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0/F '77

The following articles are reprinted solely as items of interest for the independent evaluation by members of
A TSU. The opinions, statements of fact, and conclusions expressed herein are not those of the Association.

Time-Sharing Seen Losing
Ground as Service Choice

NEW YORK — Total time-sharing in¬
dustry revenues were approximately $640
million in 1975, a figure which should reach
$1 billion in 1984, according to Frost &
Sullivan, a market research firm.

The New York firm predicted that while
the DP sector as a whole will grow at about
18% a year through 1984, resulting in ex¬
penditures that year of some $87 billion,
time-sharing’s share of the revenues will de¬
cline.

“Vendor profitability will [also] decline,
falling from a current industry average of
about 11.5% to no more than 5.3% by
1984,’’ the report said.

“The declining importance of time¬
sharing is only one facet of a profound and
continuing shift in the mix of services of¬
fered by remote computing services (RCS)
vendors,” the report said.

“Due to growing user sophistication,
saturation of traditionally lucrative
customer segments, and more direct com¬
petition with the autotransaction industry
as well as the products of the burgeoning
minicomputer industry, the RCS vendor
must strive to remain viable in a buyer’s
market. His possible countermeasures are
both limited and expensive,” the report
stated.

The firm said it based its predictions on
intensive interviews with 50 users located in
15 major metropolitan areas. The 50 users
had aggregate 1975 RCS expenditures of
about $40 million.

The industry time-sharing (T/S) trend is
toward constant availability, the report
said. The T/S services of the ten leading
vendors are available to industry users for
an average of slightly over 115 of the 168
hours in a seven-day week; all leading ven¬
dors operate on Saturdays; and only two
leaders shut down on Sundays and

holidays.

Most of the industry leaders are full
service vendors, offering T/S-related
services such as remote job entry (RJE), ex¬
tensive application libraries, training and
technical support, according to Frost &
Sullivan.

Few Offer Leasing Services

While only a few do not engage in con¬
tract programming, facilities management,
and/or consulting, only a few offer equip¬
ment leasing services.

“Despite professed plans to the contrary,
market factors will impel those T/S vendors
inactive in certain of those related service
areas to enter them,” the report predicted.

Current vendor-published prices vary
widely, Frost & Sullivan found, with con¬
nect charges varying from $9/hr to $22/hr;
I/O charges from zero to $ 1.65/thousand
characters transferred; and mass storage
from 17 cents to 62 cents/thousand charac¬
ters per month.

The T/S leaders represent every major
hardware vendor: Honeywell, Control
Data, Xerox and Digital Equipment Corp.,
but over a third of all installations are IBM.
Most installations are multivendor,
however, the interviewers found, with
mainframe brands/vendor approaching
two.

“Replacement of front-end processors is
proceeding rapidly, occasioned by the
growing prevalence of dual-mode (T/S and
RJE) systems and broader support of
higher line speeds,” the study stated.

As to operating systems, “the gradually
emerging current generation is all vendor-
custom, dual-mode and compatible with all
possible line speeds,” the report said.

“Thanks primarily to the number of IBM
mainframes and the available TSO, neither
dual-mode nor custom systems incidence is
likely to reach 100%, but will approach that
figure,” it said.

Citibank Plans to Offer Time-Sharing Services to Firms, Using Own Facility

By KATHRYN LIEBTAG

NEW YORK.—The $45.9 billion-
deposit Citibank NA Wednesday an-
nonuced plans to enter a new computer
service market beginning Jan. 1, that of
offering time-sharing services to large
corporations in the metropolitan New
York-New Jersey region. It is believed
to be one of the first banks in the country
to offer such services through its own
in-house time-sharing facility.

The services—which could include a
company's bookkeeping, billing, payroll,
inventory and other functions—will be
handled through Citibank’s Interactive
Computer Center, a time-sharing depart¬
ment established at the bank’s Park Av¬
enue headquarters about eight years
ago.

Initially, the bank will offer the facili¬
ty's services to business firms, but ac¬
cording to Seymour Brooks, the center’s
applications support manager, plans call
for expanding the service to corre¬
spondents and developing an interna¬
tional computer network, a system
which Citibank's international banking
group is anticipating for- a direct in-

house link with Hong Kong and London
money center offices.

Mr. Brooks said the bank is looking to
market the time-sharing service to
“large business customers who are con¬
cerned about the increasing high cost"
of such services."

Citibank’s initial thrust to market the
services will emphasize cost-effective¬
ness—'the bank claims the cost is “50%
of the going rate," Mr. Brooks said—in
advertising being prepared for the New
York Times and such computer maga¬

zines as Datamation, Computerworld
and Computer Decision. The ads are
scheduled to run early next year, he said.

The availability of a newly installed
DECsystem-20 computer, manufactured
by the Digital Equipment Corp., was a
major factor in deciding to make the
time-sharing services available on a
commercial basis, according to the bank.
The DECsystem-20 “will be the only ma¬
chine of its type in the New York City
area available for general purpose time¬
sharing service," Citibank claims.

Mr. Brooks, outlining the rate struc¬
ture, said the bank will charge $6.50 per
hour for prime-time usage — 8 a.m. to
6 p.m. Monday through Friday, New
York time—and $2.50 per hour for non-
prime time. Additional charges involute
disk storage costs, and the use of mag¬
netic tape units, line printers, etc. The
minimum monthly charge is $250. Prices
do not include any Federal, state or local
taxes, according to the Citibanker.

The Citibank facility will be able to
handle J2 separate lines into its com¬
puter for the time-sharing users. Mr.
Brooks said. The bank is “holding back,"
he said, on the capacity for the moment,
he said, to explore the new computer's
capabilities and limitations.

The bank’s other major-time-shared
offering is a package of computer pro¬
grams, for noncomputer-oriented finan¬
cial managers, announced earlier this
year under the name “International
Command." Rascally, the system is used
in planning and analyzing cash flow
needs, dividend policies, divisional fore¬
casts, and financial statements.

Home Input
The Computer Moves
From the Corporation
To Your Living Room

If You Don’t Have One Yet,
Up to 100,000 People Do;
Clubs, Magazines & Music

James and Nancy Like Roy

By David Gum pert

Staff Reporter of The Wall Street Journal

You plunk down anywhere from $200 to
$3,000, bring it home, put it together, plug it
in and, presto—you've got a computer sys¬
tem at your beck and call.

The era of the home computer, it seems,
is upon us. Thanks to smaller and cheaper
computers, just plain people are entering
what used to be the exclusive, expensive and
mysterious domain of corporations and uni¬
versities.

The home-computer industry is so new
and so fragmented that it hasn’t got around
to computing its own progress, so nobody
knows how many individuals have bought
computers. But estimates range from 20,000
to 100,000. This trend has been going on for
only a couple of years, but it has already
spawned more than 300 stores, more than
150 clubs and half a dozen magazines.

Some computer experts compare the situ¬
ation to the earliest days of automobiles,
television sets and, more recently, hand-held
calculators. ’Right now,” says one com¬
puter consultant, “we’re just seeing the tip
of the iceberg” in terms of potential de¬
mand.

Why Buy Them?

Why do people want computers? A compu¬
ter’s ability to store information, and cough
it up on demand, makes for endless possibil¬
ities. You can keep up to date on next year’s
tax return so that its actual preparation will
be a breeze. You can have your lawn sprin¬
kler turn itself on and off. You can create
electronic music, play electronic games or
just entertain the neighbors. And much
more.

“You get a sense of a lot of power by get¬
ting the computer to do things you couldn’t
normally do very easily,” says James
Geiser of Cambridge, Mass., a mathematics
teacher who bought a desk-top system a
year ago for $1,100.

About a dozen companies, most of them
small private firms, turn out home comput¬
ers, selling them either by mail order or
through the computer stores. The stores
have sprung up mostly on the West Coast
and in the Northeast. They are geared to the
novice and have such names as Computer
Warehouse Store and Kentucky Fried Com¬
puters (“a computer in every pot”).

The computers available to consumers
are also being used more and more by small
businesses and other commercial users.
They are known in the industry as micro¬
computers; it was the advent of low-cost mi¬
croprocessors that made the notion of home
computers practical.

The 1950s and Today

Microprocessors are silicon chips, usu¬
ally no more than a quarter of an inch
square, on which the equivalent of once-
huge circuit boards can be implanted. Be¬
cause of microprocessors, it is possible to
turn out a computer the size of a portable
typewriter for $800-a computer comparable
in capacity and speed to IBM computers of
the late 1950s that required huge rooms and
cost hundreds of thousands of dollars.

Still, experts say, not everyone who can
afford one should rush out to buy a home
computer. For one thing, they mostly come
in kit form and require some electronics
background to assemble. Also, you have to
know something about programming a com¬
puter to use one.

These problems promise to vanish soon,
says Jim Warren of People’s Computer Co.,
a nonprofit California corporation devoted to
research in the personal-computer field. He
notes that a few small companies have be¬
gun making completely assembled computer
systems that retail for under $1,000, and he
expects other, larger firms to follow their,
lead. He also predicts that packaged com¬
puter programs will gradually become
available; you won’t have to know anything
about programming.

Manufacturers Surprised

Even with the present obstacles, so many
people are buying home computers that even
the manufacturers are surprised. When Na¬
tional Semiconductor Corp. introduced a
$200 computer-system kit last spring, it
never expected to sell the 10,000 to 20,000
kits that a spokesman says have been sold
so far. And When a small Albuquerque,
N.M., firm known as MITS Inc. came out
two years ago with what it calls the first
home-computer kit, the company quickly
fell eight months behind in filling orders.

“I projected 800 machines in 1975, and
people said I was a wild-eyed optimist,” re¬
calls Edward Roberts, MITS president. “We
shipped more than 5,000 machines in 1975.”
They retailed at $400 each.

That kind of success has encouraged
larger concerns to look more closely at the
home-computer market. International Busi¬
ness Machines Corp., while declining to dis¬
cuss its own plans, says “it’s a matter of
time” before “computers are generally
available for home use much as calculators
are today.”

Large retailers are beginning to express
interest. A spokesman says Sears, Roebuck
& Co. “is watching this scene very care¬
fully.” While Sears has no immediate plans
to market a home computer, the company is
“very aware of it from a long-range point of
view,” he says. Similarly, a spokesman for
Montgomery Ward & Co. says its executives
are “watching the home-computer market
very closely” although it, too, has no immi¬
nent plans to market models.

One large firm ready to plunge into the
home-computer area is Tandy Corp.’s chain
of 6,000 Radio Shacks. The chain will proba¬
bly begin marketing its own computer kit
“before the end of the year,” says Bill Nu¬
gent, executive vice president of the chain.
Its price, he says, will probably be $300 to
$400.

The computer stores have gone a long
|way toward taking the mystique out of com¬
puters. They tend to be small stores with a
few computer systems on display, a section
for repairs, and a salesman or two to ex¬
plain things. “You walk into one of these
stores and a guy comes out in a plaid shirt
usually with a beard” to push his comput¬
ers, marvels Neil Kleinman, marketing di¬
rector of International Data Corp., a com¬
puter-industry-research firm. “It’s a freaky
thing, especially if you have a big-computer-
company mentality.”

At the Computer Warehouse Store, situ¬
ated next to a pizza parlor and a billiard
hall near Boston University, the emphasis is
on price. Large hand-printed signs describ¬
ing the computer systems carry the prices
in bolder characters. “The Cadillac of mi¬
crocomputer kits,” boasts one sign pushing
a $651 kit. Leaflets around the store promise
one-day shipment for various kits.

The store opened last July, and sales that
month totaled $5,000. Since then, they have
climbed more than eightfold, says Adolph
Monosson, an owner. Perhaps even more
important: “Over all, there’s been a decline
in the technical expertise of the people who
come in here,” says the store’s manager.
Lee Ridlon.

There is no doubting the enthusiasm of
the new computer owners. Between 150 and
200 computer clubs with 15,000 to 20,000
members have been organized over the last
two years, says Mr. Warren of People’s
Computer Co. The clubs have sponsored
conventions. One in Trenton, N.J., last May

Home Input:

The Computer Moves
To Your Living Room

drew 1,500 people; another in Atlantic City
last August drew 4,500; a conference
planned for San Francisco next April is ex¬
pected to attract between 7,000 and 10,000.

The home-computer magazines are
aimed largely at novices. Their articles bear
such titles as “Learning Computerese,”
‘Understand Your Microprocessor” and
“Computer Widow.” Among the magazines
are Byte (a byte is a measurement of com¬
puter information), Personal Computing,
and Dr. Dobb’s Journal of Computer Calis¬
thenics and Orthodontia. Byte, which started
in September 1975, is the largest, with 73,000
circulation. In addition, there is a Boston ra¬
dio program especially for home-computer
owners.

David Halliday, owner of a biological-in¬
struments firm in Cambridge, says he
bought a $245 computer system to help him
in his hobby of formulating electronic mu¬
sic. He says he is so happy with the results
that he is considering an electronic-music
career.

A retiree in Naples, Fla., uses his home
computer to play a variety of games rang¬
ing from craps and blackjack to WARI, a
board game designed especially for comput¬
ers. He says WARI is about as hard as
checkers. “The computer takes about 30 sec¬
onds to think about each of its moves,” he
says. “The first few times I played with it,
it beat me badly. Now I can hold my own.”

Another game popular with home-com¬
puter enthusiasts is Lunar Landing. The ob¬
ject is to make a soft landing on the moon
by adjusting the rate at which fuel is burned
in a series of stages. If you calculate cor¬
rectly, the computer prints out, “Perfect
landing, Congratulations.” If you miss,
you’re told, “Crash landing. Sorry, no survi¬
vors.”

Mr. Geiser, the Cambridge mathematics
teacher, says he does a little of everything
with his desk-top computer, which he has
nicknamed Roy, Mr. Geiser, who shares a
house with seven other people, uses the
computer to keep track of who owes what
for food, phone bills and other household ex¬
penses. He also uses it to construct eharts of
“biorhythms”—physical, emotional and in¬
tellectual peaks and valleys-for himself
and his housemates; to explore mathemati¬
cal theories; and to store records of stu¬
dents’ homework and grades. “I’m amazed
by what Roy’s doing,” Mr. Geiser says.

Friends of computer enthusiasts may
benefit, too. Nancy. Mullin, a teacher who
lives in Mr. Geiser’s house, says that before
she saw Roy in action, she had “all these
ideas about computers being cold and im¬
personal.” But Roy, she says, is almost
“like another member of the house. 1 don’t
feel intimidated at all anymore.”