This article examines whether the client hardware, which is moving beyond vertical markets, as of 2005, will go mainstream. In 2004 the CIO of Sparkasse Haslach-Zell, a savings bank in Germany, replaced Windows NT desktops with Sun Ray thin clients. Using smartcards, the bank's consultants can log on to any workstation and access Microsoft Office and line-of-business applications. Since they first began to replace dumb terminals in the late '90s, thin clients have always been niche machines in industries like healthcare, banking, education, and city government. Some are ultrathin with no operating system at all. For Keith Courier, moving to thin clients is the law. His company, Mosaic, a nonprofit that manages care for the functionally disabled and housing for independent elders, is switching from Microsoft Windows personal computers to thin clients largely to comply with the Health Insurance Portability and Privacy Act, which requires healthcare firms to prevent unauthorized access to electronic medical records. Going thin greatly simplifies IT administration for not-for-profit organizations like Mosaic, where Federal funding cuts have sliced budgets razor thin. But enterprises cannot readily switch to thin clients. One obvious reason is that network-based computers can't match personal computers for performance. Moreover, thin clients may be cheaper than PCs, but they aren't necessarily cheap. The money IT departments save on desktops often translates into higher server costs, as well as higher salaries for network-savvy support staff. Gartner Group's Martin Reynolds sees thin clients as a natural choice for niche markets and companies moving operations offshore, where data security can be an especially thorny issue, but he doesn't see them replacing mainstream business desktop computers. Wyse CEO John Kish predicts thin clients will continue to enjoy strong growth in enterprises, but believes the real revolution will take place in the consumer market. INSET: The Skinny on Mobility.