nComputing Reaches Out To Education VARs

High-tech entrepreneur Stephen Dukker, founder of eMachines, is avidly courting VARs and educational resellers for his latest venture, nComputing, which makes low-cost multiuser access terminals.

>> THE COMPANY: NComputing >>' LOCATION: Redwood City, Calif. >> FOCUS: Multiuser access terminals for education market

His pitch: nComputing's devices will help partners break into untapped markets in education and developing countries by stretching limited IT budgets. The technology, which is priced around $200 per unit, comes in two basic configurations: the X Series, which turns a single host PC into a device capable of supporting three to four additional users, and the L Series, an Ethernet-connected device that supports even more multiple users.

"Our technology, essentially as it is right now today at full retail price, basically allows our customer to get anywhere from high three- to four-to-one [users] on the same expenditure dollar seats or access for multiple people vs. the old way," Dukker said.

What's in it for VARs?

For starters, more margin. On each $200 product, resellers stand to clear $50 to $60 in margin, compared with the roughly $40 to $50 they can expect on a PC priced at $400, Dukker said.

"What does your customer do with the $200 that they saved?" he continued. "Well, if it's a school, schools are not really looking to save money, they're looking to get more student seats of technology for the money they've been budgeted. So they can spend it on 20 student seats using conventional technology or they can spend it on 80 or 90 seats using our technology. So the answer to the question of what does the school do with the $200 [they saved] is they buy a second one. So now the VAR has made $120. This is where we like to say that our business kind of lives at the intersection of commercial opportunity and social responsibility."

Jeffrey Main, CEO of Questeq, a 21-year-old education VAR in Coraopolis, Pa., that signed on with nComputing last month, said he already has captured the attention of several tough-to-please school districts. "This is one of those technologies that we think truly has the opportunity to lower the cost of acquisitions," he said.

Questeq actually had evaluated four other offerings similar to the nComputing technology but went with nComputing for several reasons, including the design of the products and the company's backing. "The technology is flat-out better, the architecture has been done from the ground up properly. They have legitimate funding and a legitimate vision for the market," Main said.

Approximately 70 percent of nComputing's sales come from emerging markets, especially China and Brazil, where the Redwood City, Calif., company is selling approximately 5,000 seats per month. The rest of its activity is from educational accounts in America and Europe.

Dukker said nComputing is recruiting educational VARs to support the viral nature of the technology's adoption. In North Carolina alone, school districts have installed more than 10,000 seats—without the help of a central contract.

HOT Factor
	• VARs can clear $50 to $60 in margin on each $200 product. • About 70 percent of sales come from emerging markets. • Technology works with Windows and nine Linux derivatives.