A question bankers once faced in their branches - whether to deploy personal computers or "dumb" terminals - has returned with the advent of network computers.

Touted by vendors like Oracle Corp. and Sun Microsystems Inc., network computers, or NCs, are stripped-down PCs built to rely heavily on powerful networked server computers. The idea is that doing without "desktop intelligence" can save money on purchase and maintenance.

Many banks that "have gone through the pain of managing and maintaining thousands of PCs are looking at these network computers now," said Meir Gil, vice president and senior banking technology analyst at Republic National Bank of New York.

Comparing the five-year cost of ownership of Windows 95 desktops versus various types of network computers, the Gartner Group estimated NCs would come in 31% to 39% cheaper.

The savings are "certainly significant, but it's not the 50% or 70% or 80% some of the vendors talk about," said Audrey Apfel, a research director at Stamford, Conn.-based Gartner Group.

Some of the savings may be diluted by spending required on the server and network side. But thin-client devices might be a "very good fit" for the branch environment, Ms. Apfel added.

Some observers are less optimistic about NCs.

David Floyer, research director at International Data Corp., Framingham, Mass., said the network computer is "the wrong tool" for the branch. A better application would be for consumer use in remote electronic banking.

Mr. Floyer does expect client devices to become "skinnier." Less-used applications such as facsimile would be stored on server instead of client machines.

The talk of heavier reliance on networks has some analysts experiencing deja vu. Low-function, or dumb, terminals connected to remote mainframes operated on a similar principle, with the computing power concentrated centrally. In the thin-client incarnation, servers occupy a modified mainframe role.

However, this time around, the network computer can communicate with a number types of hosts.

Still lacking are banking applications for this brand of distributed computing. "We have to have some software that will run in that environment ... before it's going to be of much interest to anyone," said consultant Carl A. Faulkner of M One Inc., Phoenix.

But with manufacturers making their NCs Windows-friendly, it is only a matter of time before banking applications become available.

The thin-client architecture is becoming "increasingly appealing" next to bank hardware that approaches obsolescence, said James Moore, president of Mentis Corp., Durham, N.C. Many banks' older generation PCs are not powerful enough to run the Windows NT operating system.

For the past six years, Republic National has been running its own version of a thin-client/fat-server network using X terminals, which have high-resolution display.

"I personally consider our X terminals network computers. The fact is, our vendor has actually changed the name of the X terminals to NetStations, but it's the same box," Mr. Gil said.

Running 2,200 X terminals and 114 servers in 100 branches has required a staff of one and a half people. "If I had 2,200 PCs, we would probably need a staff of 25 people to manage and maintain them," Mr. Gil said.

The bank runs the International Business Machines CT 6000 system on its branch terminals along with Applix Works office automation software.

"We see the future going toward a Web-centric environment," Mr. Gil said. The bank wants to build a set of reusable software objects for transactions across various delivery channels.

When the Web-based transaction system is implemented, the only change the bank expects to make to its X terminals is adding more memory.

Republic National expects others to follow toward a thin-client architecture. "There's no way they can justify having to upgrade their PCs every few years and also the cost of maintaining and managing a PC network," Mr. Gil said.

There appears to be a debate over how closely the X terminals and NCs are related. Many X terminal manufacturers have begun producing NCs, and some will even upgrade their X terminals to run Java applications.

The network computer is "more complex" and a "new animal," said Lou Anzalone, director of marketing for HDS Network Systems Inc., King of Prussia, Pa. Its version of the NC ranges in price from $699 to a few thousand dollars. The company said some banks have expressed interest, but none are using the devices.

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