Bringing low-cost computing to new markets while offering high margins to resellers
NComputing has been making waves in the IT world with its low-cost computing terminals that open up new markets for resellers – while at the same time offering high margins. There’s also the added bonus of being able to help economically limited markets.
NComputing offers a desktop virtualization solution comprised of software and hardware that allows an organization to run simultaneous users off a single low-cost PC – for as little as $70 per user (including the license).
The company recently opened its doors in Canada and signed on Synnex as its national distributor. As a 100 per cent channel-based company, it’s in the process of building a dealer base in Canada and developing an aggressive dealer-centric program to make this one of the hottest-selling products that resellers have in their arsenal.
“I think 2008 is our year to blossom in Canada,” said Stephen Dukker, CEO of NComputing in Redwood City, Calif.
“We’ve been doing some work in 2007 to prepare the geography, getting distribution in place, getting dealers up and running. Now we’re looking to run.”
In the past 18 months, NComputing has shipped more than half a million terminals around the world. But this isn’t your traditional thin-client technology. Desktop virtualization refers to what the software does – virtualizing user desktops inside a single shared computer.
The terminals are called virtual PCs because they’re not actually PCs, but rather low-cost devices, and their job is to reconstruct shared desktops from the memory of the shared computer, reproducing a user friendly PC experience for the end-user.
“Unlike previous generations of thin-client products, which quite frankly sucked in terms of the user experience with terrible multimedia performance and latency, none of that is in our product line,” Dukker said. “Because the user experience is virtually identical to a PC, that’s allowed this to really take off.”
New markets are waiting to be penetrated, but they can’t afford PCs, even at $400 a seat. One example is education. In the U.S., there’s only one PC for every six to seven students. The key for schools is to get as many workstations as possible for the budgeted dollar, said Dukker, and since these terminals are not actually computers, they cost a whole lot less.
Macedonia, for example, purchased 180,000 seats of NComputing’s technology, and has become the first country in the world to reach the ratio of one workstation for every student in the country.
Each classroom has three or four low-cost computers, but each of those computers supports seven students using desktop virtualization.
NComputing’s software was modeled after the same kind of software being used in large corporate environments.
“Except in our case, instead of making it a technology for very rich organizations to save long-term operating costs, it’s actually become an enabling technology for vast new numbers of users,” said Dukker.
While it’s resetting the economics for efficient low-cost computing in the corporate world, it’s also opening up the market to underserved and economically limited user environments, such as education, health care and government – particularly in developing countries.
It also addresses the profitability issue. “The lack of profitability in selling desktop PCs is legendary,” he said.
“As long as you’re not an extreme gamer or computational scientist, a $400 PC does fine for 90 per cent of the user community.” In order to keep growing in a saturated market, PC vendors have been cutting margins down.
Desktop virtualization represents another architecture. “Because it’s not a PC, it results in a low manufacturing cost, which allows 25 to 35 per cent profit margins for resellers that are unheard of in the PC space,” said Dukker, “and at the same time reducing the cost by almost 75 per cent, [which] is the typical savings per seat with this technology.”
Each terminal uses anywhere from one to six watts of power, compared to 85 to 120 watts for a PC, so in terms of electrical costs, these devices can pay for themselves within a year, he added.