The thin client market for the Asia Pacific excluding Japan (APEJ) region continues to grow significantly, pointing to a solid future for this form of 'lean and mean' computing for large enterprises. The APEJ thin client market is expected to grow strongly over the next five years, with a compound annual growth rate (CAGR) of 21.4 per cent. This growth will be driven primarily by India and the PRC, with good support from Singapore, Indonesia and Thailand.
Although the slightly more matured markets of Australia, New Zealand and Taiwan are not expanding as rapidly, a double-digit Compound Annual Growth Rate (CAGR) in all these countries is evidence that the installed base in these markets is still not as ripe as levels of PC penetration, and good opportunities exist for thin client vendors and solution providers across the region.
Ultimately, the benefits of thin client computing are aplenty, and have never been more easily accessible in the Asia Pacific region than right now. With security and Green IT at the tip of every IT manager's tongue, thin clients are an effective and almost ideal weapon in the battle to maximise ROI during tougher economic times.
Low cost and centrally-managed
Also called a 'lean client', a thin client is a low cost, centrally-managed computer without peripheries such as CD-ROM players, diskette drives, and expansion slots. The thin client approach is to limit capabilities to only essential applications with most running across a network from a server. Both hardware and software upgrades are only required on the central server, saving hardware costs and installation hours. Thin clients have no hard disks-no moveable parts-so require very little maintenance.
Thin clients are also generally less vulnerable to malware attacks, have a longer life cycle, use less power and are less expensive to purchase. Some researchers maintain that thin clients use 50 per cent less power than PCs, which consume an average of 85 watts, while thin clients, including their server, consume between 40 and 50 watts.
With PC replacement cycles across APEJ expected to ramp up again in 2009 and 2010 as existing PCs reach the end of their current lifecycle, it is likely that some IT managers will start looking at alternative means from the regular desktop environment, in order to lower total cost of ownership (TCO), and improve hardware manageability.
As software-as-a-service (SaaS) becomes more accepted, thin clients and blade PCs are likely to replace desktop PCs in many work and educational environments.
As both vendors and end-users push towards virtual desktop environments, and application delivery software vendors, such as Citrix, focusing on this segment within the Asia Pacific region, thin client uptake is expected to grow even faster. Advancements in virtualisation software that enables a non-degraded user experience when running even resource hungry applications remotely, has opened the door to adoption of virtualised environments and thin clients across new markets, and in entirely new industries.
With ever increasing hardware sprawl, the more aware IT managers are open to deploying thin clients for users that may not require permanent full notebook functionality.
While call centres, trading floors, transport and point-of-sale environments have traditionally seen good thin client adoption, new users can now come from completely disparate industries, and can be used by knowledge-based workers in marketing, accounting, sales, and even certain levels of management.
Encouraged by the increase in operational efficiency that organisations have reaped from server virtualisation, companies are now growing more open to the idea of desktop virtualisation, and thin clients can play an ideal complementary role as the access terminal across various verticals. Governments-education, healthcare, and financial services segments-which traditionally have been strong proponents of thin clients, will continue to see expansion over the forecast period.
APEJ Thin Client Market Dynamics
* Across the various verticals, the predominant role of thin clients across the region has shifted away from the government to financial services as the leading vertical for thin client adoption, from the first half of 2006 onwards.
* The key markets of Australia, India and China captured 86.4 per cent of all thin client shipments across APEJ in the first half of 2006, indicating that the distribution disparity between markets with larger populations and smaller but matured economies leans towards the former.
* However, countries with a smaller installed base will not necessarily post stronger growths in the coming years; of all individual countries, China and India are showing two of the highest CAGRs through 2012, expanding 22.1 per cent and 20.6 per cent respectively.
APEJ Thin client challenges
The largest challenges across the region include:
* Educating not only the CIO, who many times knows about thin clients, but also the entire suite of C-level executives about the benefits of thin clients, such as lower TCO, given that these are not always immediately evident;
* Properly Training IT managers to reap the full benefits of a thin client or hybrid network;
* For the thin client vendor, sourcing a capable and reputable channel partner is vital, not just for deployment and credit purposes, but also to enable strategic consistency across countries. Given that thin client vendors are generally smaller in nature than multinational PC vendors, channel partners are seen as equally important in contributing to whether this form factor will take off in a particular country, as well as whether the vendor itself will gain any traction in that country.
* An essential way to gain a foothold is a proper marketing campaign designed to effectively educate IT managers not just about the benefits of a particular thin client vendor's solution, but the benefits of switching from the traditional PC-centric model to a thin client rollout. This takes time to change mindsets, especially if there are any initial disruptions during implementation, and many advantages are often disregarded, or lost, to IT managers who care more about day-to-day operating efficiencies. Therefore, the ongoing partner support, from phase 0 to completion, is vital.
Reuben Tan is senior research manager at IDC.
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