o /A 'i 4
The following articles are reprinted solely as items of interest for the independent evaluation by members of
ATSU. The opinions, statements of fact, and conclusions expressed herein are not those of the Association.
By HARRIET KING
SEATTLE—In this West
Coast city, tShe future is here
—and if you don’t go crazy
hitting your touch tone
phone 36 times to pay a
$15.32 bill, it works.
This state’s largest mutual
savings bank has gone opera¬
tional with a system*—com¬
plete with talking computer
—that allows customers to
pay bills by phone. No
checks, no signatures, no 13
cent stamps, just punch away
at the phone and it’s done.
“We went into electronic
banking to compete for our
future livelihood,” says Bruce
Baker, senior vice president¬
marketing at Washington
Mutual Savings Bank. “Com¬
mercial banks have been
drawing customers from 1
thrift institutions so we real¬
ized we had to offer a pay¬
ment service as close to a
checking account as we
could, legally.”
Washington Mutual kicked
off its Passcard Plus account,
as it’s called, in 23 of its 33
statewide branches in May
and will put it in the remain¬
der this fall. About 1,600 con¬
sumers now pay $2 a month
for the convenience of paying
any of 1,600 merchants or
credit card companies by
phone. Fifteen bill transac¬
tions will, in postage stamp
savings, cover the. $2 and the
accounts also pay 5*4 per¬
cent interest.
Those with dial phones at
home or office simply call
the bank, talk to a real live
bank teller, give their secret
pass-code number, tell who
they want to pay and how
much.
But those with touch tone
button phones get to leap
into the world of “Logan’s
Run.”
First, the bill payer in
Seattle punches 464 4747 (7
digits) A soft female voice,
the cmoputer, says “Please
enter your account number.”
That calls for nine more
digits plus the 12th button
on the touch tone phone (the
#), the activator (you have
now punched 17 digits). The
computer repeats the number
by voice, then asks for your
secret pass code. That’s four
more digits and the # (or 22
digits total). The computer
repeats it, then asks aloud
for the payment code, a num¬
ber for the store to be paid.
That’s four more digits and
# or 27 numbers. There’s a.
voice repeat, of course, and
the request for the payment
amount; say $15.32 (the as¬
terisk covers the decimal
point) and adds six digits
running the total to 33). Sign
off is 02 plus (#) (three digits,
or 36 for the whole bill).
Of course, if the caller
catches a mistake, he hits the
asterisk, the computer can¬
cels the entry and asks for
the correct information. And
if the phoner doesn’t sign off
(02#) he can pay as many
The New York Times/DOui Wilson
With the proper code, Seattle bill payers can tap their cares away.
bills as he wants on one call.
The bank has a story about
one customer who /had one
$170 bill to pay, paid, but
then forgot to push the 02#
signoff. The computer then
asked for more bills and the
customer, thinking the com¬
puter hadn't heard him the
first time—or something—
paid his $170 bill again, and
again, and again and again—
five times in all. It took
a while, but with a bit of
human intervention, all was
straightened out.
One of the bank’s major
goals is to lure new custom¬
ers with Passcard Plus. “We
feel that the average age of
people who’ll use Passcard
Plus is 35. That’s crucial be¬
cause currently, industry sta¬
tistics show that the average
age of those who use thrift
institutions is 55. And let’s
face it, the elderly are literal¬
ly a vanishing breed so we
need to be able to provide
competitive advantages to
new, younger customers,”
says Mr. Baker.
‘‘Older customers seem
reluctant to change their life
style,” he says. ‘‘They’re used
to dealing with paper and
getting that cancelled check.
The young, however, are
eager to experiment. They
grew up with computers and
trust them.” He anticipates
that Passcard Plus users
would keep $1,500 in ac¬
counts ‘‘but we’re discover¬
ing,that the average custom¬
er keeps $2,500 in these ac¬
counts,” he says.
A less successful fore¬
runner of the pay-by-phone
service came in 1973 when
Seattle-First National Bank
introduced their In Touch pro¬
gram using touch tone
phones as in-the-home com¬
puters to conduct six bank¬
ing services. Sea-First lured
500 customers who paid
$6.50 a month. Only 100 mer¬
chants participated.
When the system failed a
few months later, Washing¬
ton Mutual and seven other
thrift institutions formed a
holding company and bought
51 percent of Telephone
Computing Services, designer
of the In Touch program.
Some of the partners, includ¬
ing Farmers & Mechanics
Savings Bank in Minneapolis,
have introduced programs al¬
ready, similar to Passcard
Plus.
‘‘We didn’t want to be the
first partner to introduce ths
system because Sea-First had
already failed with electronic
banking. Failing twice in
Seattle would have made
other ipairkets awfully wary,”
says Mi*, Baker.
But the new effort has been
very successful. We project¬
ed we’d have 14,000 consum¬
ers by the end of the first
year. But if we continue at
this pace, we may get up to
20,000 users.' Our customers
are selling us to their
friends,” he brags.
‘‘We determined that to be
successful, we needed a base
of 1,000 merchants* We now
expect to have over 2500 by
year end,” he says. It costs
merchants nothing to sub¬
scribe. They receive one
check for all of the business
transacted by the bank the
previous day, plus a comput¬
er print out and tapes that
can be run through the mer¬
chants* computers for auto¬
matic posting and updating.
‘‘We’ll be 18 months to two
years into the program be¬
fore we break even. We
didn’t get into it to be profit
making, yet we can’t afford
to lose money, either.” And
the bank hopes for a 3 per¬
cent profit eventually.
The biggest program was
signing well known mer¬
chants. ‘‘We went for a peri*
od of weeks withqut some
major payees—like the Bon
Marche which we just added
last week. The Bon (Allied
Stores Corporation’s regional
chain of prestige department
stores) waited to see if we’d
have enough volume to make .
it worth their while. They
needed to be convinced—and
were.
‘‘Another problem 1 is that
major City of Seattle utilities
are undergoing complete
changeovers in billing proce¬
dures so We can’t handle
those accounts until late
summer.” The only major re¬
tailer he doesn’t yet claim is
Frederick & Nelson, a divi¬
sion of the Marshall Field &
Company. “fhejrre in favor
of it, but are waiting for the
OK from Chicago,” says Mr.
Baker.
There are a few technical
problems, but ‘‘whenever
you’re burning in hardware,
you have pieces that fail
within the first two to: three
months and that eventually
will work forever. We expect
to be oVer this stage soon.
The software is becoming
stable,” says Wayne Wallace,
assistant vice president for
computer operations.
Washington Mutual says it
spent a half million dollars
to get the program where, it
is” and we:re within our
budget The majority of costs
are for hardware and pp&r
gramming. But costs
Introducing
two revolutionary
new devices for
payingyour bOls,
The Washington Mutual Savings Bank in Seattle
is advertising its computer service with photo¬
graphs of the two instruments needed to pay
bills. Bills may also be paid by calling a teller
who will make the necessary entry in computer.
deter us—-the bank was seji?
ous about the potential -'m
electronic banking,” says
Baker.
He notes that the figure
‘‘doesn’t show all the costs,
however.” He figures that
Sea-first spent a half-million
dollars on In Touch and
‘‘Farmers & Mechanics, too,
spent a fair amount.”
.Now the bank is getting
ready to market the service.
‘‘Later this year, we might
begin discussions with other
bankers and savings and loan
officers who want to buy the
system from us,” says Mr.
Baker. “There’s money to be
made there, yet if we dd it*
we’ll lose some of our market
advantage of having the . sys¬
tem exclusively. It’s *a deli¬
cate balance.”
Merchants seem to * like
Passcard Plus. “We’re
pleased and have no major
problems. But we see the
possibility of a minor one
ahead,” says Charles Robi¬
nette, credit manager of the
Puget Sound Power & Light
Company. Utility customers
move around and each hous¬
ing unit has its own, perma¬
nent account number. We’re
afraid customers who move
may wind up paying into the
wrong account. But we’ll
work it put.. The program
offers us a lot. We get one
guaranteed check: that cuts
down our bad check losses.”
“It’s an easy system. The
accounting is very accurate.
Because they give us comput¬
er tapes, posting takes no
time at all,” says John Walga-
mott, assistant credit man¬
ager at Nordstrom,, a Seattle
area department store chain.
Mr. Walgamott says he
personally intends to open a
Passbook Plus account. “I’ve
been watching one of my
friends who makes a ?ame
of timing his bill payments
so he can get the maximum
interest possible. I’m ready
to do the same .for toy own
bill; I’ll make every change
in my personal accounting
system I can to maximize
every penny. It’s the way to
run. any good business;”
Copyright 1976 by The New York Times Company. Reprinted by permission
1/S Sanaa Replates 370 $
Other Users Convince Firm to Get 470
By Toni Wiseman
Of the CW Staff
BETHESDA, Md. — An in-depth survey
of all current installations convinced man¬
agement at Scientific Time Sharing Corp.
that an Amdahl Corp. machine was the
way to go, even without any benchmark¬
ing on the firm’s part.
“Our personnel visited every Amdahl
installation in the U.S. and spoke with a
Canadian site to confirm with other users
what improvements they are seeing,” ac¬
cording to Daniel Dyer, president of the
time-sharing firm.
“Our findings confirmed what Amdahl
told us we could expect,” Dyer said. “In
fact, some of the universities which were
running APL reported they were some¬
times getting slightly better performances
with APL than they were with other
work.”
Consequently, Scientific Time Sharing
installed a 4M-byte Amdahl 470V/6, re¬
placing two IBM 370/155s which had
been handling its APL services.
Dyer would not estimate the maximum
number of users the system can handle;
that figure depends largely on the nature
of the work the customers are running, he
said, and “the emphasis should be on
balancing response time with the number
of users to get as many users as possible
at a response time that’s acceptable.”
He did, however, estimate the 470 is
about eight times faster than a 155.
As a result, the service firm has adjusted
its user pricing by a factor of 7.43 to 1,
relative to what it was charging for the
155, he said.
Scientific Time Sharing experienced no
problems in installation or conversion, he
said. The order was placed on a Monday
and the machine was running the follow¬
ing Sunday, Dyer said.
Two Software Changes
Only two software changes were neces¬
sary. First, the firm wanted to go to a
higher resolution timer because the 470
was so much faster, so software was
written to support *hat change.
Secondly, it moved up from OS Release
21.7 to Release 21.8 to use some correc¬
tions made in multiple console support,
Dyer indicated.
Scientific Time Sharing is experiencing
better than 99% uptime, Dyer said, and
has experienced only one hard failure to
date. “And Amdahl had it fixed within
half an hour,” he added.
Two engineering changes have been nec¬
essary, he noted, “but in both cases the
problems were very minor and Amdahl
responded very promptly.”
One problem concerns the CPU timer’s
failure to turn off when the machine is in
log-out mode, according to Robert Smith,
director of systems.
“This means we end up with some
excess CPU time when it’s going through
machine check processing. But it doesn’t
happen very often so it isn’t a serious
problem,” Smith said.
Amdahl has delivered a software en¬
hancement, to reduce the frequency of
the problem and is working on a hard¬
ware enhancement which should be ready
in a few weeks, he added, noting that
Amdahl had indicated this feature would
become standard on all 470s.
Reprinted by permission. Computer World, July 26, 1976, Copyright 1976.
D P services industry
protests 'reform' bill
MONTVALE, NJ — Computer industry
efforts to defeat the Consumer Communi¬
cations Reform Act of 1976 increased
this month as the Association of Data
Processing Service Organizations (Adapso)
began contacting members of Congress to
enlist their support. Adapso represents
software, data center, facility management
and time-sharing companies.
“This legislation, if enacted, would
pose adverse consequences for users of re¬
mote access data processing and time¬
sharing services,” says Jerome L. Dreyer,
Adapso executive vice president.
Passage would have four major results,
he says, listing them as (1) elimination of
competition between telephone common
carriers, (2) regulatory control over com¬
puter, station and terminal equipment,
(3) provision by statute that the Federal
Communications Commission must accept
AT&T’s incremental cost methodology as
appropriate in all cases, and (4) antitrust
immunity for acquisitions by telephone
companies.
Adapso maintains the legislation would
lead to increased computer systems costs
resulting from the need to reconfigure ex i
is ting computer networks. These costs,
Dreyer says, would be passed along to users
of the services.
Relegation of jurisdiction over station
and terminal equipment to state regulatory
commissions would eliminate any possibil¬
ity of uniform nationwide technical stan¬
dards for multi-state networks, he adds.
At the minimum, the viability of exist¬
ing multi-state networks is threatened, he
says, while at the worst, the continued
existence of such networks is endangered.
And returning effective control of the
domestic telecommunications industry
to the telephone company would reduce
the incentive for technological innovation,
he adds.
Adapso doesn’t dispute the position
that every American should have basic tele¬
phone service at reasonable rates, but it
does dispute placing regulation in state
hands, maintaining that such fragmented
control would result in higher operating
costs.
Reprinted by permission.
Minicomputer News,
July 29, 1976,
Copyright 1976.
Derision Made on Three Criteria
NCSS Puts Amdahl 470 on
IBM 370-Based Network
By Toni Wiseman
Of the CW Staff
STAMFORD, Conn. — There were three
primary criteria which proved positive
and encouraged National CSS, Inc.
(NCSS) to add an Amdahl Corp. 470V/6
to its network - price/performance, diag¬
nostic abilities and ease of installation.
At the time the decision was made to
acquire a new computer, NCSS East
Coast data center had an IBM 370/158
and a 370/168, and it was running out of
capacity faster than expected because of
an extremely good business year, accord¬
ing to Michael S. Field, vice-president of
data systems for NCSS.
Its options were to add another
370/158 or to upgrade the 370/158 it
had to either a 370/168 or an Amdahl
system, he said.
“We’d been looking at Amdahl for
about 12 months. We’d done some bench¬
marks in its Sunnyvale center and had
some conversations with [the University
of] Michigan and spoken to others about
their experience, primarily Mass. Mutual
Life Insurance Co.,” Field said.
“As a result of our findings it seemed
like [the acquisition of the Amdahl ma¬
chine] was a reasonable business decision
for us to make in terms of the kinds of
improvement we expected to see within
the 1.5 to 1.6 range, or 50% to 60% more
throughput,” he said.
NCSS has its own operating system,
VP/CSS,-which is of the same parentage
as VM, Field said. It consists of two
parts — the virtual control program or VP
and its conversational software system or
CSS.
VP is a Virtual machine’ control pro¬
gram that shares the resources of the
hardware system among the tasks running
on the system, which may involve time¬
sharing information, retrieval, batch proc¬
essing, and other operating systems or
remote batch.
Ran Benchmarks
At Sunnyvale, NCSS ran benchmarks
where it “fired up more and more users
to see how the system handled itself and
measured its throughput,” Field said.
Since the only machine available for
tests was a 2M-byte system, it was forced
to run a number of tests, extrapolate the
results and project what the results would
be with a full configuration.
“We’re looking at a 6M-byte system
when fully configured,” Field said.
“That’s what we feel is a good balance for
our operating system, between the mem¬
ory size and the CPU power.”
NCSS can run up to 250 users simul¬
taneously on its 370/168. Based on the
benchmarks, it feels the Amdahl machine
should accommodate “50% as many as
the 168, conservatively in the 350-plus
area,” he said.
Remarking on the three primary cri¬
teria which led to the selection of the
470V/6, Field said NCSS expected to
achieve somewhere approaching a 2:1 ratio
in terms of price/performance over the
370/168, where the cost of the Amdahl
system was approximately 20% less than
the 168, and the projected performance
was 60% more.
“Even if we were being optimistic and
2:1 is better than we’re going to get, even
approaching that number is attractive to
us,” he said.
The 470V/6 costs in excess of $4.25
million, of which approximately 75% will
be on a long-term debt basis and the
balance paid from general funds.
Field also praised Amdahl’s diagnostic
abilities which, he said, were necessary
for their time-sharing applications.
In addition, the Amdahl machine was
slated for installation in a new facility.
“It would have been quite expensive in
terms of fitting it up for cool water for
the 168,” he said, “but the Amdahl is air
cooled and doesn’t need it.”
“It’s also a more easily maneuverable
and installable machine. The thing was
installed in 12 hours compared with one
to two weeks for a 168,” he said.
“We didn’t speak to anyone who had
any reservations about their [Amdahl]
system,” Field said.
“I think Michigan did have a couple of
problems right at the beginning, a channel
problem which bugged them for a while.
But that was the only negative comment
we heard, and people at Michigan spoke
about it in a positive way because they
were impressed by the way Amdahl
handled it,” he said.
NCSS took the 470V/6 for an accep¬
tance test in May and “submitted it to as
many different loads and as heavy a load
as we possibly could to exercise it both
from the performance and reliability
standpoints, just to see if it met our
expectations,” Field said.
The results were so satisfactory NCSS
moved up the date for putting its cus¬
tomers on the system from June 15 to
June 1.
“For the first two weeks we-didn’t see
one hardware hit during prime time,
which was remarkable for a new
machine,” Field said, “and since that
time we’ve had maybe one or two hits,
but nothing dramatic.”
NCSS is not worried about Amdahl’s
viability as a hardware manufacturer, al¬
though it was an important consideration
at one time, Field said.
In addition, NCSS, as well as others,
have a backup agreement with the Fujitsu
organization, in the event Amdahl itself
could not provide maintenance services,
he noted.
Reprinted by permission. Computer World, July 5, 1976, Copyright 1976
For small businesses
Time-sharing service
offers 'flat rate' DP
WELLESLEY, MA - “Flat rate” data
processing is one time-sharing service’s
answer to the inroads being made into its
business by small in-house systems. For
a packaged price of $800/month, Keydata
will provide time-sharing services as a “lov
cost, risk free alternative to the minicom¬
puter.”
Designed to appeal to small distributior
and manufacturing companies in the
$750,000 to $5 million sales range, the
System 800 service provides billing, inven¬
tory control, accounts receivable and
sales analysis plus monthly and quarter¬
ly management reports.
“We believe System 800 offers small
business organizations a revolutionary
new way to computerize their operations
at minimum cost and with guaranteed re¬
sults,” says L. Edwin Donegan, president
of Keydata, the oldest commercial time¬
sharing service.
Small businesses with little, or no,
computer experience “are being inundated
by sales presentations from people try¬
ing to convince them to install in-house
minicomputer systems,” Donegan says.
But “the businessmen who rim these com¬
panies generally lack the experience to
undertake the risks involved in hardware
selection, software creation, and the day-
to-day operation of even the smallest mini¬
computer system.
“Yet these risks are more significant
to them than to larger companies, since
computer failures can literally put a small
company out of business,” Donegan adds.
Keydata’s new service is based on the
KRU (Kevdata Resource Unit), a com¬
bination of four resource factors, includ¬
ing the number of customer invoices, the
average number of invoice lines, the num¬
ber of customer records, and the number
of item records. For $800, a customer is
allowed up to 175,000 KRUs/month.
Companies whose requirements exceed
this amount can use the service by paying
$4.75/month for each 1,000 additional
KRUs.
Service features include the installa¬
tion and maintenance of a terminal in the
customer’s office, computer access 14
hours a day during the week and 10 hours
on Saturday, six monthly management
reports and two quarterly reports. An ini¬
tial charge of $2^500 covers training of
customer personnel and conversion of the
customer’s data to the Keydata system.
“In addition to being less costly than
any minicomputer system currently avail¬
able, the Keydata System 800 also offers
more sophisticated management informa¬
tion than is generally available with even
the larger minisystems,” Donegan says.
Keydata’s office is at 20 William St., 02181
Cassette drive added to portable terminal
OAKLAND, CA - Micon Industries has
added a cassette drive to its Pocketerm
portable terminal so that the battery-
powered unit can collect up to 40,000
characters off-line for later transmission
via its built-in acoustic coupler. Called
Cassetterm, the new terminal also includes
an alphanumeric keyboard and a 32-char¬
acter LED display, all packaged in a four-
pound unit not much bigger than a tele¬
phone.
After data is collected on the small
cassette, the user can either transmit the
data via telephone to a central computer
at 300 baud or mail the cassette to the
central site. “Information can be gathered
anywhere because the Cassetterm is bat-
Portable Cassetterm
tery powered, and it can be immediately
sight verified on the display," says Wil¬
liam E. Northfield, Micon president.
Cassetterm is priced at SI ,495, with
quantity discounts available, from Micon
Industries, 252 Oak St., 94607.
Reprinted by permission. Minicomputer News, July 15, 1976, Copyright 1976
TheTrouble With Minis
by Philip H. Dorn, Contributing Editor
The trouble with minicomputers is
that; they refuse to stay mini, they
grow just the way any computer
grows. What begins as a very small,
special purpose system somehow is
transformed across time into a me¬
dium sized, general purpose system.
After the prime motivating applica¬
tion is completed, somebody gets a
bright idea to add more applications
and the charge toward upgrading be¬
gins. A few cases in point:
Case 1
A major university once bought a
minicomputer to do some very spe¬
cial research in structural analysis. A
16K system with no peripherals ex¬
cept a graphics console, it was oper¬
ated by the professor for 2 to 3 hours
a day. Five years pass. The profes¬
sor’s students are imaginative. The
machine now has 32K of memory, a
things started again.
Case 2
A financial institution carefully
specified a mini to be used for data
collection. The system was small,
0.5mb of disc and 32K of memory.
Two years later, the system had
grown to 128K of memory, 5m b of
disc, a larger model processor and a
300 1pm printer. Why? Because
someone thought that as long as the
data was collected, it ought to be
edited. And, since the data was now
clean, why not do a little processing
to save time on the big system? The
net result is that the system now op¬
erates almost around the clock and
serves as a mini data center with op¬
erators and support personnel.
Case3
Another financial institution had
wide variety of applications, and ap¬
parently have a long and useful life.
It is a great testimonial to the hard¬
ware designers and software devel¬
opers,,
But we are compelled to wonder
about the management in these or¬
ganizations. Have they lost control of
the computing operation? What is the
bottom line effect of the central facil¬
ity having to support a multitude of
smaller installations and bail them out
when they are in trouble? Are these
new applications that just appear be¬
ing documented and supported the
way that they would have been if
centrally implemented? What is the
effect on local management when
they have to run a computing center
in addition to performing the jobs for
which they were originally hired?
There are no fixed answers to any
of these questions; doubtless the fi-
card reader, printer, tapes, and even a
small disc. The applications now in¬
clude literature search, project man¬
agement, and even student sched¬
uling. The departmental secretary
can’t run the system anymore; it is
too complicated. Whenever it crash¬
es, a professional from the computer
center has to amble across campus,
diagnose the difficulties, and get
their 4K, tty-oriented mini grow in
seven years to 32K with card reader,
disc, and other peripherals. Formerly
used for statistical analysis, it now is
a real-time system. Acquired for one
application, it now supports many.
Now there is nothing wrong with
any of this; it proves that mini¬
computers are flexible, are compar¬
atively easy to program, support a
nancial details must be developed for
each unique case. But the message
should be clear. If you are going to
install a mini, you had better know
what problem you are trying to solve
and how to bound the installation. If
you ignore the mini after it is in¬
stalled, it will grow and a whole new
set of managerial problems will ap¬
pear. #
Reprinted with permission of Datamation, Copyright 1976
by Technical Publishing Company, Greenwich CT 06830.
