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Palm Tries to Take the Desktop in Hand

Written By: R. Krause
Published On: October 27 1999

Palm Tries to Take the Desktop in Hand
R.A. Krause - October 27th, 1999

Event Summary

10/18/99 - 3Com's Palm Computing offspring will stand or fall on the willingness of large corporate IS groups to embrace an array of new devices, from personal digital assistants to cellular phones, that use the Palm operating system as their basic software.

This week the company, which will be spun off from parent 3Com early next year, will take a giant step in its effort to shift from gadget maker to systems vendor.

At PalmSource 99, the company will unveil server software that lets Palm devices bypass the PC entirely and exchange data with back-end databases and applications. With this product, called Palm HotSync Server, will be a pack of Palm and third-party interfaces, called "conduits," that handle the data exchange between Palm applications and a specific server-based enterprise resource planning suite or groupware application, for example.

Market Impact

This is an attempt to create a new corporate market segment, one "below" the current notebook/portable segment. Part of the focus is on lowering TCO1, since some estimates place TCO of networked Windows PCs at approximately $10,000/year. Although Gartner estimates Palm TCO at an unexpectedly high $2700/year (a figure we question), this figure is still significantly lower than for the traditional desktop.

The ability of a Palm device to link with enterprise-class applications such as ERP2 or groupware, if successfully implemented, means the Palm can now move "out of the shirt pocket and onto the desktop" (in a limited way). This will increase market growth for Palm devices, and palmtops in general, but it will not lead to faster market consolidation. Because a new segment is being created, it will initially lead to market diversification. Overall, we expect these devices to eat into some of the desktop space over the next two years.

In addition to the obvious increase in the hardware and software market segments, there will be a "pull" effect on the security and service/support markets desktop- and server-focused markets which presently pay little attention to Palm devices.

User Recommendations

This set of product has the potential of creating a shift in the current business computing model, by migrating the desktop down to the palmtop. However, as with all new technologies/models, users should be cautious about planning a wholesale change before having proof that the product(s) provide all the functionality expected, handle all the applications necessary, work robustly within a (limited) corporate environment, and operate seamlessly within a corporate network.

Even if these products meet all the criteria above, Palm devices will still only be viable for some targeted environments (because of their obvious limitations). Users planning to purchase equipment immediately will not be affected by this announcement. Companies planning their purchases for mid-2000, and who have done sufficient analysis of their needs and usage patterns, should consider this alternative.

1TCO: Total Cost of Ownership
2ERP: Enterprise Resource Planning

 
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