NCD First to Break $700 Enterprise NC Barrier; Leverages IBM Shipments and Indirect Sales Channels

Business Wire, March 3, 1997

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--March 3, 1997--Network Computing Devices, Inc. (NASDAQ:NCDI) today announced that it is taking advantage of increasing business and decreasing costs to lower the list price of its entire line of Network Computers (NCs) by 25-50%.

Effective immediately, retail prices for the company's line of Universal Network Computers now range from $695 for the company's Explora entry-level model up through $2,895 for its HMXpro24, the industry's only 24-bit true color multimedia NC (monitors sold separately).

The company explained that these new prices are the result of new economies of scale obtained from its shipments to IBM, increased volume from the growth of indirect sales channels, and the adoption of new low-discount "value-pricing" for NCs.

With this action, NCD expects to both increase its lead in the network computer market and continue to build on the strong financial base that it has established.

"NCD's mission is to be the dominant supplier of network computer hardware and software. Furthermore, our resellers will be the dominant suppliers of value-added services required for total corporate solutions," said Robert G. Gilbertson, NCD's President and CEO.

"Together, we are taking technology that was proven in the engineering world and bringing it to the mainstream corporate desktop," he added.

New Volume Shipments Reduce Manufacturing Costs

NCD's significant cost-savings come in part through its relationship with IBM Corporation. As the manufacturer of the IBM Network Station, NCD is able to leverage volume purchases of components across both IBM and NCD products.

These cost savings are being passed on to customers, creating the industry's first sub-$700 enterprise desktop product that is capable of simultaneously displaying Windows, UNIX, Java, legacy, and audio applications.

New Indirect Sales Channels Reduce Distribution Costs

Through a new strategic emphasis on indirect sales partners, the company is further expanding its sales volume without raising operating expenses. NCD is just completing a very successful pilot of a major recruiting program for value-added resellers (VARs). The program, which will be publicly unveiled on March 24th, will significantly increase the number of companies that are reselling NCD's network computers, WinCenter multi-user Windows NT application server software, and PC-Xware network computing software for desktop PCs.

NCD expects to double its current North American reseller business from 20% of revenues to 40% by the end of 1997. To drive this growth, the company hired Preston E. Lawhorne last December as Director of US Channel Sales.

Lawhorne, an expert in building high-quality channel businesses for technology companies, was formerly the VP of Channel Sales and Development for Memorex Telex Corp.

"NCs in the 90s will do for resellers what networks did for them in the 80s -- create a need for specialized expertise across horizontal markets," explained Lawhorne.

He further added that "our industry-leading NC and Windows products, together with our new aggressive pricing, will provide our VARs with significant revenue opportunities and our customers with local, skilled professionals to assist in integrating network computers into today's complex corporate networks."

New "Value-Pricing" Reduces Need for Discounting

With this new pricing, NCD is bringing the familiar desktop pricing model to network computers. Unlike X terminals, which followed the UNIX model of higher list prices offset by steep discounts, NCs are taking a "value-pricing" approach in which lower list prices eliminate the need for heavy discounting.

As a result, the "street" price of a typical NC purchase is the same as, or very close to, the product's list price, freeing customers from having to worry about whether or not they received the best possible value.

This combination of actual cost and list discount reductions has allowed such drastic (25-50%) reductions in list prices for all of NCD's Universal Network Computers.

The company's Explora and HMX families of enterprise NCs provide simultaneous access to many types of applications at once, plus ease of management and low cost of ownership. The Explora is optimized for delivering Windows, legacy, and forms-oriented Java applications, while the HMX is optimized for delivering multimedia, Java, and UNIX applications.

All of NCD's network computers run NCDware, the company's high performance network computer software which provides optimized drivers and simultaneous connectivity support for Windows, UNIX, Java, legacy, and multimedia applications. It has been installed on over 340,000 desktops worldwide. In addition, NCDware provides high performance access to the company's WinCenter multi-user Windows NT application server software, available separately.

For More Information

Founded in 1988, Network Computing Devices, Inc. is a leader in network computing. It provides network computer hardware and software that delivers simultaneous, high-performance, easy-to-manage access to any application on an enterprise network from any desktop.