TECH TALK: The Network Computer: Ellisons Ideas

Oracle CEO Larry Ellison first touted the idea of a network computer as early as 1995. Ellison introduced his vision of the network computer, a small, inexpensive device that makes it easy to run applications that access information via the Internet.
Wally Bock takes up the story:

The reasons were obvious, at least to [Ellison]. PCs had gotten too complicated, he said. And besides, every fifteen years or so there’s a new revolutionary product in the computing business that replaces what went before.
Network Computers were supposed to be slimmed down versions of Personal Computers. They might have a screen, a microprocessor, some memory chips, a keyboard and a mouse. The most important component would be the network connection.

That magic part would connect the Network Computer to the Net. There would only be rudimentary software and memory on the Network Computer. Most software and serious memory would be out there on the Net where it could be easily maintained. The system would run on Java and use Oracle databases. Microsoft software would be nowhere in sight.

The idea caught on with the industry insiders, journalists, venture capitalists and other trumpeters of the great Internet Bubble. In mid-1996, Business Week devoted a Special Report to Network Computer.

By then there was a price target, $500 and all kinds of companies were lining up to make products that would capitalize on this powerful Network Computer trend. Bandai, a Japanese company, announced that it would soon be selling a $600 Network Computer in the US. Apple had designed one called the Pippin.

There were only two figures in the computer business who didn’t share the enthusiasm for the Network Computer concept. Andy Grove of Intel hedged his bets by having teams work on projects that would set Intel up to be a player if Ellison was right. Bill Gates set Microsoft on a path of developing its own solutions.

Larry Ellison said that Network Computers would be widely available in 1996 but by mid-1997 that hadn’t happened. Gateway had released a Network Computer in May but that was about it. Still, no lesser authority figure than the Economist was saying that “there is broad agreement that NCs are indeed the future.”

Not much more happened in 1997 but in 1998 the Economist was still predicting that the PC would be “entering its twilight years by the beginning of the millennium.” The idea of the Network Computer as an “information appliance” had caught on and there were predictions that the folks who would really shift the Network Computer revolution into high gear would be companies like Sony.

Well, as it turned out, network computers didnt really happen. But the idea refuses to die. Ellison resurrected the idea. In November 1999, this is what wrote:

Though hotly debated in computer industry circles in 1996 and 1997, the network computing concept failed to gain a market foothold, in part because PC prices suddenly fell to historic lows–lessening the need for new, low-cost systems. When Ellison and others first began touting the network computer, traditional “standalone” desktops typically cost well over $1,500. Today prices begin around $400.

But as prices dropped, people seemed to conclude that controlling sophisticated software applications is less important than using the Internet. Home consumers in particular often rely on so-called Web-based applications such as Hotmail, and Internet-based corporate networks are commonplace.

PC makers and electronics companies have accordingly turned their sights toward manufacturing easy-to-use “information appliances” that deliver email and Web access. Thus the network computer, one of the first devices to contemplate doing away with personal hard drives and relying on network storage instead, could be positioned for a comeback–even if questions about the server end of the equation remain.

Ellison, the flamboyant head of the world’s leading database maker, said Wall Street’s reaction to Liberate [which was earlier called Network Computer] endorses his vision of “thin client” devices such as network computers, telephones and palm-size devices that work with applications from central computers.

“The personal computer is a ridiculous device,” Ellison said, arguing that while information appliances won’t obviate the need for PCs, the latter have hidden costs, create more labor for corporate information technology departments and don’t make sense for many users with scaled-down PC needs.

So, what exactly went wrong with the Network Computer?

Tomorrow: What Went Wrong

Tech Talk Network Computer+T

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Rajesh Jain

An Entrepreneur based in Mumbai, India.