Hitachi announced plans this week to gradually replace all of the PCs currently in use within the company's offices with special network terminals. Hitachi hopes that the network terminals will put a stop to data leakage. New legislation protecting consumer information is set to take effect in April 2005 and companies could be held liable for leakage if they do not take sufficient precautions. Hitachi's move also comes on the heels of a flurry of patent suits involving Japanese companies in recent months.         

 

Hitachi's plans call for the installation of 2,000 terminals at its ICT division offices by March 2005, with the addition of 8,000 terminals scheduled before the close of fiscal 2005. Thereafter, the terminals will be set up according to the PC replacement cycle. Hitachi aims to replace all of the approximate 300,000 PCs in its offices within no less than four years. Hitachi claims that the network terminals will provide 30% cost savings over a PC-based network. 

 

Network terminals can reduce the chance of data leakage because they do not have memory devices, such as hard-disk drives, and thus information cannot be stored on them. The operating system and software applications for the network terminals are all held in Hitachi's servers, so they are operable only when accessing the network. 

 

Employees will receive a device that will verify their authorization to use the terminals. It is impossible to switch on the terminals without such a device. Therefore, even if a terminal is stolen, sensitive information will not be lost. Moreover, every operation that an employee performs on the terminals can be traced, as it is recorded in the server. The terminals virtually eliminate the danger of information leaks, barring an incident of someone hacking into Hitachi's servers.  

 

Hitachi also intends to sell the terminals to other companies. The total cost to set up such a system is said to run about 2 billion yen (US$ 19 million; 1 USD = 104.72 JPY) for the installation of 10,000 terminals, as well as related upgrades for server and data communications infrastructures.