The thin clients' lack of success is hard to understand if you look at the market from the outside. Who wouldn't want a PC experience that worked like an appliance? After all, some of us do look back at certain aspects of the old terminal with fondness. You had to wait for the CRT to warm up, sure, but you didn't worry about viruses or software updates, and the whole thing was as reliable at that time as a TV.
There have been many efforts to replicate this experience. Oracle and Sun both tried to take out Microsoft - and failed. Clear Cube attempted to embrace Microsoft - and faired only slightly better. Wyse ended up with a far smaller market than it should have had, given that the potential demand for an appliance-like, virtual desktop experience was near universal.
First Thin Clients Performed Poorly, Cost Too Much
When thin clients were created in the 1990s, they had two primary configurations: A shared server or a dedicated, PC-like back end. The server-based configuration could, mechanically speaking, scale easily, but performance degraded sharply. Users didn't like it. The PC back-end approach addressed the performance problem, but it cost more than just a PC. In the end, you had rack after rack of PCs being accessed remotely.
The first thin client makers, Oracle and Sun, didn't understand PCs. Oracle was a mainframe company; Sun sold servers and workstations. PCs were toys to both companies and they couldn't embrace what they didn't understand. The PC back-end folks were PC guys, but they didn't understand servers and the need for shared resources. The solution, then, blended of server and PC technology. This required a very specialized server that just didn't exist - and the skills needed to create it didn't exist, either.
Better Networks, Servers and Clients All Help the Cause
The concept of the cloud, and the requirement to parse out performance more granularly, is what changed. VMware could take a server and better divide its resources though virtual machines; initially, it was virtual servers, but the technology worked with virtual workstations and PCs equally well.
We still needed servers tuned for this kind of effort, though - and Nvidia has recently stepped up with its Grid rack mounted servers, which are tuned specifically to provide PC-like performance and assure that any level of performance could be provided from the cloud. (Grid isn't part of the Cloud Connect announcement, but it does showcase the kind of performance that Dell could provide. Plus, Dell and NVIDIA have been partners for some time.)
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