Microsoft is working on two Windows XP thin clients to provide a low-cost alternative for server-based systems.

The clients, with 64MB of RAM, 50MB hard disk and a Pentium processor, will cost less but offer the same management features and an array of hardware drivers. They are designed to run on low-end PCs that could then be used for simple tasks such as data entry or as a way to access server-based applications.

They are codenamed Eiger and Monch after two mountains in the Swiss Alps, according to Microsoft enthusiast Steven Bink, who publishes the Microsoft news website.

Eiger is the simplest offering with a remote connection client, Internet Explorer, local and network printing, Office viewers, Windows Server Update Services and support for Systems Management Server.

M"nch has all the Eiger features, plus support for Windows Mobile devices, Windows image acquisition, wireless networking, virtual private networking and advanced IP security, according to Bink.

Microsoft told select partners about its thin client plans in January, according to independent technology analyst Brian Madden: "The motivation for Microsoft is to get a true managed Windows platform on as many desktops as they can. Once they realised that this thin-client model is here to stay, they figured they might as well make an offering that can support SMS, WSUS, etcetera, to encourage as many people as possible to use these products."

Microsoft's thin clients will be competing with open-source products and potentially with partners such as Wyse and Neoware, which sell thin clients based on XP Embedded and Windows CE.