Get Your Clients To Go Thin

No, we are not talking from your client's physical fitness point of view. We
are referring to their IT infrastructure instead. Security, compliance and
business continuity are becoming the biggest challenges for enterprises,
irrespective of their size. It becomes impossible to manage and deploy
locally-based computers. This is where thin clients come in

Connectivity, security and expense have always been the most important
factors for success in the new economy. A smooth flow of information in an
easy-to-use format is both mission critical and a potential added advantage for
any user.

When organizations started expanding their branches and spreading their reach
across the country, managing the whole operations was seen as a huge problem and
a move that would bring in massive networking problems. Now with the emer­gence
of server-based computing in conjunction with thin clients, many companies are
centralizing their operations through which there is a considerable increase in
the computing speed.

Storage, data and applica­tions are centralized on the server and accessed
through and from the server. It is also said that more and more companies have
started recognizing the benefits of this server-based computing along with thin
clients.

In layman terms, thin client is a computing device, which displays data and
applications from remotely located servers, blade or virtual desktops, without
any local storage devices like hard disk. This architecture has enabled IT
departments to give each set of users the maximum computing power they need and
most importantly ensure high security through reliable servers.

With the emergence of thin clients, PC users no longer need to configure and
troubleshoot their own machine. Connected over the Transmission Control Protocol
(TCP)/Internet Protocol (IP) network to application server for the
functionality, thin clients use very little computing power.

Deploying thin clients, one could minus the software installation costs, PC
up gradation cost and also save a lot of power consumption. So why did this
feature, which has numerous advantages didn't take off in the early stage when
it was launched.

Early discrepancies

The concept of thin clients changed from a terminal model to a PC model
centralizing all storage and applications on the server, with users being able
to access and view only the required information. Initially there was an
apprehension among people for going in for a system without a hard disk.

Few companies like Microsoft; Citrix Systems tried their bit in highlighting
the virtues of thin clients. It was also considered expensive and unmanageable,
and to be more precise, vendors failed to effectively drive home its advantages.

According to Limesh Parekh, CEO of Valsad-based Enjay Network Solution, “Thin
clients require heavy server and earlier server hardware were costly but now,
the cost of hardware has decreased, whereas the services have become costlier.
Thin clients help in reducing the servicing cost.”

Echoing a similar view was Manish Dave, Director, Apurva Computers
Technologies, Gujarat said, “When thin clients were introduced in Indian market
some 10 years ago, the hardware configurations for servers was not high enough
to cater to a large number of thin clients. Also the operating system for the
server had lots of limitations for this technology, so the success rate was
low.”

HCL Peripherals was the first to come out with a thin client in India during
1994. Said S Balaji, Deputy GM-Marketing and Support, HCL Peripherals, “The only
reason that thin client didn't take off at that time was due to the
adoptability. The rates of licenses that time were high but now it has come down
per PC. Any new technology takes time to become popular and the

same goes for thin clients too.”

Agreeing to this fact is Neeraj Saraf, Director of Mumbai-based Seal
Technologies. He said, “A new concept takes a while before getting acceptance,
people were unsure of stability especially when there is no storage media
locally present. Lack of awareness has been another factor contributing to it.”

A big market

Within three years, there has been a considerable improve­ment in the
adoption rate of thin clients. One of the reasons for this is the increasing
common perception that it is more secure to have data in a central place, which
is safe and would increase the network uptime as well.

Even statistics suggest that thin clients are in a revival mode. According to
IDC, 2.4 million thin clients were shipped in 2004 and this went up by 43
percent in 2005. In 2007, this is likely to see an increase to 4.2 million,
which would further escalate the numbers.

In 2007 the overall market size of thin clients in India was around 80,000
units, and according to IDC, there was a 30 percent growth every YoY. Agreeing
on this figure is Balaji who said that the thin client penetration is around
four percent as compared to the desktop penetration in the commercial space in
the country today.

P Raghuraman, Country Manager-Emerging Businesses, Personal Systems Group, HP
India said, “Remote client solutions like virtual desktop infrastructure, blade
PCs, blade workstations, etc are now a reality thereby giving tremen­dous
benefit to organizations. In all these deployments, thin clients are the
preferred access devices. Hence there is a growing popularity of these
technologies now.”

Amod Phadke, GM-Sales, Gigabyte Technology India noted that large MNCs never
focused on thin clients business and there were very limited players in India
positioning thin clients. “Today there are a lot of players in India selling
thin clients and medium scale companies too are positioning thin clients in
India, who are typically embedded software developers and are doing fair volumes
on thin clients,” he claimed.

Thin clients vs PCs

With thin client solutions, all types of users from entry-level data
operators to knowledge workers can access the applications and resources they
need with greater control, location flexibility and total cost savings. Dave of
Apurva Computers Technologies said, “Using thin clients management one can have
much more control over users, applications and data security. And they can get
uniform platform amongst all users, low maintenance, low power consumption,
single point maintenance and there is no need for upgradation.”

Stressing the same Raghuraman of HP India, said, “Thin clients serve many
types of users in any location with greater security. It easily manages the
entire client environment and delivers great company-wide savings, wherein one
can migrate and deploy quickly with total cost savings even when the scale of
users is in tens of thousands.”

With each passing day, thin clients have seen some sort of transformation in
its structure. Earlier it used to be more rigid model in storing and accessing
data. However, now it has become more flexible.

“One of the main reason for Indians to adopt thin clients is the flexibility
it offers. Earlier everyone was strictly asked to store everything on the
server. However, today people can run their local applications in thin clients
and can also store locally,” said Balaji.

Driving factors

Return on investment (ROI), total cost of ownership (TCO) can be old
terminologies, however these are the key driving factors for adoption of thin
client technology. While studying the cost of acquisition of 100 PCs to that of
100 thin clients, there may not be big difference in the hardware expenses. But
for any IT head, managing thin clients and PCs can make a vast difference and it
is a major challenge for any organization.

“It has also increased the productivity of a company, as there is no chance
of diversion for an employee while working, a lot of restrictions involved in
thin clients,” Balaji added.

Organizations are increa­singly becoming aware of all benefits and keeping
data excessively secure is the foremost on minds of all and that is also one of
the major factors driving the growth of thin clients.

“As the number of computers are increasing, every one faces the problem of
maintenance and virus. Maintaining desktop PC takes too much time, and demands
more productivity from user. Apart from all the cost benefits, the productivity
in thin clients is more and that is driving more number of companies to go for
thin clients,” said Dave.

Most vendors feel that BFSI, education, e-governance, manufacturing, ITeS are
the core areas, where thin clients could be deployed successfully. “With the
awareness of thin clients usage in the past three years, the acceptability of
thin clients is very high. Thin clients have been highly accepted in banks,
retail, BPO, call center, large corporate and SMB who has a requirement of one
server plus five users (10 users),” said Phadke of Gigabyte Technologies.

Scope for solution providers

Around 90 percent of thin clients are deployed through systems integrators (SI)
or solution providers (SPs). And the potential for them in this domain is huge.
“All SIs irrespective of their range provide end-to-end IT solutions to their
customer. One out of three customers today asks for thin client deployment.
Therefore, it is not possible for a SI to reject the offer or shy away
considering that it is not his cup of tea. At any cost, he needs to provide that
for retaining his customer,” claimed Balaji. He also said that a SI by default
has to be aware of thin clients, buy it and deploy for his customer, so it has
become a part and parcel of IT offering.

It also gives SIs an opportunity to deploy end-to-end solutions, which
indirectly leads to catering other solutions like servers, disaster recovery
solutions, etc. The advantage of taking up thin client solutions for a SI
partner is that it gives them an opportunity to sell it to customers end-to-end
IT deployment right from backend data center to networking to front end access
device.

Raghuraman of HP India, said, “On top of this, there are other value
additions like image customization, middleware and applications deployment,
multi-location implementations. In fact remote computing solutions would give SI
partners a much higher share of wallet from their customers.”

Even Parekh of Enjay Network Solutions felt that SIs can go for thin client
solutions as there are many allied things that can be offered with it, like
networking consultancy, server set-up, security consultancy, Linux migration.

Even though most of the vendors do stress SPs to take up thin clients, few of
them felt that the revenue generated through maintenance could be under threat
in thin clients as it is very easy to maintain the whole setup.

It is a fact that revenue generated through maintenance is always low when
compared to traditional PCs in this thin client environment. However, customers,
who prefer thin clients wouldn't like to transit to some other architecture and
they always prefer to go with the same SI, who has deployed thin clients in his
environment for any other solutions he requires.

“Even when he scales up his operations, he would continue to be with the same
SI,” said Balaji. He felt that the best deployment to the customer will always
have a face value and that would continue to give business to SI.

Dave of Apurva Computer Technologies echoes the same sentiments. “Every
customer wants smooth work and hassle-free environment with minimum problems and
if any partner is providing satisfactory result then I don't think there is any
question to affect service revenue,” Dave claimed. He also added that since
clients do not want frequent visits from a SI/SP, they want their work to be
smooth and would always prefer to go for thin clients.

Vendors support

Obviously without the support from vendors, deployment of thin clients could
be a difficult task as it is basically a technical product and requires
technical knowledge on part of partners.

“Our product is special because of our channel policies. We have a very good
technical support team, which trains channel partners. Considering the
importance of this, we do train our dealers and channel partners regularly,”
said Parekh of Enjay World Solutions.

Apart from providing technical training, Apurva Computer Technologies helps
SPs by deploying their technical person at onsite along with SP's team. “We
support SIs/SPs and deploy our technical people to successfully implement their
project for the client. Besides, this we send our sales person to our partners
for giving them awareness and knowledge about thin clients, stated Dave.

Even at this age, where technology has developed at its core, few customers
are not too keen to deploy thin clients in order to reap the maximum benefits.

“For SP/SI to pitch the product to customers, first of all they should be the
master of the technology and only after knowing all the nuances of the product,
they can provide help to clients and would be able to highlight the importance
of thin clients,” said HCL's Balaji.

Training SPs helps them to pitch the product to the customers, felt Parekh.
“For an effective pitching of the thin clients, SI/SP requires to study the
client's requirement and here training comes handy for them,” claimed Parekh.

However Saraf of Seal Technologies felt that sometimes switching over to thin
clients take a while, especially if recent system upgrades have been carried out
by a client. Saraf also added, “Adoption rate primarily depends on whether the
inquiry has come in from the customer himself. The conversion to thin clients in
case of sales pitch is not always fruitful since organizations want to stick to
the existing system, which has been using it. In cases, where organization is
looking for a hardware upgrade, adoption would be easier.”

Exquisite Future

There has been a constant increase in the adoption rate of thin clients
among the users. Saving of power, secure data, total cost of ownership are the
main reasons for instigating the existing desktop users to go for thin clients.

“People are preferring thin clients architecture to existing system. More
than anything the value of thin clients spreads word to mouth and the benefits
they reap out prompts users to stay by their choice and further escalate their
operations within thin clients. Once a customer gets adopted to thin clients, he
would stay there forever,” guaranteed Balaji.

As the margins have always decided the legacy of any trade, there is no
second thought that even thin clients' future depends on the margins. In current
scenario with mall culture, it is very tough to get enough margins to survive
and to provide better services to their clients.

“In thin clients, SIs/SPs can get good margin with less efforts and they can
make more profit with minimum manpower. SIs/SPs could explore this market as
they did before some years ago with desktops; one of the biggest advantage in
thin clients is the quantity that is ordered,” Dave claimed.

Balaji of HCL felt that even the small traders have started selling thin
clients. The major reason behind this is the opportunity in this space and the
margins. “SPs/SIs can easily earn margin of 13 percent over all and can also
vary from place to place,” he noted.

Unless partners understand the pain involved in deploying this architecture,
they cannot be successful in their implemen­tations. Thin clients industry is
here to stay.

NR Sethuraman

sethuramannr@cybermedia.co.in