News

Thin Is Still In

• By Tom Valovic
• 01/01/2009

With the economy diving south and IT shops increasingly interested in green technologies, Wyse Technology Inc.'s outspoken President and CEO Tarkan Maner feels that his company is poised for significant growth in 2009. Maner believes his company's series of thin-client solutions will prove to be more energy efficient and robust than those of his fat-client competitors, which include Hewlett-Packard Co., Dell Inc. and Lenovo. Maner, along with Wyse's CMO, Jeff McNaught, sat down recently with Redmond Editor in Chief Doug Barney and Executive Editor Lee Pender, and sister publication Virtualization Review's Executive Editor Tom Valovic, to discuss the company's current market strategy and future plans.

Redmond: How is Wyse Technology adapting to the new challenges in the marketplace?
Maner: About a year ago we completed $200 million in financing to expand the business into other geographies where we hadn't been in the past. We added more R&D resources. Right now we have about 300 R&D folks and all of them work on virtualization software. We don't have any hardware designers anymore. We outsource that to the OEMs in Taiwan. The secret sauce is not the box [the thin-client hardware]. The box is not that difficult to do. What's difficult is to have that box leverage the data center, network and compute resources so you can give a 100 percent PC experience to the user in a device [that costs] under $200, which can be refreshed every 8 to 10 years. And it has no operating system running on it, is completely solid-state, has no hard disk or fan and is completely green.

In this economy, IT departments might want to accelerate what they're doing in virtualization. What kind of payback can they get with a Wyse solution?
It's very short [and depends] on location, applications or the industry involved. We have some customers that get payback in three months or six months, and some that get it in a couple of years. HP, Lenovo, and Dell have a complete mafia infrastructure. They sell a PC, which is fat and unnecessary, and you pay a couple of thousand dollars for it -- and, by the way, there isn't any such thing as a $300 enterprise PC. Your seven-year-old daughter can use that. But your enterprise is not going to use it. There's a lot of other stuff that has to be put on that PC, including anti-virus, anti-spam, performance-management software, backup, recovery, storage [capabilities] and network-management software. The list goes on. There are whole [entrenched] industries based on this model [with vendors like] Altiris, Symantec, Veritas, CA and IBM. And PC companies do everything in the world possible not to bring up thin clients until the customer brings it up.

Tarkan Maner, president and CEO of Wyse Technology Inc., believes his company is poised for growth in 2009.

Isn't part of the challenge for Wyse this multi-core element? We're getting more high-end applications and rich performance on PCs, so won't thin-client suppliers be in a position of constantly playing catch up?
I don't agree with that. Look at Citibank -- 90 percent of the users are task-based and knowledge-based. Less than 10 percent of the company does actual high-end applications. Right now, 5 percent of all enterprise desktops are thin clients. Up to 80 percent of a typical company's employees are task and knowledge workers that don't need PCs. We're not saying every single PC has to be a thin client. You have [jobs like] CAD designers or radiology departments [at places like] Harvard Medical School that are going to use high-definition video applications. Let's say we give them an expensive HP $7,000 blade workstation, but for the rest of the end users, from students to bank clerks to knowledge workers in a retail company, you don't need them.

At Wal-Mart we have 200,000 thin clients running. All the stores use thin clients, where it used to be PCs 20 years ago. Wal-Mart doesn't do anything without extensive internal ROI [return on investment]. For a long time, PC companies did everything possible to create this problem themselves and then fix it. So based on what we see in the marketplace, there's a huge change going on because all of a sudden the economy went down, green is a huge issue, oil went up and people have to find a way to cut costs. This is the reason our numbers are skyrocketing right now.