Intel's Atom and the return of the thin client

Decades ago, one of the most viable arguments for major enterprises holding onto their "big iron" -- their aging mainframes -- was that they could still provide processing power for thin clients, the smaller and less expensive terminals that didn't need the speed to crunch numbers. Today, in the era of virtualization, the concept of shifting processing power back to the data center has been reborn, especially with the deployment of lighter-weight, single-core processors that only provide the power needed to render results.

With that, a thin-client manufacturer named Devon IT this week announced it's shipping a little PC called the TC5 that frankly isn't much smarter than many smartphones these days...but it doesn't need to be. It's shipping with Intel's single-core Atom N270 processor clocked at 1.66 GHz, which isn't much; it uses Intel's GMA 950 embedded graphics, which also isn't much; and it has Windows XP or Linux on board rather than Windows Vista, and you know the drill there now.
So what's its purpose? To serve as a wired or wireless network receiver and to pump data to the screen as fast as possible...and besides gathering user input, that's about it. Its design enables it to run one program -- maybe the only one it ever has to run: a desktop virtualization host.

The host Devon IT prefers is Citrix XenDesktop, which now utilizes a protocol called HDX to virtualize not only CPU processing but also GPU-related graphics, including 3D and multimedia, executing all of these tasks at the data center. All the real processing power is housed at the core, and only the results are distributed to the Devon IT display. Think of it like SlingPlayer Mobile, but for everyday processing -- your viewing device doesn't really need to be all that smart just to deliver the functionality you already own in your central processor.

Up to now, Devon IT had been producing TC2 thin clients using Via single-core processors -- right now, the single-core niches are pretty much Via's last stand, and it's getting big competition from Intel Atom. Pricing for TC5 is not published, and likely depends on quantity purchased -- IBM is partnering with Devon IT for marketing and sales. But to give you an idea of scale: As soon as TC5 was introduced, the company began a one-week markdown sale on the TC2: $159 for the first four units, and $59 for the fifth.

Who's this being marketed to? Right now, Devon IT is making its pitch to hospitals that are growing faster than they can keep up with, to schools that need IT infrastructures and that have limited budgets for putting PCs in every classroom, and -- get this -- to banks and financial institutions that are experiencing more limited growth opportunities in this weak economy.