Dell’s acquisition of Wyse indicates that server-based computing has transitioned from a niche market primarily around application delivery to a mainstream industry building on virtualization’s overwhelming success.

Citrix created the hosted desktop category which it called thin-client server computing, starting with the O/S2-based WinView and followed by its break-out product, the NT 3.51-based WinFrame which debuted in 1995. But by the time Citrix held the first Thinergy user conference in 1998, Wyse had been selling its Windows terminals for nearly four years. Wyse Chief Marketing and Strategy Officer, Jeff McNaught, and current Wyse CEO, Tarken Maner, co-invented the Windows Terminal to work exclusively with Citrix back in 1994.

Through the 1990s, the number of thin-client hardware manufactures continued to proliferate and rather than risk confusion, Citrix renamed the hosted desktop category “server-based computing” (SBC). IBM briefly joined the fray of thin-client manufactures, but most were small specialty players. Wyse continued to dominate the industry segment it created, and also promoted the SBC category as a whole with catchy slogans and educative materials.  All of the leading Citrix channel partners I knew in the late 1990s to mid-2000s were also Wyse partners.

My firm began selling Wyse WinTerms in 1995, but I’d never made the pilgrimage to the San Jose headquarters until 1998. Wyse was still quite small at that point, and I met with the CEO who was impressed that we had a business of 40 employees focused on implementing Citrix server-based computing. Shortly after the visit, we closed the largest Wyse deal in the world up until that point – 1,800 WinTerms for ABM Industries.

SBC and the associated thin-client business continued to grow over the next several years, but it wasn’t until VMware’s introduction of VDI in 2006 that the hosted desktop model began to go mainstream. IT decision-makers previously wary of implementing an enterprise desktop replacement with XenApp/TS were more willing to consider entending their virtual server success to the desktop.

Virtual desktops no longer required a device OS, and Pano Logic introduced the first zero-client device in 2007, followed by Wyse among other specialty manufacturers. The last few years have seen the giant Korean manufactures, Samsung and LG, come into the business with low-cost monitors integrated with PCoIP zero-clients. 

Dell’s acquisition of Wyse likely reflects the decline in PC sales along with its expectation playing a leading role in the rapidly growing virtual desktop industry despite its PC roots. My guess is that Cisco will eventually discontinue its OEM relationship with Wyse/Dell and begin manufacturing its own zero-client devices as part of VXI.

Wyse still leads the virtual desktop device market with sales of $375 million last year, followed closely by HP – although HP does not make its own zero-client units. Wyse’s remarkable 18-year leadership run is unlikely to be repeated by another small company. We’ll undoubtedly see the virtualization/cloud device future shaped primarily by giant manufactures such as Dell, Cisco, HP, Samsung and LG. While it may be a bit sad to witness the end of an era, the industry will grow more rapidly and broadly as a result.