COMPUTER MAKERS LINKING UP : MICROSOFT, INTEL PLAN `NETWORK COMPUTER'.

Byline: Hiawatha Bray The Boston Globe

First came the battle of the browsers. Now comes the war over network computers.

Not content with fighting to dominate the Internet, several of America's top computer companies are opening a second front this week to try to take control of millions of desktop computers used by businesses around the world.

On Monday, Microsoft Corp. and Intel Corp. announced a plan to introduce a new kind of ``network computer,'' a cheaper, simpler version of today's personal computers. Intel and Microsoft promised that the new NetPC design would be cheaper to buy and to maintain.

In addition, Microsoft said it would revise its Windows NT and Windows 95 operating systems to make it easier and less costly to maintain networks of desktop machines. Microsoft and Intel cited support for their initiative from a number of major computer firms, including Digital Equipment Corp., Hewlett-Packard Co., Dell Computer, Gateway 2000 and Packard Bell.

The Microsoft-Intel announcement seems designed to counter a similar move expected to be announced today by Sun Microsystems Computer Corp. In New York, Sun will demonstrate a machine based on processor chips designed especially to use Sun's Java programming language.

If the Sun NC's gain favor, it could cut into the sales of Microsoft's Windows operating systems and software, and also harm sales of computers that use Intel's Pentium microprocessor chips. Sun plans to reveal a list of major companies that plan to use its NCs. Among them are the railroad company CSX Corp. and the flower-delivery network FTD.

Microsoft and Intel said they would finalize the basic design of their NetPC machines by the end of the year. HP expects to offer a NetPC device sometime in 1997.

At first glance, the NetPC seems little different from from a traditional desktop machine. It will include a Pentium processor with a clock speed of at least 100 megahertz; 16 megabytes of memory, and the ability to play audio files. But its hard drive will be used only for storing data files; any software used by the computer will be stored on a remote server instead. The NetPCs won't have expansion slots for plugging in extra features like an internal modem, and its case can be locked to prevent the theft of the computer's internal memory chips.

In addition, Microsoft is launching its Zero Administration Initiative for Windows, a plan to make it easier to update and maintain software on networks of computers using Windows 95 and Windows NT. Under zero administration, network managers will be able to limit the ability of a computer user to alter files or install new software of his own.

When new software is added to the network, each desktop machine will download it automatically. That way, all machines will have the latest versions of programs, without the need for network managers to check each machine.

The goal, said Richard Tong, Microsoft vice president of marketing, is to reduce the labor costs of maintaining a desktop computer. ``We've been hearing for quite a long time that we need to reduce the cost of computing,'' Tong said.

Still, until recently, neither Microsoft nor Intel expressed any interest in making inexpensive NCs. But corporate computer users have begun to resist increases in the cost of computing.

``There is an assumption, I think, that the industry holds, that they can just keep increasing the features and functions of software, so essentially to run the software you have to buy a new computer every two years,'' said Nina Lytton, president of Open Systems Advisors, a Boston computer consulting firm. ``I don't think that is justifiable.''

Sun Microsystems and the database software maker Oracle Corp. tapped that discontent when they promised to build cheaper, simpler desktop machines that didn't rely on Microsoft programs. Oracle said Monday that it would bundle software from Netscape Communications Corp. with its NC, which is to be unveiled next week. Oracle says it plans to begin selling NCs next year. Meanwhile, IBM Corp. joined the trend, launching its own NC line last month.

Sun, Oracle and IBM have said their NCs will cost significantly less than traditional PCs. The cheapest IBM NC costs $700. But Pat Gelsinger, vice president and general manager of Intel's Internet group, said the Intel NetPC would cost only slightly less than today's Intel-based machines. The real savings, Gelsinger said, would come from lower management costs.

Despite the clamor for cheaper computing, it's unclear how large the market for NCs will be. Lytton thinks the devices will catch on in many offices, but will not supplant the traditional personal computer. ``No technology comes in and outright replaces something else,'' Lytton said, ``because the one that's under attack responds with improvements.''

Robert Womack, director of technology at Hale & Dorr, a major Boston law firm, has made no commitments to adopt NCs but he plans to evaluate the technology. ``We at least kick the tires of things that we think might help us practice more efficiently,'' Womack said.

But Michael Prince, chief information officer at Burlington Coat Factory in Burlington, N.J., said he's eager to start deploying network computers at his company, which has 17,000 employees and about 250 stores nationwide.

``We think that we can more effectively manage the NCs than we can PC-based workstations, that the cost of management will be lower, and they promise to provide a wide range of functionality that will be satisfactory for the people we'll be giving them to,'' said Prince.