H 10 '?7
PRESS
REVIEW
The following articles are reprinted solely as items of interest for the independent evaluation by members of
A TSU. The opinions, statements of fact, or conclusions expressed herein are not those of the Association.
W
Report Foresees Snags for Distributed
NEW YORK — Users who opt for smaller distributed systems
as a lower-cost alternative to central general purpose computers
may be in for a surprise, a report on the computer industry from
Arthur D. Little indicates.
Systems Users
The report, which analyzed some of
the hidden economic and technological
shortcomings of distributed systems,
stated that while small computer
systems offer more computing power
per dollar, they also involve higher total
peripheral equipment costs. The larger
mainframe computer systems still offer
economy of scale, it said.
“If the local computer is to be ver¬
satile and itself support multiple modes
of use (batch, time-sharing and perhaps
transaction processing) it cannot be
below a certain size. It must have a large
memory and contain the nec essary
systems program and probably an exten¬
sive complement of peripherals.”
Smaller systems, the report con¬
tinues, are often more difficult to use
than large systems.
“The language processors, telecom¬
munications systems programs, file
processors and operating systems of the
general-purpose systems have evolved
to a high level of functionality over the
years.
“Users often do not fully appreciate
them until they try to use the more
limited products offered with the
smaller machines. The gap in perfor¬
mance will narrow with time, but the
providers of systems programs for the
smaller systems will have difficulty
catching up with the systems programs
offered for large general-purpose
systems, particularly since the latter are
continually evolving,” it noted.
The report said users of distributed
computer networks have rarely
achieved the complete freedom they
sought. “If they want to intercom¬
municate, they must abide by common
communications standards. If they want
to use one another’s machines, they
must abide by common programming
language and configuration standards
(at best) or use identical systems from a
common manufacturer (at worst).
‘Must Be Documented*
“If the applications they develop are
to be understood by others for their own
use, or for modification and
maintenance, the applications must be
prepared and documented in meticulous
conformity with common standards.
The proponents of networks designed to
provide all these-services — intercom¬
munications, equipment sharing, and
application sharing — are confronted by
a more difficult management problem
than they had with centralized general-
purpose systems, where all users were
automatically constrained by the stan¬
dards of a single system,” according to
the ADL report.
Until distributed computer networks
have the ability to handle complex
applications conveniently and flexibly,
says the report, “The general-purpose
system will remain the dominant data
processing tool. However, its
dominance will be steadily eroded as
more and more users adopt distributed
computer networks for the applications
these systems do handle well. Such
adoptions are being fostered by several
of the computer manufacturers, whose
approaches are illustrative of the pre¬
sent state of the art on computer
networking.”
One approach being used is to provide
the interfaces and systems programs for
interconnecting small computers, and
then to invite users to develop their
applications as best as they can with the
limited software tools available for the
smaller machines.
This approach, the report says, “is
typified by Digital Equipment with its
DECnet offering, and has been
successful with users who are willing to
be pioneers, such as Educom, Citicorp
and Bank of America.” By following
this approach, a producer can hope to
get an early foothold in the market and
later expand it as more versatile
software tools become available, accor¬
ding to the report.
NCR Approach
A second approach, it was noted, is to
“concentrate only on applications
within the state of the art of distributed
computer networking. A company
following this path would provide com¬
plete software for these applications
and hope to grow through early
dominance of a market which, although
specialized, is amply large.” It called
NCR the main proponent of this ap¬
proach, saying the firm offers packaged
networks for retailing and banking
applications. “Our studies indicate that
a great deal of growth is in store for
these application areas as electronic
funds transfer networks evolve; if NCR
could dominate this area, it should be
able to grow substantially without
having major positions elsewhere,” it
said.
A third approach cited by the report is
IBM’s system network architecture. As
the state of the art permits, IBM is slow¬
ly moving its systems programs for com¬
plex applications putward from the cen¬
tral general-purpose computer without
ever offering systems programs of lesser
functionality, according 4o ADL.
Thk approach,’’ says the report,
“reflects IBM’s recognition that most
users neither are wiMng to be pioneers
nor are in %dustries wkfa only simple
applications Ibe theory behind thisap-
proach is thafmost users want, above
all, foe bestsqftww for
their , apphcaflons, ahd me probably
willing to wait for?|heVfliil -benefits of
distributed cqn^t» «^woiks until the
networks can software
tools.
To summarize, the report says, dis¬
tributed computer networks have
already made considerable inroads into
the dominance of the centralized
general-purpose computer, and substan¬
tial opportunities for further growth
exist.
“The general-purpose system will
hold its own fairly well, however, until
network systems programs are available
for handling complex applications. This
might take 5 years and during the in¬
terim, manufacturers may offer users a
wide and probably confusing diversity
of alternatives.”
Reprinted by permission. Electronic News, April 11, 1977, Copyright 1977.
Survey Uncovers Disagreement
On Future of Pricing for T/S
By Molly Upton
Of the CW Staff
There’s not much agreement among time¬
sharing vendors over pricing trends in the
industry, a Computerworld survey has
found.
While one vendor expects prices to in¬
crease, another cited price competition and
yet another sees stable pricing conditions.
There’s also some disagreement over
whether time-sharing firms are moving to
take some of the black art out of calculating
the costs of their services and to make them
easier to understand by the consumer.
One indicated his firm is using transaction
pricing on at least some applications.
Transaction pricing involves charging a set
fee for an identifiable task, such as an item
update.
Currently most services charge on the
basis of an algorithm calculating the re¬
sources used, and these have various names
and include different proportions of CPU
and I/O resources.
John Lewis, president of Real Decisions
Corp., a Stamford, Conn., consulting firm,
said the only trend toward standardization
of pricing among vendors is that several ere
aggressively studying a move to transaction
pricing.
But Russ Gloersen, manager of product
support services at National CSS (NCSS),
said he thinks several firms are moving in
the direction of more simplified rates that
are easier for consumers to understand and
compare.
NCSS is planning to extend its Applica¬
tion Resource Unit (ARU) which charges
one price to various portions of systems
whose prices were previously different. This
scheme is in effect on its Nomad data base
package.
This would not be a price break, but
rather an equivalent to what users are now
paying, Gloersen explained.
Originally it was reasonable to charge on
the basis of CPU utilization since much of
the work on time-sharing systems was pro¬
gram development and programmers are
concerned with CPU utilization, he said,
adding more emphasis is now on applica¬
tions and CPU use is no longer the prin¬
cipal criterion.
While transaction pricing would facilitate
comparison shopping, it tends to be ap¬
plicable only to applications packages
where the unit can be defined in end-user
terms, Lewis said. Also, it is not easy for
vendors to establish prices under this
method, he added.
Although many firms are studying trans¬
action pricing, no one wants to be first,
Lewis said. The first firm offering transac¬
tion pricing will receive a lot of attention,
but it will also be the target for underpric¬
ing by other firms, he believes.
Rapidata, Inc. has instituted transaction
pricing on its cash management service and
plans to implement it on other applications,
especially those involving the firm’s Rapid-
voice Touch-Tone phone applications, ac¬
cording to Harvey Hendler, marketing
manager for capabilities.
Transaction pricing makes marketing
easier because the price is predictable by the
consumer and overcomes a lot of uncertain¬
ties in doing business with time-sharing
companies, he said.
Hendler conceded, however, that develop¬
ing pricing for transaction processing is
quite difficult technically.
Future of Pricing
Will prices go up or down?
Gloersen said he’d heard rumors of indis¬
criminate discounting where vendors use
discounts without any present volume re¬
quirements in order to induce users to sub¬
scribe to their service.
NCSS, he observed, offers discounts to
large customers whose costs exceed a
specified amount.
Rather than seeing price cutting, Hendler
anticipates price increases in the future by
several vendors that he declined to name.
Remote computing services have
stabilized and most companies are success¬
ful not on the basis of price, but on the
merit of their services, which are hopefully
unique, he said.
Rapidata, which specializes in services to
financial institutions, recently dropped
prices on storage of files accessible by its
data base system. Rather than a reaction to
what other firms were doing, Hendler said
this was “just a realistic approach to the
financial marketplace.”
Among those raising prices was Manufac¬
turing Data Systems, Inc. of Ann Arbor,
Mich., which increased prices about 10%.
Tymshare, Inc. raised its connect rates on
its Digital Equipment Corp. Decsystem-lOs
and IBM 370s on March 1 from about $10-
to $ 12/hour on the prime shift and also
raised connect charges on nonprime-time
shifts from $5- to $6/hour.
This was an adjustment to bring the firm
more into line with prevailing rates,
although Tymshare’s connect prices are still
comparatively low, he said.
He doesn’t foresee any radical price cut¬
ting in the industry. Prices are tending to in¬
crease, if anything, he said.
However, he observed, price frequently
isn’t the determining factor in choosing a
network.
Although there may be some future ap¬
plications for which transaction pricing
might be desirable, Tymshare currently
does not use this pricing method, he said.
Last summer Tymshare received an unex¬
pectedly large response when it cut in half
its rates for work processed during
nonprime-time hours.
With the trend toward remote batch type
of work rather than straight interactive
jobs, many users took advantage of the
price break, he said. The initial effect was to
lower revenues for the next quarter, but by
now the firm’s earnings are continuing to
improve, he added.
One reason why Tymshare decided to in¬
troduce lower prices for nonprime-time was
that it sought to avoid adding more CPUs
by leveling the workload.
Control Data Corp. raised Iprices on its
data services an average of 8.5% between
December and January. The firm cited in-
ceasing costs of labor and materials as the
reason.
Bill Bird, president of Itel Corp.’s Data
Services Group, sees industry prices re¬
maining fairly stable.
The industry is based around a semifixed-
cost item and, as volume increases, profits
should also rise, he said, so he sees no
reason to increase prices.
Bird cited pressures from the decreasing
costs of minis. “Companies like ours with
on-line services are going to have to think
twice about increasing prices so we don’t
force people off our systems to get their
own.
However, Bird doesn’t anticipate prices
will drop.
Reprinted by permission. Computer World , April 4, 1977, Copyright 1977.
Database service to link United States,
United Kingdom computerized files
NEW YORK - Stores of computerized in¬
formation in the United States and in the
United Kingdom will soon be accessible to
users in those countries via Western Union
International’s new Database Service (DPS).
Recently authorized by the Federal
Communications Commission, DBS will
permit doctors, scientists and businessmen
to access databases over the public tele¬
phone network connected to a special
transatlantic system.
Within the U.S., DBS will initially be
available through Tymnet, Inc,’s, domestic
network, and directly through Western
Union International, a U.S. international
communications carrier not affiliated with
the domestic telegraph company. Inter¬
connection on additional domestic net¬
works is expected in the near future.
Computerized information retrieval ser¬
vices were introduced in this country sev¬
eral years ago. They allow a subscriber to
have immediate access to the latest re¬
search in hundreds of specialized fields by
requesting the information at a typewriter¬
like terminal device. In 1970, 150,000
such database searches occurred in the U.S
by 1975, the number had mushroomed to
over one million. With the introduction of
DBS, these U.S. databases will become ac¬
cessible to people overseas.
Perhaps the best known of the informa¬
tion retrieval services is the National Li¬
brary of Medicine’s “Medline,” which pro¬
vides the medical industry throughout the
United States — and now throughout the
U.K, as well - with immediate access to
the most current medical data available.
In addition, private organizations, such
as Lockheed and System Development
Corporation offer computerized libraries
in such fields as business, economics, ener¬
gy and geology.
DBS is tailored to businesses and other
organizations that need periodic access to
overseas computer facilities for short
streams of information. Its volume-sen¬
sitive rates include $1 per six-minute con¬
nection and 50 cents per 1,000 characters
transmitted, with a minimum charge of
$6 per use.
DBS also provides international data
communications access for in-house remote
computing. Thus, multinational corpora¬
tions can access their own computer facil¬
ities across the Atlantic for such applica¬
tions as order entry, inventory control,
billing, payroll and sales statistics.
DBS is compatible with data terminals
operating from 110 to 1,200 bits/second.
Reprinted by permission. Minicomputer News, March 25, 1977, Copyright 1977.
Users Benefit With Rate Reductions
FCC Tariffs Tymnet as
Second Public Packet Carrier
By Ronald A. Frank
Of the CW Staff
CUPERTINO, Calif. — Tymnet, Inc. has
become the second public packet carrier to
serve U.S. users after approval of its first
tariff by the Federal Communications
Commission (FCC).
Tymnet began operations in 1971 and had
been providing service under joint use and
sharing arrangements until it w ns
authorized to operate as a carrier last De¬
cember. Telenet Communications Corp.
"/as the first packet network carrier to gain
FCC approval.
About 50 users of the Tymnet packet
network will be affected by the change to a
tariffed service; most will receive a 10% to
20% rate reduction depending on the
volume of data transmitted, according to a
Tymnet spokesman.
The reductions will be made possible by
discounts based on volume included in the
tariff.
The carrier also received FCC approval to
increase its network from 63 to 111 metro¬
politan areas. The network now includes 26
high-density, 47 low-density and 38 foreign
exchange areas.
The public packet net includes 70 intel¬
ligent nodes served by a network processor.
Unlike other networks, only three Tymnet
nodes are nonintelligent and operated with
multiplexers, the spokesman noted.
Most processors in the network are sup¬
plied by Varian Data Systems and include
620s, V72s and V73s. More recent nodes
have Interdata 7/32 processors.
At present, the network does not provide
an X.25 interface, but discussions are being
held with the Trans-*Canada Telephone Sys¬
tem (TCTS) to offer a link to the Canadian
Datapac net, the spokesman said.
Tymnet service is provided for a single
user or up to 256 users from the same or¬
ganization with monthly charges for host
processor interfaces, ranging from $100 for
a single user to $2,750. As many as four
host processors for one organization can be
accommodated by a single interface, Tym¬
net said.
Measured usage charges for 110- through
1,200 bit/sec service are composed of con¬
nect time, ranging from $1 to $5 per hour
depending on location and numbers of
hours monthly, and character volume
transmitted monthly. Cost per 1,000
characters transmitted ranges from 3 cents
to 10 cents, depending on volume and
transmission speed.
Users can elect dedicated host ports,
rather than measured access and characters,
at a cost ranging from $300 to $650 month¬
ly depending on the number of ports used,
the spokesman added.
An expanded message-switching service
with store-and-forward capability will be
introduced soon.
Tymnet is at 10261 Bubb Road, Cuper¬
tino, Calif. 95014.
Reprinted by permission. Computer World, April 11, 1977, Copyright 1977.
