Oracle Corp. chairman unveils $199 internet device for schools

Oracle Corp. chairman Larry Ellison is banking that he didn’t have the wrong product five years ago—only the wrong market. This time, he’s targeting your schools.

Ellison unveiled a $199 internet machine on May 8 targeted at the education and consumer markets. The presentation was made before an audience of students at a performing arts high school in Dallas.

Calling it “this amazing $199 computer,” Ellison said the device “is going to allow us to put a computer on every child’s desk” by 2005.

Five years ago, Oracle and Sun Microsystems Inc. joined forces to create so-called network computers for business customers. The machines were a commercial bust.

Greg Blatnik, an analyst with Zona Research, said the earlier $500 computer was designed mostly to break the grip of Microsoft Corp.’s Windows operating system on corporate America’s desktops.

The new machine, he said, might be better targeted.

“We’ve got many examples of internet appliances that are at least finding some niche in the market, sometimes a substantial niche,” Blatnik said. “Schools need products that are pretty solid and failure-proof … These types of devices fit into that market really well.”

Unlike a personal computer, the device lacks a hard drive. Instead, users who connect it to the internet will be able to check eMail and surf the web.

Ellison said Oracle, the giant database software company based in Redwood City, Calif., will donate 1,150 of the machines to 23 Dallas schools.

The machine is being marketed by The New Internet Computer Co., an eight-employee firm based in San Francisco. Ellison, who owns about one-fourth of Oracle, is the primary owner of the privately held company.

The computer, named the NIC (New Internet Computer), is being made by a subcontractor in Taiwan, said Gina Smith, a former newspaper and television reporter tapped by Ellison to be the new firm’s chief executive.

The machine runs on a Linux operating system, has a 266-megahertz microprocessor, 64 megabytes of memory, a 56K modem, and 24-times CD-ROM drive. Monitors are not included, although Oracle’s philanthropic arm will give away monitors to schools, Smith said.

Schools would still have to obtain internet access elsewhere, either through paid or free internet service providers, though most schools already have networks through which students can connect to the internet.

Cheap internet devices have tried and failed before, and the NIC will face competition from machines such as the i-opener from Netpliance Inc., which currently costs $99, though users have to commit to a $21.95 monthly internet access fee.

Stephen Baker, an analyst at PC Data in Reston, Va., questioned whether the NIC will do any more for Ellison’s considerable wealth than the earlier network computer.

“Chances are, at $199, the profit potential is kind of limited. The way you make money is add-on fees,” such as for internet access, Baker said. The NIC, however, is not going to get involved in providing internet access, officials said.

“We’re making money at $199, but it’s a narrow margin,” Smith said. “The way you make up for that is in volume. We’re going to sell a gazillion of these.”

The question remains whether schools will buy them.

“When you look at education today, you’re getting more and more applications on the internet. This is a perfect vehicle for getting to those applications,” said Ruben Bohuchot, chief technology officer for the Dallas Independent School District.

“Do you need a hard drive to store data? No, there’s a server somewhere that can do it for you,” Bohuchot said. “What does it matter if [those data sit] in my office at home or somewhere else?”

The NIC devices aren’t intended for data-intensive applications such as video editing. But for simple word processing and internet access, Bohuchot thinks they might be ideal for schools.

“There’s a lot of people who want to have access to the internet, and this is an affordable way to do this,” he said.

Oracle Corp.

Oracle’s academic initiative

Dallas Independent School District


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