Dangerous perspective for MSFT and parts of hardware producers

The article in the WSJ describes what under the substantial economic strains may change the landscape of computer technology as huge savings may be possible. I am not a tech geek as I could evaluate the potential deeply but it does make a lot of sense but may take some time to implement its not a tomorrows switch solution but definitely a positive challenge for improvements which would have a major impact on some companies especially MSFT and INTC would be the major losers. some adjustments will be made as the economy goes into an ultimately challenging mode and forces everyone to save money in all area's.

Excerpt

IBM Creates 'Microsoft-Free' Desktop

Applications for Thin Clients Would Operate From Back-Office Server

By WILLIAM M. BULKELEY

International Business Machines Corp. is hoping to convince corporate customers that they no longer need Microsoft Corp.

IBM says it has created a "Microsoft-free" virtual desktop -- a complete suite of applications that run on a backroom server and don't require Microsoft software or costly desktop hardware.

The software package, available immediately, uses the Linux operating system and a set of IBM office applications that can be displayed on so-called thin clients, which don't have processing units or hard drives.

IBM, based in Armonk, N.Y., says pricing for the Virtual Linux Desktop would range from $59 to $289 per user, depending on what software and service level the customer chose.

IBM estimates that a corporate customer licensing the software would save $500 to $800 a year per user, compared with buying a license for Microsoft's Vista operating system, Office suite and collaboration tools.

Microsoft declined to comment.

A single back-office server running the IBM suite can run dozens of so-called virtual PCs. Workers' desks would still have a keyboard and a screen. Each worker also would be connected to the network through either a thin client, typically costing under $200, or an old PC that functions as one, also known as a dumb terminal.

IBM says that compared with a powerful PC that runs Vista, each virtual PC could save $250 in hardware costs and between $60 and $220 a year on electricity and air conditioning.

Keeping the software on central computers also makes it easier to repair and upgrade.

"Deploying your technology this way is going to save you something more than 50% of your total costs," says Jeff Smith, IBM's vice president for open source and Linux. "As customers face an increasingly challenging economic situation, they're looking at everything they're spending money on."

Computer companies have been promoting thin clients as an alternative to PCs for years -- with little success. But Mr. Smith says open-source software has caught up to most of the functions of Microsoft Office and that cost-cutting has become a much bigger priority for many corporate computer managers.

Al Gillen, an analyst with IDC Corp., a market researcher in Framingham, Mass., says only "a minority" of customers will want a Linux solution because of compatibility issues with other corporate users.

But Natalie Lambert, an analyst with Forrester Research, says that "interest in desktop virtualization is huge."

Besides cutting costs, she says, computer buyers like that data isn't stored on PCs, where it is easier to steal. She says some companies are starting to look at virtualizing most of their personal computing and predicts they will start deploying it in certain locations like call centers or offshore facilities.

IBM's software package comes with virtualization software from Virtual Bridges Inc. of Austin, Texas, and Ubuntu Linux from Canonical Ltd. in London.