Software may be run on the local machine or on the server. Data generally resides on centralized file servers. Applications are downloaded from the network, and run on the client, by means of Java. From the user's standpoint, an NC is pretty much the same as a dumb terminal. However, NCs are more flexible, as they can connect to any server, with a variety of network protocols, whereas a terminal can connect only to its host network.
All applications execute on the server, and data is stored centrally as well.
This can be as simple as an online search engine, or as complex as a suite of enterprise applications. The server-based computing model, or online application model, is currently the talk of the town. In the computing world, the name of the game is doing more with less. The server-based model takes things one step further, and offers a number of advantages. In fact, no more installation or upgrades.