Wyse Branching Out of Thin-Client Niche

Company announcing new software, services and products, including wireless handheld devices that will operate much like a Tablet PC.

Wyse Technology Inc., which has made its name selling thin clients, today will announce a strategy to expand its business beyond that niche by offering new software, services and products, including wireless handheld devices that will operate much like a Tablet PC.

The products and services themselves will be unveiled at the Citrix IForum 2002 show in Orlando, Fla., Nov. 3.

The San Jose, Calif., company currently supplies about 50 percent of all thin clients worldwide--both directly and via a reseller agreement with Hewlett-Packard Co. It sold 177,000 units in the second quarter this year.

In the coming months Wyse will introduce new hardware and applications, and set up its first professional services unit in an effort to change the perception of the company as simply a provider of "dumb terminals."

"In the past if you werent buying thin clients, then you had no reason to talk to Wyse, and thats a problem for us," said David Rand, director of corporate marketing. "What were doing now will give them plenty of reasons to contact us."

The software offerings include a new application, code-named Samson, designed to help manage PCs, a platform the company had previously viewed as simply rival technology.

Samson will enable IT managers to not only set up PCs as virtual thin clients, but will enable them to "lock down" those computers so that users will be unable to store data on the PCs hard drives. The lock-down feature will help assure sensitive business data will reside in central servers, rather than spread across potentially hundreds of PC hard drives.

Samson will debut in the first quarter of 2003.

On the hardware front, Wyse will continue to promote its traditional thin clients, such as the new Winterm 9450XP it will unveil Nov. 3 at the show that features embedded Windows XP.

However, it will also expand into new form factors, such as a wireless handheld, code-named Zeus, that it will launch in the first quarter of next year.

Zeus is a Microsoft Corp. Windows CE-based handheld that appears much like a Tablet PC, but will work as a wireless thin client, and therefore lacks the hard drive found on upcoming Tablet PCs. Utilizing 802.11b connectivity, Zeus will enable users to tap all their server-based applications remotely. For example, workers could bring their handhelds to a company conference room and readily access all their needed data just as if they were seated at desktop terminals.

Wyse also will produce a consumer version of its wireless handheld, code-named Cetus, designed to enable home users to access their Windows XP-based PCs remotely. However, the companys first consumer product will not be branded as Wyse hardware, officials said, but rather be branded and sold by a third party, which they declined to name.

In addition to new products, Wyse is forming a professional services business unit for the first time. Currently, Wyse offers services on a case-by-case basis to customers that demand them.

Although it remains to be seen whether Wyse will succeed in expanding into new markets, the company will continue to hold sway in the thin-client space, which International Data Corp. predicts will grow about 30 percent per year through 2006. IDCs projections are for 1.4 million units to be sold this year, with 3.7 million being sold in 2006.

Neoware Systems Inc., Wyses closest competitor, sold 49,245 thin-client units in the second quarter. HP sold 15,244, all built by Wyse.

Neoware bought the thin-client hardware lines of NCD Inc. and IBM this year and also is looking to branch out into software, said Howard Hunger, executive vice president of Neoware, of King of Prussia, Pa. Hunger said almost 100 percent of the companys research and development budget is being used on software.