The resurgence of 'dumb terminals' a threat to Microsoft?

Posted Jan 31st 2007 5:28PM by Brian White
Filed under: Competitive Strategy, Microsoft (MSFT), Sun Microsystems (JAVA)

"Dumb terminals" are merely screens and keyboards that retrieve and send information to and from a central server. Are employers racing all over the place to get rid of those three year-old Microsoft Corp.'s (NASDAQ:MSFT) Windows desktops that sit atop almost every employee's desk and workstation in order to install "dumb terminals?" Don't count on it for most.

This issue has risen as a competitive threat to Microsoft before (Sun Microsystems Inc. (NASDAQ:SUNW) has particularly been a huge advocate of "light desktops"), but I don't see this going anywhere soon for the majority of companies. The costs to switch out thousands of Microsoft-powered PCs to data-entry systems that don't have local storage devices (like hard drives) and local desktops (for playing solitaire, heh) may -- over time -- enable customers to save money by not having to "refresh" Windows machines every three years or so.

Here's my question -- why do Windows machines need to be "refreshed" every two or three years? I'm pretty sure that the Windows XP machines from 2001 are quite capable of running most software in 2007 (sure, with perhaps some memory upgrades and such), so why are companies so quick to replace perfectly good machines? Somebody's sales pitch is working.

[Disclosure: I own MSFT shares as of 1-31-07]

Tags: Dumb Terminals, DumbTerminals, Microsoft, MSFT, sunw

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Reader Comments (Page 1 of 1)

1-31-2007 @ 11:45PM

arthur Rubin said...

While your overall argument is valid about replacing Windows machines every 3 years, you example of "Windows XP 2001" is off the mark. XP did not come out until 3-4 years later if I recall. Windows 98 and 2000 were running most machines in 2001. And yes, there was a need to replace those unstable systems. Not only that, but machines back in 2001 were not capable of being upgraded to the memory level of 2007 machines, particularly for RAM. Technology marches on... Don't be left behind.

2-01-2007 @ 12:06AM

Mark Little said...

Microsoft forces replacement by ending support on the o/s. A windows 95 client will run telnet to the server without a problem but once microsoft drops support, no more security updates and vendors like Mcafee will also no longer support. What IT manager wants to put themselves at that high a risk when they can count on microsoft to market heavily to upper management. Dells happy, Microsoft is happy, and every other software vendor that can charge for an upgrade is happy.