive, but the case is sealed, so hardware upgrades are impossible. Available as a desktop or notebook PC, the NetPC provides Java support with a suitable browser (Navigator 2.0 or IE 3.01)

Purist's Approach

Jointly developed by Apple, IBM, Netscape, Oracle and Sun, the Network Computer-1 (NC-1) specification defines a required central core of functions, plus a series of optional extras:


VGA or better display

Mouse (or other pointing device)

Keyboard (or other text input capability-perhaps a telephone keypad)


Network support, including TCP/IP, User Datagram Protocol (UDP) and Simple Network Management Protocol (SNMP)

Web browser support, including HTTP and HTML protocols

Standard Internet e-mail support, including SMTP, IMAP4 and POP3 protocols

Common multimedia formats, including JPEG, GIF, WAV and AU

Java VM, runtime environment and class libraries

Not Required:

Persistent local storage (hard drive or flash RAM)


Legacy network support for ftp, telnet and Network File System (NFS) protocols

Remote boot and simplified administration via Dynamic Host Configuration Protocol (DHCP) and Boot Protocol (BOOTP)

Secure communications via Secure Sockets Layer (SSL) emerging security APIs, ISO 7816 (SmartCards) and Europay/MasterCard/Visa specifications

Conspicuously absent from this picture is any form of Windows application support. That's why some observers call the NC-1 consortium "anybody but Microsoft."

This lack of Windows application support represents the NC-1's biggest shortcoming: If you try to replace a PC with an NC-1, you'll have to change your applications. An NC-1 cannot run Microsoft Office, WordPerfect or Lotus 1-2-3, because they're written for a specific CPU architecture. Nor will it run X-based UNIX applications (unless some kind of add-on X terminal emulation is provided). Without Java-based applications, the only thing an NC-1 system can do is log in to the network and browse the Web.

Consortium members shrug this off as a temporary problem, saying applications are on the way. Corel is already offering a pre-beta of its Office for Java suite on its Web site (see sidebar). We've provided a link at our NC page (http://www.winmag.

com/ew/nc.htm). And late last year, Sun released a book listing 450 Java applications that are now in development. But the development environments are still primitive, making it tough for programmers to create the type of feature-rich applications Windows users take for granted.

Network requirements for the NC-1 are minimal: Any TCP/IP network that supports the particular NC-1 unit's requirements (typically Ethernet) is sufficient, and you don't need a specific type of server (although Sun sells a line of Netraj servers optimized for this purpose). IBM has kits available to enable its PC servers, RS/6000-based servers, AS/400 midrange systems and even System/390 mainframe computers to serve NC-1 clients. The network server needs to support only conventional TCP/IP networking and Internet-standard domain naming service (DNS). In addition, it needs to support BOOTP protocols for locating network resources, downloading the JavaOS code and accessing the HotJava Browser. The BOOTP protocol is the same protocol used for any diskless PC, and the boot server is required only when you start an NC-1. After that, an NC-1-type system can browse any Web server on the network, including an Internet server if an Internet gateway is available.

Another element absent from the NC-1 is a hard drive. The NC-1's designers claim a hard drive isn't necessary because the client's data and applications are stored on servers. But a hard drive does more than store data; it serves as a source of virtual memory to augment physical RAM and acts as a local cache for Web pages and other data.

Virtual-memory systems, such as Windows 95 and NT, let you run applications that require more RAM than you actually have by swapping data between RAM and the hard drive. Without this capability, your system would crash whenever you tried to run an application or combination of applications too large to fit in the available RAM. Local caching improves the Web browser performance by storing a local copy of the most frequently accessed pages. Rather than waiting for your system to retrieve all the page elements every time you select it, you get a local copy a lot faster from your machine's cache.

Without a hard drive, an NC-1 system must have enough physical RAM to run a Java VM, a Java-based operating system, a Web browser, and the largest application or set of applications you're likely to need. The IBM NetworkStation comes with 8MB of RAM, expandable to 64MB; the Sun JavaStation is available as either an 8MB ($742) or a 64MB ($1,582) unit. You can use any excess RAM for Web page caching, but because RAM is erased when the power is turned off, any cached pages go with it. IBM says 8MB is sufficient only for Web browsing and light Java applet use. Full-blown Java applications will require more RAM, and Web page caching requires more still. So theoretically, NCs will require at least as much RAM as a PC when used for an equivalent purpose (and quite possibly more). That increases the cost to well above the initial $500 estimate.

Offsetting this is what NC-1 proponents regard as its greatest advantage: centralized management and control. For instance, the boot server enforces user names and passwords. If you need to upgrade the JavaOS, the HotJava Browser or an application, you load it only once-on the server. Of course, this means there's a major additional factor affecting the total cost of ownership (TCO) for an NC-1 based system: the cost of the server (or servers) that NC-1 clients connect to.

NC Wannabes

While the NC-1 consortium was busy inventing a new kind of desktop system, several old-line terminal makers have seized the opportunity to add NC capabilities to their existing products.

Some time ago, Wyse Technologies began marketing a high-end line of Windows Terminals (Winterms), which are basically X terminals with built-in support for Citrix Systems' Internet Client Architecture (ICA). ICA takes the same basic idea as X/11 (applications run on a server; the client provides only the user interface) and extends it to Windows applications. The server in an ICA environment typically runs Windows NT, modified to support multiple virtual consoles. Low-level graphic data is transported from each virtual console over the network via ICA protocol to the client, where the graphics are rendered. User input from the client is transported to the server. As a result, you can run Windows applications from an enhanced X terminal.

"But that's not a Network Computer!" the NC-1 consortium responds. And it isn't. The Winterm user is tied to an NT-based Citrix WinFrame server every bit as tightly as any host-centric dumb terminal user ever was. And although you can achieve the same effect as an NC-1 (by running a Java-enhanced Web browser, such as Navigator 2.0 or IE 3.01 on the WinFrame server, and viewing it on the client via ICA), the result lacks the NC-1's inherent elegance and flexibility. An NC-1 machine can execute a Java-based application locally. It needs a server to start up, but from then on it's a true NC: It can view pages and launch applications on any server, not just the one it started up on. A Winterm always runs against the WinFrame server it's logged into.

Some users won't care. Thousands of sites that still run host-centric environments can employ Winterm-type devices to give their users access to both the Web and Windows-based applications. Indeed, HDS Network Systems claims it started selling NCs long before the NC-1 specification was even born. What HDS is really referring to, however, is an X terminal with WinFrame support.

Several vendors (Wyse, in particular) are now taking the X terminal-to-Winterm evolution a critical step further. Adding a Java VM to a Winterm (as Wyse has done in its new Winterm 4000 series) results in a single unit with all the advantages of NC-1, X terminals and ICA.

Network requirements for an upgraded X terminal or Winterm with Java VM support are basically the same as for conventional X terminal or Winterm systems: TCP/IP over Ethernet (or even RS/232 serial data lines on some low-end models), with DNS. Some models support DHCP, which eliminates the need to assign separate IP addresses to each unit. Nevertheless, these are still terminals, and as such, they require a continuous connection to a server. The NC-1 requires a server connection only during the boot process.

Like NC-1 systems, upgraded X terminal and Winterm software is centrally managed. Unlike NC-1, this can include Windows-based application management if you use a Citrix WinFrame or similar server. As with NC-1, you need only upgrade software on the server. Also as with NC-1, that makes the server an important component of the total cost of operating.

Wintel's Anti-NC

Hardly content to sit back and watch other companies grab market share, Microsoft and Intel came up with a Network Computer of their own: an Intel-based PC running Windows, packaged in a sealed case, with built-in support for centralized management. Their intention was to disable end-user hardware upgrades and enable IS to perform software upgrades from the server.

Dubbed the NetPC, this approach has several advantages over its competition. For one, it leverages all the development effort that's already gone into the PC. In addition to Windows support, the NetPC also supports Java-based applications, through the Java VM built into the Web browser. If you prefer remote Windows application execution on a WinFrame server, Citrix ICA protocol support is built into some Web browsers. Legacy protocols such as X/11 can also be supported with suitable emulation software.

NetPCs have hard drives, so both virtual memory and a large, inexpensive local cache are available automatically. And because it's based on a standalone PC architecture, the NetPC has minimal network requirements. You don't need a "live" network connection to boot a NetPC; you need it only when you want to browse or load a network resource.

On the other hand, the NetPC brings its fair share of disadvantages. Even though the sealed case and built-in IS management may help reduce the TCO, it's hard to imagine how the NetPC can come in under the $1,000 price tag of the entry-level NC-1 units and enhanced X terminals.

Even for more than $1,000, it can't compete with a low-end PC. The sealed case may prevent unauthorized end-user upgrades, but it's also likely to make upgrades of any kind difficult, expensive or even impossible, depending on the system design. Centralized management may be a good thing, but so far Microsoft has said little publicly about how this is to be accomplished. In private, the company has discussed loading application settings on a per-user basis in the system Registry database-a neat trick, but it will work only if the NetPC runs NT Workstation as its operating system.

Microsoft's new "zero administration initiative" may not yield management as centralized as that for the NC-1 and terminals, but it should come close. Software upgrades will most likely require client as well as server operations. But because add-on client administration tools such as Microsoft's Systems Management Server (SMS) enable NC-like centralized management on today's PC clients (at the cost of a server on which SMS is run), managing tomorrow's NetPCs should present no special difficulties.

The question is why anyone would want a PC that can't be easily upgraded-your only option when a system becomes obsolete is to replace it. Sure, a more manageable PC is a positive step, but to run the broadest possible range of application software now-and in the foreseeable future-you're going to have to buy a PC.

Is the NC Really Cheaper?

But is it necessary to sacrifice savings for versatility? To answer that, you have to examine the TCO. Computers come with two price tags: You remove one when you wheel the system off the loading dock; you keep scraping at the other for as long as you own the machine. The real answers may have to come once NCs are implemented. But it's possible to estimate the TCO based on the available information.

A recent study by the Gartner Group did just that. The study concluded companies could achieve the following cost savings over Windows 95 desktop environments: 26 percent for the NetPC, 31 percent for the NC-1 and 39 percent for the near-NC.

The total annual costs for the PC were $9,785-$7,325 for the desktop and $2,460 for the network. The NetPC came in next, with desktop costs of $5,197 and network costs of $2,070, for a total of $7,267. Near-NCs followed, mostly because of their high server-related costs ($882 compared with $682 for the PC), totaling $6,776 ($4,553 for the desktop and $2,223 for the network). The NC-1 was the least expensive option, with desktop costs ($4,089) and network costs ($1,922) totaling $6,011.

The study separated desktop and network costs into four categories-capital, technical support, administration and end-user operations. Capital included hardware, OS software and depreciation. Tech-support included Tier 1 Help Desk (LAN administration and help desk-type activities), documentation, application consulting, product review, newsletters, user groups, IS desktop learning and disk management. Administration on the network side consisted of asset management, security, and formal and informal auditing. On the network side it included capacity; moves, adds and changes; upgrades; server purchases; and NOS administration. End-user operations on the desktop side included data management, application development, formal and casual learning, client peer support and what's commonly called UBFWI (user's been fooling with it). On the network side, it was network peer support, misdiagnosis and training.

A 2,500-desktop network was used in the study, and the user breakdown exemplified the mix at a typical company-15 percent power, 65 percent office and 20 percent general.

Capital. The study placed the capital cost of the PC at $1,850, compared with $980 for the NC-1, $1,015 for the near-NC and $1,733 for the NetPC. The configuration of the PC in the study was a Pentium 166 with 24MB of RAM, a 1GB hard drive and a 17-inch monitor. Gartner used Tier 1 hardware vendors, which include such brand names as Compaq, IBM, Digital and Hewlett-Packard. The configurations of the NCs were based on the units currently on the market. The NC-1s and the Near-NCs typically come with 8MB of RAM and do not have a monitor; the NetPCs are not yet available (see the sidebar "NC vs. PC: Compare the Features")

The study did not include software. If your PC's bundled apps are inadequate, buying the ones you need could be a major expense. NCs run software from a server, so there's no per-desktop software to buy. But you may have to acquire per-desktop licenses, as is the case with Citrix WinFrame, which allows users to run Windows apps on their NCs. License fees can often equal what you'd pay for locally run software.

Technical support. Desktop tech-support costs in the study were highest for the PC ($1,066, compared with $870 for the NC-1, $859 for the Near-NC and $970 for the NetPC). The most likely reason is because PC users can tweak their systems and then need help in solving the problems that often result. Training, referred to as IS desktop learning, is likely with any new system or software package. A typical PC training course costs several hundred dollars per student and requires one or more days away from work. Proponents claim NC training will cost less, but this will depend on the nature of the software. Logic dictates that a Java-based word processor with the same breadth of features as a Windows program will require the same amount of training. PC software has the advantage that training resources (books, classes, even co-workers) are already plentiful.

Administration. Desktop administration costs were more than double for the PC ($945 compared with $440 for the NC-1, $460 for the Near-NC and $422 for the NetPC). On the network side, the difference was slightly smaller ($552 compared with $230, $310 and $406, respectively). The study assumes one administrator can handle 41 PC users, 69 NC-1 users, and 60 Near-NC and NetPC users.

End-user operations. Another area where desktop costs were substantially higher for PCs was end-user operations ($3,464 for the PC, compared with $1,799 for the NC-1, $2,219 for the Near-NC and $2,073 for the NetPC). On the network side, the numbers were $588, $392, $392 and $434, respectively.

Gartner doesn't expect the NC market to settle down for another 12 to 18 months, and is convinced vendor hype "and glossy slides of nonexistent or unavailable products and features will dominate the market." The report says the NC is not yet ready to serve as a general-purpose PC replacement, but is best deployed in specific environments such as help desks or call centers where it fills a specific, reduced or limited function. "The availability of applications, development tools and management products to provide full support to the NC environment are critical factors before the NC can replace the PC," according to Gartner. The company predicts these solutions won't arrive until at least 1998.

"Don't throw away your PCs; network nirvana is not yet a reality," says Dave Cappuccio, vice president and research area director, Network Technologies, Gartner Group.

The Bottom Line on NCs

Most agree the hidden costs for PCs-upgrades, administration and support-are high. But it's difficult to conclude NCs will be significantly cheaper because they're new and not yet implemented in sufficient numbers. NCs were ballyhooed as $500 PC replacements, but it's now clear that a figure of at least $1,000 ($750 for the NC plus $250 for a monitor) is more realistic.

The availability of software for an NC network is another concern. If you can't get Java-based apps that fill your needs, you'll probably have to opt for an NT server with software like Citrix WinFrame to permit remote execution of Windows apps ($5,595 for 15 seats). Plus, you'll need sufficient bandwidth to support server-based applications.

Smaller organizations don't appear to benefit from NCs. A six-seat department could implement a Windows-based peer-to-peer network for the cost of six PCs (about $15,000). The networking capability is built into the OS, which is likely included in the purchase price, as is application software. The same setup using NCs would run about $1,000 more (six NCs with monitors at $1,000 each, plus a $10,000 server)

The jury is still out on whether the NC will thrive-or even survive. Until a reasonable selection of Java-based applications arrives, it's impossible to evaluate the NC-1 systems. At the moment they're little more than expensive dedicated Web browsers. The enhanced X terminal approach makes sense at sites that already use such equipment because it brings Web access to existing hardware and software (some X terminal vendors sell upgrade kits that turn existing X terminals into NCs). But without one or more servers running X-based software or ICA on NT, the enhanced X terminal is useless. And the question remains whether its limited memory will enable it to run Java-based application software effectively.

But perhaps the most compelling argument in the NC vs. PC debate is productivity. NCs require a server, which means if the server goes down, work grinds to a halt. A PC can stand alone.

Windows Magazine, April 1997, page 186.

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