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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. 


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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.