When eMachines brought the $400 PC to market in 1998, some people thought prices couldn't go any lower. But now the founding CEO of that company is heading up a new venture and wants to bring that price down further—to $200 per seat and below.

NComputing plans to bring PC desktops to the masses through inexpensive thin clients enabled through a connection to ordinary PCs. The Redwood City, Calif.-based company has already shipped 200,000 units, targeting the lower education market in the United States and multiple markets in emerging countries.

"CPUs today are becoming infinitely powerful," said NComputing CEO Stephen Dukker, who joined the company just over a year ago. "Hyperthreading and dual-core is what really woke this technology up.

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"Multi-core is a blade server on a chip. We are the first people unleashing that potential," he added, noting that most mainstream software is not built to exploit multicore processor technology, but NComputing's devices are doing just that.

Part of NComputing's U.S. sales strategy involves getting on the radar of school districts by targeting lower-education directly, then inviting their channel partners. The vendor plans to find business with rural K-12 districts to avoid the politics in larger metropolitan school districts. And because they have set budgets, schools don't save money by buying lower cost PCs. Rather, "they buy more," said Dukker.

Following a customer win, the company would circle back to talk to that school's VAR about signing on. Gross margin on the $200 unit is $60. If that doesn't seem like much, Dukker points out that in many cases the VAR is also able to sell the customer a new server to work with the devices. In addition, installation time is expected to be 25 minutes, Dukker said, and maintenance can be simplified because there is only one PC or server to service per multiple desktops.

The low-end version of NComputing device's consists of a three-port PCI card for a PC that requires only a half-watt of power and is priced at $200. Three devices the size of thicker floppy disks can be attached to the card, and individual keyboards, mouses and monitors are then plugged into each of those devices to create three virtual PCs at a price of about $70 per seat. Another user can use the actual PC.

"It's not for 3D gaming or watching DVDs," said Dukker of the device's performance. "We don't recommend it for knowledge workers." But it also doesn't suffer the performance problems of some earlier thin clients—issues such as curser lag and low-end video problems, according to Dukker. NComputing's current demo of the device features a video streaming from CNN's Web site.

NComputing also offers a slightly larger device—about the size of a thin hard-back book—that plugs into x86 servers that can enable up to 300 virtual PCs for $200 each, not including keyboard, mouse and monitor, Dukker said. Prices will drop as time goes by, he added. None of the devices work with Apple Macintosh technology. But the devices do support other terminal environments.

In addition to the education market and emerging countries, NComputing has also worked with businesses in the United States, and claims the Yellow Pages in the Central Valley of California among its customers. Another big win was through its Hong Kong partner Targa, the company that equipped 500 WTO delegates with NComputing desktops to use during the conference in Hong Kong in December 2005.

The reputation of thin clients of years past has some VARs skeptical about the performance of those from NComputing performance capabilities, sight unseen.

"As far as technology goes, I would expect it to work fine if they are just doing word processing and Web surfing—applications that don't take up resources," said Joshua Brodbent, president of Any Way Computer in Wynne, Ark., which counts many schools among its customers. Broadbent was not familiar with NComputing, but questioned whether the devices would work for some of the common applications at the schools he served.

"They may run into problems with secondary education," he said. "I don't see a server running 25 to 30 copies of Quick Books at the same time."

Brodbent was not bothered by NComputing's approach of selling to schools first and then talking to the VAR.

"I'm the kind of person who says show me how it works first. I would have to see it work in a real world environment, not a lab," he said.