Hewlett-Packard has agreed to pay $214 million to add thin-client computing systems vendor Neoware to the Business Desktop unit of its Personal Systems Group. Neoware brings a wireless and Linux-based thin-client dimension to HP’s existing portfolio of Windows-based thin-clients, blade PCs and virtual desktop infrastructure (VDI) products, which all aim to reduce the cost and complexity of enterprise desktop management, and hardening their security by shifting to server-based systems.

HP’s push into server-oriented client computing solutions has been accelerating this year. In February, HP announced the global availability of its blade PC-based Consolidated Client Infrastructure (CCI) – products that had previously only been supported in the US. Since then it has also broadened its support for VDI-based solutions, such as those based on VMware’s VDI software.

Earlier this year IDC said Neoware and HP  held 12.7% and 19.2% of the global market for thin-client computing systems market respectively. Their combined customer bases should now put HP on a nearly level footing with the market leader Wyse, which IDC credits with controlling 33% of global thin-client sales.

Rival thin-client system vendors are likely to tout HP’s predatory move as evidence that their market is finally coming of age. In fact, the deal is more likely to signal the beginning of the end for conventional thin-client computing technology, which is looking increasingly redundant in the face of cheaper, and more flexible VDI-based alternatives.

Klaus Besier, Neoware’s president and CEO, conceded as much during his company’s third-quarter results conference in May, when the company reported a decline in revenue to $22.1 million from $27.8 million in the previous 3Q. “We believe that the next level of growth for both the [thin-client] market and for Neoware will be impacted by the interest in virtualisation, which has contributed to slower growth for us” he said.

Further reading

Thin-client computing

Desktop diet