IBM’s NetVista Joins the Appliance PC Fray

BM [NYSE:IBM] announced the availability of its new NetVista all-in-one and legacy-free computers, two new devices designed to simplify the computing experience. Fewer cables and smaller sizes make them easier to carry and set up. New drives, keyboards and "Access IBM" buttons make them easier to use. New networking and security features make them easier to do e-business.

With the optional IBM Portable Drive Bay 2000, the NetVista computers allow users to easily transfer data between computers. This means you can reduce the number of hard drives or CD-RW drives with a single, swappable drive that works in both ThinkPad notebook computers and NetVista desktop computers.

Features such as the embedded Security Chip, available on select models of the legacy-free NetVista S40, provide 256-bit encryption for extremely secure network and Internet transactions.

Market Impact

This year has seen a trend toward slimmed-down PCs as product offerings. Hewlett Packard [NYSE:HWP] and Compaq [NYSE:CPQ] already have similar business appliance PCs; Dell [NASDAQ:DELL] and Gateway [NYSE:GTW] have pitched their appliances to the consumer market.

Here's where the entry level NetVista stacks up:

	Processor	Hard Drive	Price
IBM NetVista S40	Celeron 566	10 GB	$699
HP eVectra D9898T	Pentium III 600	8.4 GB	$999
Compaq iPaq legacy free	Celeron 500	4.3GB	$499

IBM has a good mix of features and values. For $200 more than Compaq's offering, you get:

• Larger hard drive
  
  
• Faster processor
  
  
• E-mail and application suite (Lotus Notes client & Lotus SmartSuite Millennium)

IBM also includes free deployment and migration tools such as the System Migration Assistant, which collects user settings and data from an old PC and transports them to a new NetVista. The security features are a plus in highly secure environments, such as banking, but they do require additional software to be useful.

One minor point - IBM needs to address navigation on its NetVista eCommerce site. A simpler grid summarizing the differences among all the NetVista models would be helpful. When a site visitor sees "All in one from $1,799.00", but the "compare models" link brings up a grid which shows no models priced below $2,099, it's a little confusing.

User Recommendations

Organizations still committed to Lotus SmartSuite, or to a hybrid ASP/Terminal Server-hosted application paradigm, are going to have a hard time beating the S40 on price/ performance, particularly for general office workers who need only a browser, e-mail, word processing and spreadsheets. If Microsoft Office is a "must-have", the feature gap between the NetVista S40 and Compaq's iPaq narrows, but not decisively - since the iPaq doesn't include any application software in its base model.

We reiterate our prior points about appliance PCs - they may be cheaper to build and buy, but it remains to be proven if they are cheaper to deploy and support. Nevertheless, the NetVista is in the top tier of appliance PCs debuting this year.