HP to buy Linux thin client desktop company

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Jul. 23, 2007

Hewlett-Packard announced on July 23 that it would be buying Neoware, a provider of Linux, Windows CE and Windows XPe OS thin client computing and virtualization solutions. HP will be paying $16.25 per share, or an enterprise value (net of existing cash) of approximately $214 million on a fully diluted basis for the company.

In a statement, HP declared that this acquisition as part of HP's strategy to expand in growth markets and further its leadership in personal computing. HP made a particular point of stating that acquiring Neoware is intended to accelerate the growth of HP's thin client business by boosting its Linux software, client virtualization and customization capabilities, expanding its regional sales footprint and broadening its hardware portfolio.

Neoware has long claimed that among the three largest thin client vendors, it is the only one that is "committed to the Linux operating system."

Neoware offers binary compatible Linux thin clients based on industry standard Linux. The company claims that it has made Linux so intuitive you don't have to know anything about Linux to set up or use NeoLinux. NeoLinux is a thin-client optimized Linux. It is built on the Linux 2.6 kernel. It includes built-in support for Citrix remote applications and the NoMachine NX client. NeoLinux also comes with Firefox, Java 2, Macromedia Flash Player and Adobe Acrobat Reader.

Its thin client Linux features a secure, read-only file system that's virtually virus proof because applications run on the server, not the desktop. This thin client Linux employs a hardened default security profile and a streamlined user security environment.

Neoware also gives users the option of the management solution they prefer for its Linux line, including ezRemote Manager, IBM Tivoli, Altiris Deployment Server and Microsoft SMS (Systems Management Server) 2003.
The company currently offers five dedicated thin-client stations for Linux: the Neoware c50, e90, E140, e370 and m100. Each client station comes with a minimum of Citrix's ICA, (Independent Computing Architecture); RDesktop, the open-source version of Microsoft's RDP (Remote Desktop Protocol); the TeemTalk terminal emulator; Netscape; X.11/XDM (X Window Display Manager); Snap-ins; and an interface that can be customized for users.

Each thin-client unit also comes with a variety of ports. These include the older serial, parallel and PS/2 ports and the newer USB 2.0 ports. Each system supports a minimum of 1280x1024 graphics.

"Our objective is to become the preferred brand of thin clients and software for virtualized client computing," said Kevin Frost, HP's vice president of business desktops, personal systems group, in a statement. "Thin clients are an important component in today's overall computing strategy and play a critical role in HP's virtualization strategy. Acquiring Neoware confirms our commitment to thin client computing and client virtualization solutions."

The companies claim that thin clients provide reduced maintenance costs, minimal application updates and a higher level of security compared to other desk-based computing products. The solid-state devices connect over a network to a server where all processing and storage takes place.

The transaction will combine the respective strengths of each company: Neoware's Linux-based thin client solutions and software with HP's thin clients based on Microsoft Windows(R) XPe and Windows CE and its virtualized client solutions, such as blade PCs, blade workstations, virtual desktop infrastructure and server-based computing.

HP plans to leverage the acquisition to remain an industry leader in reducing its environmental footprint through reduced noise, power and packaging versus desktop PCs.

"Acquiring our company will further strengthen HP's PC business as it extends its portfolio of remote client solutions and delivers secure, low-cost access to centralized personal computing," said Klaus Besier, Neoware's president and CEO. "We are proud to be joining HP, where together we will continue to promote the shift to virtualized client computing."

Following completion of the transaction, HP plans to integrate Neoware into the Business Desktop Unit of HP's Personal Systems Group.

—Steven J. Vaughan-Nichols

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Use of this site is governed by our Terms of Service and Privacy Policy. Except where otherwise specified, the contents of this site are copyright © 1999-2008 Ziff Davis Enterprise Holdings Inc. All Rights Reserved. Reproduction in whole or in part in any form or medium without express written permission of Ziff Davis Enterprise is prohibited. Linux is a registered trademark of Linus Torvalds. All other marks are the property of their respective owners.