Sign in with
Sign up | Sign in

Prediction: Ncomputing Is The Next Google

By - Source: Tom's Hardware US | B 14 comments

Chicago (IL) - Once in a while we come across a company whose idea and products just make sense. Ncomputing is such a company and it may take some time until you will hear more about its products, but we do believe that the firm has what it takes to popularize cloud computing for the masses and become Intel’s biggest threat yet. We are talking about the ability to split one PC into possibly dozens of sub 5-watt computers with a cost of less than $100 each. To us, it is the first convincing cloud computing idea that has the potential to reach more users than any other computing product before.

Nine years ago, my editor-in-chief asked me to research a then new Silicon Valley start-up and interview the company’s president for a brief article. Back then, there were thousands of start-up and to deal with one specific one was just another story and you did not expect to hit anything spectacular. The PR director of the 45-people-strong start-up welcomed me in what he called "half-baked" offices and led me to the president’s office, a Stanford student who seemed to be more excited about his 3D mouse and was not concerned about dirty dishes taking up more than half the space of his desk. It was your average over-the-top Internet start-up environment, but this company had a fresh idea how to make information on the Internet available to users and its idea how to monetize that idea was called crazy at the time. But once I had seen the technology in action and had met the minds behind it, I told my editor-in-chief that this company would replace Yahoo and our Internet publication should change its advertising model.

The company today has more than 16,000 employees, the president was Sergey Brin and the company was Google.

Ncomputing feels just like it. It operates under the radar of the big boys, but makes visible progress in a high-growth area that needs innovation. To me, Ncomputing can be, with determination and luck, the next Google. Here is why.

Ncomputing: How to create an $11 computing device

Last week, Cherrypal launched its $250 cloud computer with an innovative approach to attract average computer users who don’t want to edit videos and play games, but simply browse the Internet, write emails, watch YouTube and create simple documents. Following the story, we were contacted by a representative for Ncomputing - a company I had not heard of at the time - and an offer to provide information about a "$70 PC". We finally had a chance for a briefing with the company’s chairman and CEO, Stephen Dukker (founder and former CEO of eMachines), to learn more about this cheap PC.

Realistically, calling the Ncomputing devices PCs is not correct, since these boxes do not carry components you would expect to find in a PC - such as a processor, memory or storage devices. Instead, the purpose of the Ncomputing devices is to tap into the horsepower of a single PC to enable the creation of multiple computing stations. The computing devices are access terminals that share the performance provided by a host PC. Up to seven computing devices of Ncomputing’s X-series connect via direct connections, the L-series supports up to 30 users via Ethernet.

Each box carries a minimum of hardware with the main component between an ASIC. The result is an extremely low production cost of about $11 per seat, according to Dukker.

Hardware and software

The base version of Ncomputing’s product line is the X-series. The devices connect via CAT 5 cable to a PCI card with three Ethernet ports that is installed in a host PC. Since there are typically two free PCI ports in a PC, the technology supports up to six connections to Ncomputing boxes. Add the host PC as a computing device and you end up with seven Internet "computers". Dukker said that a $350 PC with a basic Core 2 Duo processor and 1 GB of memory is enough to power this platform and run, for example, MPEG-2 playback, TV playback via a Sling Player, YouTube video playback, DVD video playback, as well as productivity applications such as Microsoft Word, PowerPoint and Acrobat Reader at the same time.

The power consumption of each computing device is rated at about 1 watt. Since this version uses direct connections, the maximum distance between a host PC and a computing device is 10 m or about 30 ft. The X-series comes in a $200 package, which includes one PCI card and three access terminals - which translates into a cost of $66.67 per seat (not including the host PC.)

The L-series supports up to 30 computing devices, priced at $150 per seat. The connections are established via Ethernet an Ncomputing claims that a $500 quad-core server would be enough to run all 30 devices, which are rated at a power consumption of 5 watts each.

X-series and L-series networks are glued together by a virtualization software that was developed by a European company (that was merged into Ncomputing) called Hydrapark. This software layer creates a self-contained user environment under one operating system provided by the host PC (Linux and Windows are supported.) Ncomputing bundles the software with the hardware free of charge and claims that it could scale the application to potentially hundreds of seats.

Read on the next page: What the $70 computing device is and what it is not, Why Intel should watch

What the $70 computing device is and what it is not

Clearly, there is a reason why these computing devices are called access terminals and not PCs. You can’t use these devices for gaming or video editing. But you can use them to create a relatively cheap network of general purpose network computing units that are powered by one capable PC. If Internet, email and basic productivity applications as well as media playback is all you need on multiple computers, then an Ncomputing package is all the hardware you need to build a network of Internet computers in your home.

At this time, Ncomputing targets specific corporate and institutional applications areas such as manufacturing environments, education and government. It is also a product that is aimed at emerging markets to enable Internet access for people who earn $3000 or less per year.

The usability for U.S. consumers isn’t as convincing, but, if you think about it, such a product makes a lot of sense for families who would like to have multiple simple Internet devices available within a home. Simplicity and low power consumption are big selling points, but there is also less maintenance: You simply care for one host PC and the rest of the network takes care of itself. However, on the other side, if your host PC is down, you lose all connected computing stations (the L-series offers an opportunity to install a backup server via Ethernet.)

Dukker told us that he expects to have a consumer cloud computing device for the U.S. ready by H2 2009. It is interesting to note that these devices are flexible in their application areas and Ncomputing apparently has begun to sell its boards to companies that are developing Internet Kiosks, set top boxes, all-in-one monitors and TVs.

Why Intel should watch

Dukker said that Ncomputing has sold about 1 million computing boxes in 80 countries over the past 20 months. Compared to Intel’s 160 million+ sold CPUs per year, that is a drop in the bucket.

However, companies such as Intel need to sell more chips every year. In an increasingly saturated market,that means that Intel not only needs to expand its product portfolio, it also needs to expand its customer base. The most promising customer bases are mobile users on the one side and several billion potential customers in emerging markets on the other. Intel has been feverishly working to conquer emerging markets: While the Atom processor appears to be limited to SFF notebooks and MIDs at the time, it will also be Intel’s product for emerging market computers. Intel can produce the chip for $6 per piece, but somehow we believe that the company has shot itself in the foot with outrageous tray pricing. The low-power version of Atom is priced from $20 to $135, excluding $25 for the necessary SCH chipset. The more power hungry nettop/netbook version of the chip with Diamondville core is priced from $29 to $44, excluding the chipset.

Intel can tell us as often as it wants that prices are determined by market demand, but we doubt that these prices will allow Intel to reach millions of new customers in emerging markets. And as long as Intel ignores this opportunity, companies such as Ncomputing could be able to establish their customer base in potentially huge new markets - with a product that can be built for $11 per seat.

If you think about Intel’s strategy to sell more chips every year and compare it to Ncomputing’s strategy, it appears that Ncomputing works entirely against Intel’s model. Splitting one PC into seven computing devices means that a processor manufacturer will lose a revenue opportunity of six network computers. As a side note, Dukker said that Ncomputing is working with AMD to deploy host PCs. He told us that AMD concluded that there is no possible to market a PC with a profit for low-cost markets and apparently decided to go with a access terminal solution to expand its reach.

Ncomputing’s cloud computing model is a no-brainer in third-world countries and could make a lot of sense for average American and European household as well. Popularizing cloud computing in traditional computer markets will be difficult, since people are used to own their software and store files locally. However, users who are new to computers will not need to be convinced of the benefits of cloud computing - especially if a traditional PC is out of their reach.

Dukker may have found a formula how to create a product that is affordable for people in emerging and third-world countries and still make money on it. With a production cost of $11 per seat, he has enough room to adjust his pricing model in different markets and different environments.

It is not difficult to imagine Ncomputing to quickly gain traction in emerging markets and appeal to users in mature markets as well. If this is the case, Intel may have a big problem and could face its biggest threat yet. Of course, until Ncomputing isn’t ready to play with Intel just yet, but Dukker believes in his opportunity: "There are market dynamics even Intel can’t stop," he told TG Daily.

Cloud computing is one of the big business opportunities for IT companies these days. Ncomputing’s concept is the best I have seen so far. I will check back in a few years to see if my prediction about the next Google was right.

Discuss
Display all 14 comments.
This thread is closed for comments
  • 0 Hide
    digitalw , July 29, 2008 6:43 PM
    This idea is not fresh, it was already very successful more then 15 years ago or more, in time of Windows 3.1! I remember when i played DUNE, my brother has done some MS Office document and a colleague had some excel worksheet... and evrything was smooth on a 486DX 66MHz computer ! The card name was Stone"something", i don't remember now. But, it was very cool, just plug mouse, keyboard and monitor to the box and you got new computer to work on! i thinh max was 3 or 5 computers.
  • 0 Hide
    digitalw , July 29, 2008 6:43 PM
    i just remembered, the card name was LIGHTSTONE!
  • 0 Hide
    Anonymous , July 29, 2008 6:48 PM
    We in India Started using these products back in 2005 they are working well & efficient with many of our clients i.e. Manufacturing,IT Training centers, Sugarcane industries and also at rural villages where electricity is available for only 8 to 12 hours. as you mentioned nComputing is growing very fast at perfect time.
  • 0 Hide
    Anonymous , July 29, 2008 7:19 PM
    Sorry it was back in 2006. It is working well with Desktop Publishing, Tally Accounting Software. As I tested X-series with FarCry 3D FPS Game on Host machine and web surfing, documents, worksheets, Presentation applications on other terminals works good.
  • 1 Hide
    Anonymous , July 29, 2008 7:43 PM
    What about laptops taking over the PC market? I would not care to access a cloud setup if I have my own laptop.
  • 0 Hide
    nekatreven , July 29, 2008 8:19 PM
    IMO the point is not that this is a 100% new idea. The point is that the planning and execution look good on so many fronts.

    Just as an example, the cheapest HP thin client I can find on newegg is over $200.00 whereas costs on this relatively new and improvable platform could go up $30.00 a seat and still come in at less than half the cost.

    Think of coffee shops and grade school computer labs and places like that, and not just in 3rd world countries. Realize that this level of abstraction is still an infant when compared to the R&D time that has been put into traditional computing platforms. I'm looking forward to seeing if this will work well for home automation.
  • 0 Hide
    Anonymous , July 29, 2008 10:42 PM
    The Thinclient paradigm is older than myself
  • 0 Hide
    Anonymous , July 30, 2008 1:40 AM
    I work in an IT department at a hospital. We have tried the nComputing L130 thin client in our training room of 10 computers with the host machine stored in our data center. We were hoping to use these at nursing stations, but are not happy enough with the performance to give it a go. For now, we are sticking with standard PCs. In the future, we will try to experiment more with the L130 to see if we can overcome the problems preventing us from using it. If we can't, we may try HP's thin clients along with VMware's VDI solution.
  • 0 Hide
    Pei-chen , July 30, 2008 3:35 AM
    Sounds great, I have been looking for something like this 5 years ago but settled for a second PC. The problem now is whether the "second PC" is capable of running Bit Torrent and Sims 2.
  • 0 Hide
    Anonymous , July 30, 2008 10:44 AM
    And so the circle closes. In the 1970s you had one mini or mainframe and a bunch of dumb terminals; so nothing too new about this (good!) idea.
    As for the $11 per seat... anyone noticed that you also need a screen per seat? :-)


  • 0 Hide
    Anonymous , July 30, 2008 12:47 PM
    What they don't mention is the software licensing. I don't think microsoft is going to let them run off of one XP and one office license.
  • 0 Hide
    velocityg4 , July 30, 2008 4:22 PM
    I think the main purpose of this is the low cost compared to previous devices like this. My fathers business had either an 8086 or 80286 with 640K possibly less memory running XENIX with 12 dummy terminals connected and it ran them all fine and pretty quick. Four of these terminals were connected over 60 miles away by a dedicated phone line. But this system cost over $30K :o 

    This system was finally replaced 15 years later with a Pentium III 450mhz with 64MB RAM running UNIX and faster dummy terminals for a mere $15K. The main cost of this equipment was our propriety rental software.

    But as far as this device is concerned if you split a Core 2 Quad among thirty terminals at $70 a pop it seems that getting 30 PIII's off of craigslist would have more horsepower and be far cheaper. The advantage though is the much lower power requirement and use of new equipment.
  • 0 Hide
    knura , August 1, 2008 11:10 AM
    This has a cost savings from a maintenance point of view as well e.g. remote administration of small/branch offices - only one machine to administer. As for desktop software license cost, an open source desktop should work for majority of the users with OpenOffice, Firefox, applications ...
  • 0 Hide
    Anonymous , August 4, 2008 1:01 AM
    Just why bother for microsoft? let them do what they may. meanwhile run these devices in workplaces and schools on LINUX and OpenOffice.Org Suite. We have atleast 40 such systems running in our schools in Assam (INDIA) on LINUX, and we do not bother about MS. The more you bother about them, the more they will bother you with new useless upgrades and licenses.