Dumb Terminals, Redux

Having covered the startup world since the days when fast dial-up Internet was considered pretty cutting edge, I’ve observed that visions of technological progress fall into two common categories:

There are ideas that do materialize, though much a bit later than initially expected. Smartphones with robust Internet access, video on demand, and fast home broadband come to mind.

Then there are ideas that either never come to fruition or take longer than anyone had expected. This category might include personal levitation devices, disposable clothes, and networked computers.

Ok, so the last is a bit of an exaggeration. It’s just that since at least the early 1990s, “thin clients’ – lower-powered workstations powered from a centralized network, were supposed take over the workplace. Rather than a computer on every desk, there’d be a lower-powered device, “dumber” than a PC and cheaper both to acquire and to operate.

Menlo Park, Calif.-based Pano Logic is betting that it’s an idea whose time has finally come. The company announced on Wednesday that it has secured $20 million in a Series C round of financing led by Mayfield Fund, with participation from prior investors Goldman Sachs and Foundation Capital. The money is to support expansion of what Pano calls its virtual desktop computing platform.

The system, which costs about $320 per desktop for a device and backend support, according to Pano, moves 100% of the processing power from the desktop to the data center. While that’s cheaper than a PC, the bulk of the savings is actually in operational costs – as IT staff will be able to monitor problems and put in fixes from a central network, rather than individual machines.

Pano calls its device a zero client, meaning it has no operating system. This is distinct from the better-known thin client which, according to Wikipedia, ran a full operating system for the purposes of connecting to other computers. Since thin clients didn’t really take off, I asked Parmeet Chaddha, Pano’s vice president of engineering, what’s different this time around.

“Two things are different. One is the quality of the network. The other is virtualization of the backend,” Chaddha says.

It’s not an all-encompassing solution. For one, the system works for only for desktops, not mobile users. But Chaddha says the offering is seeing demand from employers in a number of industries, including healthcare, manufacturing, education, and government. Currently, Pano, which did an initial release of its system in 2007, has more than 300 customers, with deployments ranging from fifty to several hundred units.