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Computer systems in the 1990s.

As beverage distributors look at computer systems, they face a lot of choices. There are so many competing claims. What is really going on in the world of computers today? What should a small or medium business be paying attention to?

There are three types of systems being offered to the beverage industry:

1. The traditional mini-computer has held the bulk of the market since its inception in the 1980s. It is most commonly represented by the IBM 36, IBM 38 or IBM AS/400. The software and peripherals are proprietary. This means they only work on these computers. In beer distributors of over 10 routes, these systems represent 50 percent of the computers installed, although this share is declining. Three-quarters are the aging system 34/36/38s. Many of these will be replaced with PC networks or UNIX open systems.

2. The PC network had explosive growth through the '80s although that growth has slowed dramatically in the '90s. PCs are standard in a single-user environment, but the software to integrate PCs with each other, peripherals and support multiple users is not standard. You are responsible for resolving compatibility issues.

3. The UNIX-based workstation is the fastest growing segment of the computer market in the 1990s. Workstations offer standards for software and peripherals with built in integration for multiple users. The advantages of the PC network and traditional mini are combined. The IBM RS-6000 is a Unix-based workstation. Unisys, Sun, Hewlett Packard, Digital Equipment and others make similar products.

According to IBM President Jack Kuehler, IBM'S traditional minicomputer, the AS400, is only expected to show a single-digit percentage revenue increase for 1992, down from double-digit levels of the past three years. But IBM also expects a 10-percent drop in its PC business. Where are IBM'S customers putting their money? The rising star is the RS-6000, a newer type of computer, a UNIX-based workstation. With growth of 60 percent in 1991 and projections of 50 percent in 1992, it has shown substantial revenue gains for a product that produced $1 billion in revenue its first year on the market (1990).

John Boddie, in his article "A Different IBM" in the April 1992 issue of News 3X-400, a publication for IBM Systems 36 and AS400 users, states, "It's unlikely that IBM will continue to support the 3X-400 architectures with systems more closely related to the RS-6000." Boddie did a hard thing, telling his readers (AS400 users) something they did not want to hear (They will have to convert yet again). However, his logic is impeccable. Why should IBM market two different systems that do the same job and why is so much of IBM'S R&D budget going into the new RS-6000?

On the positive side of this coin is the article by Brian Jeffery in the March 17, 1992 Midrange Systems "Fated Attractions," subtitled "As System/36 Users Contemplate Migration Affairs, the RS-6000 could prove to be irresistible." The RS-6000 uses UNIX. UNIX has become the most widely installed multi-user operating system in the computer industry. In fact, in 1991, over three-quarters of the multi-user systems installed in businesses with fewer than 1,000 employees in the U.S. were UNIX. Jeffrey focused particularly on the commercial users of UNIX. He states, "The grass-roots flavor to most of the commercial UNIX business is reminiscent of the way the S-34 and S-36 community developed in the late 1970s and early 1980s... Both tend to be heavily focuses on bread and butter issues. "

PC growth is slowing just as AS400 growth is slowing. You may ask why when beverage distributors are still investing in PC networks and AS400s. Unfortunately, small business people often buy into the last half of a technology cycle rather than the first half. Larger companies are replacing their divisions' PCs with Unix-based workstations to eliminate or simplify their networks.

The advantage of the Unix-based workstation is that it offers the standards of the PC, yet the integration of the traditional mini. The traditional mini (e.g. AS-400) is proprietary. Software, printers and terminals for it can only run on it. You are locked in. This is not true of a UNIX workstation. The PC lacks integration. It must be networked. It is more expensive to add stations and the network must be actively managed. This is not true of a UNIX workstation.

One of the reasons PC networks are so popular is because they are excellent revenue sources for the seller. In the December 1991 issue of Var Business, a magazine for computer resellers, Curtis Franklin, Jr., in his article "As the Net Grows Wider So Do the Opportunities For Sales," quotes a typical network reseller. "Single-site networks require care an feeding on a regular basis. That's billable time and we see it growing dramatically." Great for the computer business, not so good for your business. As each printer, additional PC or other element is added to the network, you are responsible for making more things work together. The article goes on, "Tasks which, on single-unit or multi-user systems are relatively straight forward, from updating to a new version of software to installing a serial port, can be enormously complicated on a LAN." LAN stands for Local Area Network.

"Can LANs Beat Minis?" in May 1991's PC Magazine, showed that the initial perception of network costs did not match reality. Buyers thought hardware would be 60 percent of the cost, software 20 percent, outside help five percent, internal cost five percent and maintenance five percent. Reality was hardware comprised 20 percent of the cost, software 10 percent, outside help 15 percent, internal cost 45 percent, maintenance five percent and supplies five percent. Hardware is becoming a small part of an overall systems cost, yet many prospective buyers do not keep this in mind when making a decision.

Barry Nance, in his article "The Black Art of Networking, " which appeared in the December 1991 issue of Byte, confirms the high cost of administering Local Area Networks (LANs). "Vendor claims to the contrary, most LANs still require a high level of expertise and many hours of ongoing troubleshooting to make them work."

Market Insight Report by the Business Research Group in June 1991, found that users typically did not take into account the full life cycle operating cost of their networks. The study particularly notes that as networks grow, the complexity of administering them grows dramatically. The time of your staff to manage the network will be your biggest cost, yet this is often not considered in the decision to purchase a PC network.

Infonetics, Inc., as reported in the article "The Cost of LAN Downtime " in Personal Computing magazine, surveyed 100 systems managers using PC386-file servers. The findings:

1. The networks were disabled six percent of the time.

2. The average length of downtime was 4.9 hours.

3. A network with more than eight users requires a full time support person.

4. No single vendor provides a total solution. There are no standards for database management, I/O support, user interface or network communications.

Unix-based workstations extend standards to multi-user environments offering a great advantage over the PC which is standard only in a single-user environment. At the same time, UNIX-based workstations provide the cheapest growth path possible. An inexpensive terminal can be put on to add a user and compatibilty is not an issue. This is why those companies with the longest experience in PC networks are leading the way into the UNIX workstation market.

Times are changing rapidly. Many beverage distributors already have Unix-based workstations. The Anheuser-Busch, Inc., system uses a Unix-based workstation. Two major independent companies supply UNIX-based workstations with beverage software to beverage distributors. The number will grow. The alert distributor will buy into the front half of the cycle rather than the last half.

Max Landman received his A.B. in economics from the University of North Carolina in 1967. After serving as a lieutenant junior grade in the U.S. Navy from 1967-1969, Landman began working in computer programming and EDP audit. He received his MBA from the University of Miami in 1977, and since 1989 has been the president of insight Distribution Systems of Hunt Valley, MD.
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Title Annotation:Computer Focus
Author:Landman, Max
Publication:Modern Brewery Age
Date:Jul 13, 1992
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