IBM Sells Thousands of Thin Clients to American General Finance, SYSCO Corp., Others

Confirms Renewed Industry Optimism & Keeps IBM No. 1

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SOMERS, N.Y. - 28 Dec 1998: -IBM today announced that it has sold 8,000 of its "thin clients" -- the IBM Network Station -- to American General Finance, which views the devices as the most cost effective way of introducing new technologies to its employees. IBM has also just sold several thousand Network Stations to SYSCO Corporation (NYSE:SYY).

These purchases -- which capped a successful year for IBM Network Stations, and pointed to its continued acceptance in 1999 -- confirm experts' renewed optimism about alternatives to PCs. IDC predicts that the industry will ship 6.8 million units in 2002 -- up from 507,000 in 1998 -- while Zona Research says 13 million thin clients will ship annually within five years.
IBM enjoyed substantial success in 1998, selling thin clients to Volkswagon, Guardian Insurance, British Aerospace, Nike, Mazda, Loews Hotels, Ballys Hotel & Casino, Allied Signal, Boston College, Manheim Auctions, and First Union. Other transactions included 4,000 Network Stations sold to General Accident Insurance in the U.K., 1,500 to Fred Meyer Supermarkets and 1,000 to Good Samaritan Retirement Village.
Industry analysts such as Gartner Group and IDC consider IBM the most successful thin client vendor.
"We think 1999 will be the year when people make the move towards a 'thin' infrastructure," said Edward Petrozelli, General Manager for IBM's Network Computer Division. "In a future where computing will become pervasive, there will be a need for both regular PCs and a variety of 'thin clients,' and IBM is leading its customers into that new world."
Thin clients display the same programs as on a PC -- but because there are no moving parts, hard drives or diskette slots, they pose little risk of transmitting viruses, breaking down, or confusing users. Although the perception is that lower PC prices have eroded the luster of thin clients, businesses still pay nearly $1,600 on average for PCs, not including longer-term costs that are a third higher than thin clients. IBM Network Stations start at $499.
Since they are centrally managed, thin clients enable troubleshooters to fix problems and quickly load new programs from afar. Users can also travel across the world and access the same desktop programs they left back at home. These long-term benefits make employees more productive and save businesses money.
AGF replaced outdated dumb terminals with IBM thin clients at its more than 1,300 consumer loan branches, and will be using the devices for handling everything from loan applications to office productivity tools. AGF decided that thin clients were a more cost effective way of incorporating modern technologies -- like the Web, email and word processing -- compared to PCs.
With more than $10 billion in assets, 8,000 employees and more than 1,300 branches, Evansville, Indiana-based American General Finance is one of America's largest providers of consumer lending and credit related insurance products. AGF is a subsidiary of American General Financial Group of Houston, Texas -- one of the nation's largest diversified financial services organizations, with assets of $102 billion, and market capitalization of $18 billion.
SYSCO Corporation will be using the devices in more than 60 distribution centers to tap into information stored on IBM AS/400 and IBM RS/6000 servers. Before, separate types of dumb terminals were connected to each server; the thin clients will give users one convenient interface.
SYSCO is the largest foodservice marketing and distribution organization in North America. Generating in excess of $15 billion in annual sales, the company provides food and related products and services to approximately 300,000 restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. The SYSCO distribution network extends throughout the entire continental United States, as well as portions of Alaska and Canada.
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