Funded by Ellison, the firm will sell a $199 "non-PC" device called the NIC (for New Internet Computer) that has no hard drive, doesn't run Windows, and provides access to email and the Internet.
The first NIC will be targeted at educators, and will provide students with a more affordable alternative to the PC for accessing the Internet and email, said Gina Smith, a former technology journalist who was enlisted by Ellison late last year to be the new company's chief executive officer.
"We're not positioning this as a replacement for the PC," Smith said in an interview this morning. "Schools will still use PCs, but they don't have enough of them and the cost of maintaining them is very high."
Consumer version At the end of the year, "The NIC", as Smith likes to call her company, will offer a version of its Internet computer targeted at consumers. The consumer version will also be priced below $200, and serve primarily as a way to access email and the Internet.
If Ellison's plan to launch a network computer company sounds familiar, it should. Back in 1995, the Oracle chief was one of the original advocates of the NC, a device he predicted would displace PCs by offering a more affordable and efficient way for accessing the Internet.
Apple link Ellison made big noises about buying Apple, and many worried that he'd turn the Mac maker into an NC manufacturer. Instead, analysts now believe that his bid was a move to de-stabilize then Apple CEO Gil Amelio in favour of Larry's pal, Steve Jobs - who eventually did take control.
Ellison created Network Computer Inc (NCI), an Oracle subsidiary with a mission to evangelize the concept and provide software for the devices. The network computer never took off as Ellison and other advocates had predicted, and in 1999 NCI changed its name to Liberate Technologies, switched its focus to software for interactive television, and launched a successful IPO (initial public offering).
Think different The new company launched this week won't be a re-run of NCI, Smith said.
"Everything's different," she said.
The original NCs used a proprietary operating system and had to be used in conjunction with a server that hosted its software applications, she said. NICs, by contrast, run on the Linux operating system and come installed with a 56Kbps modem and Web browser from Netscape Communications, which is all they need for accessing the Web, Smith said.
"In many ways, they're more akin to the Internet appliances that you see being introduced" from companies like Compaq and Gateway 2000, she said.
The NIC's software programs are stored on a CD housed inside the computer, along with several browser plug-ins for running Macromedia's Shockwave, RealNetworks' RealAudio and other Internet downloads. The CD can be taken out and replaced by a network administrator, allowing NICC to upgrade the software in the machines as it sees fit.
For educators who want more than basic Web browsing and email, the CD also contains client software from Citrix Systems, which will allow the NIC to run server-based versions of some Windows applications, such as Microsoft Word, if they want to, Smith said.
The first 1,000 NICs are in the process of being installed at a school in Dallas at no charge as part of a philanthropic program at Oracle. Other educators in the US, Latin America and Europe can order the machines for purchase immediately, she said. The NICs are being manufactured by a Taiwanese firm which Smith declined to identify.
Are you experienced? Apart from starting a computer magazine many years ago, Smith said she's had no prior experience running a company. She said her work as a computer journalist has taught her what users want from a computer, and what they find most difficult to deal with.
She became acquainted with Ellison through conducting interviews with him over the course of several years. When Ellison introduced the first network computer concept in the mid 1990s, "I told him I thought it would make a hell of a consumer item," she remembered.
Ellison called Smith late last year and, telling her he had "an offer you can't refuse", offered her the job running NICC, Smith said today.
She accepted because "it's one of those opportunities that comes along once in a lifetime", she said. She added: "But then you think - I've been a journalist all my life - what will the press think, what will my mother think?"