ALLAN GRANT, DIRECTOR OF IT for Matrix Rehabilitation, was looking for a way to boost worker performance. Matrix, which provides outpatient physical therapy from 190 clinics in 12 states, needed to stay competitive in a market where skyrocketing expenses, intense competition and increasingly slim margins are the norm.
With that in mind, when the time came for a normal round of PC upgrades, Grant decided instead to implement a thin-client solution -- Citrix System's MetaFrame server-based software and Microsoft Windows terminal servers. The project was a success: The system's direct connection to the company's central database in Plano, Texas, reduced application access time by half, allowing workers faster access to critical patient data. As a result, Grant says, Matrix employees can enter up to 25 more patient visits and charges into the system per day.
Additionally, Grant and his IT staff can now get new clinics up and running without ever leaving Matrix headquarters. The company's IT group configures the Windows-based terminals in Plano and ships them out nationwide, reducing staff requirements and lowering travel costs.
"We'll save more than $2 million in our first two years," says Grant.
The IT world is certainly familiar with thin clients. Dumb terminals connected to mainframes were almost anorexic. But as personal computers improved, prices dropped and the drive to distributed computing gained momentum, thin-client computing all but vanished.
The recent rise of Internet-based computing and corporate intranets, however, has caused a resurgence in the thin-client space. According to an IDC survey from last August, shipments of thin clients increased 90 percent in 1999, with more than 50 percent of respondents reporting they had replaced at least some PCs with thin clients. "We're seeing a very healthy growth rate," says Bob O'Donnell, research director for device technology at IDC in Framingham, Mass. "A lot of people are talking about enterprise thin clients being the next big thing."
But experts warn that thin clients aren't a panacea. Businesses need to employ them in the right place at the right time in order to experience their benefits.
From Fat to Thin
Thin clients offer businesses several advantages. True thin-client terminals have no moving parts: they access applications and data via a server and generally don't offer local storage, so they require minimal maintenance and don't experience hard drive crashes; nor are they as susceptible to invaders such as viruses. The rise of ASPs promises that increasing amounts of software will become available for thin-client use. Even Microsoft -- the 500-pound gorilla of PC software makers -- continues to promote thin clients, currently through its terminal server product and in the future with its .NET platform.
And rather than providing support on a per-desktop basis, an IT department must simply maintain the server. For companies that have several offices spread around the country or a high volume of computer-based workers, that's significant. "We don't have to support the software on machines that aren't in our control, which reduces travel time, shipping costs and so on," says Grant.
Server-based computing has also helped Matrix leverage each new clinic's existing computing infrasstructure by putting older 386 and 486 PCs to use as thin clients that have the same access to applications as newer, more powerful machines.
Jeff Carter, vice president of MIS at Omaha Steaks, a purveyor and marketer of gourmet foods, says he's experiencing similar cost and management benefits. Omaha Steaks uses IBM thin clients for its call center, mail-order operations and other functions. "We didn't want to put PCs on every desktop and then have to deal with an [asset] management nightmare," says Carter.
"If you have an environment [that] you control, you reduce downtime, which ultimately reduces costs," O'Donnell says.
By the same token, thin-client computing allows for fast, easy software upgrades. Administrators perform the upgrade once on the server, and the new software becomes instantly available to every thin client in the company. That can result in significant time-savings, especially for corporations with hundreds or thousands of users. "We up-graded our entire enterprise from Office 97 to Office 2000 in about five hours -- and that's with more than a thousand users," says Grant.
Deploying thin clients clearly cuts costs, says Greg Blatnick, a vice president at Zona Research in Redwood City, Calif., "and everyone knows why that occurs -- the overall administration and support gets reduced. During the life of that product, [the TCO is] substantially less than that of a PC."
Cause for Caution
Taking a thin-client approach, however, does require some caution. Even vendors in the marketplace acknowledge that thin-client products work best for certain types of workers in specific environments.
"They are designed for task workers," says Kim Akers, director of marketing for Microsoft in Redmond, Wash. "If you have a user that's going to need a lot of local processing, needs to store files on their local machine or needs to be able to take a machine with them on the road, [thin clients] aren't the right solution."
Thin clients also reduce the amount of software users can access. "You're talking about managing the environment very closely from a central source," says Howie Hunger, IBM's director of net devices computing in Somers, N.Y. "If your employees need to run custom applications on their machines, a thin client is going to restrict that."
Even if you determine you have the right type of business and the right types of workers, thin servers can present still other disadvantages. "Workers need to have a live [network] connection. When the connection is down, the client is dead," says Blatnik. While workers using PCs can often continue to be productive without a network connection, thin-client users cannot.
Moving to thin clients also limits your options, says O'Donnell. "You don't have the flexibility of the PC," he notes. "You have [fewer] vendors [to chose from] and less control over the hardware that's available." And, he cautions, thin clients may have some hidden costs. "You also need [IT] people with server knowledge. Server people tend to be more expensive."
Not-So-Thin Market
Despite the caveats, one of the biggest thin-client vendors, IBM, reports it has seen its thin-client business grow rapidly, especially among organizations where transaction-based processing is king. The reason: Transaction-based processes are fairly routine and don't require the power of a full-fledged PC. "We've found that the most successful use of thin clients is where users are engaged in doing repetitive tasks such as in a call center, airline reservations office, accounts payable departments and so on," said Hunger.
Microsoft says it has seen thin-client converts emerge from the hospitality, garmentt and financial services markets. E-Centre.net, for example, deployed 3,700 Wyse Winterm Windows thin clients in hotel rooms as part of their StayOn-Line.com service, which delivers Internet connectivity to business travelers.
Gottschalks department stores, meanwhile, will link 79 stores to its corporate headquarters in Fresno, Calif., with thin clients giving in-store desktop users the ability to connect with the central mainframe and access inventory management, reporting and e-mail applications.
Success stories like these point to a bright future for thin clients. According to a February Zona Market Report, "Thin Clients, the Internet and Whales," 2001 will be "a year of healthy growth for the thin-client industry, gathering momentum as it progresses." Zona projects thin-client revenues will grow from $384 million in 1999 to $504 million in 2001.
But instead of replacing PCs, the Zona report says that thin clients will "provide a tool that enables task-based workers to be more productive and for enterprises to extend access points to new users and [additional] locations." And though they may never replace PCs altogether, thin clients will provide a solution valuable enough for some companies to put powerful desktop machines on the back burner for years to come.
