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Personal Computer Use Grows.

The personal computer is the darling of the decade. The American people, always susceptible to a craze for the latest "in" thing (be it a hula hoop, a CB radio, a digital watch or a pocket calculator), are buying personal computers in record numbers. And, while the immedate appearance of many personal computers on American desks is important, even more important, we feel, is the long-range implication of having PC's in American homes. Today's junior high, high school and college students will enter the job market during the next decade thoroughly familiar with terminal keyboards and totally comfortable with a work station" on their desks.

According to Henderson Ventures, a Los Gatos, California research firm, "The pervasiveness of the personal computer will be the single most important factor in the long-term data communication growth. Literally millions of corporate users will provide grass-roots support for efficient and sophisticated intra-corporate data communication networking."

The personal computer industry has made incredible strides in a short time. Since its emergence in 1977, the personal computer marketplace has spawned literally hundreds of entrants. Some have already passed from the scene, but as each one has folded, dozens more appear, offering still greater capabilities at a lower cost.

The Eastern Management Group recently announced a "best-worst scenario" study which suggests that three possible futures may lie in waiting for the personal computer industry. They are represented in the three scenarios listed below:

The "best possible future would see business and home market revenues soar as manufacturer's production capabilities would barely keep pace with shipment demands. All markets would eargerly accept the new technology. Competition from workstations and terminals would remain minimal through 1991. And the home market would burst open as an initial hesitancy quickly disappeared.

The "Eastern Management Group" initialhome market hesitancy scenario sees, over a 10 year span, gradually supplants by acceptance. Business personnel would lead the way in consumer purchasing of personal computers. Portables would add impetus to overall sales, but competition from workstations and terminals, high pricing and initial home consumer naivete would combine to limit potential sales.

The "worst" possible future would see shipments experiencing limited penetration due to home user reluctance to meet high prices. Also, business would seek alternate data machines, such as executive workstations, or refuse to acknowledge the need for a personal computer, and thus ignore the market. Sales would still do well initially, but by 1990, shipments would peak as a reluctant market begins to saturate. A dramatic slowdown would ensure, until it begings to level off by 1992.

Consultant John Diebold believes that microcomputers and personal computers are on their way to becoming the biggest factor in the computer industry, forcing major changes in computer vendors' strategies.

Microcomputer sales will surpass mainframe sales before the end of 1986 . . . and possibly even 1984, Diebold predicts. Companies in every part of the computer industry are rushing to tap the vast market for micros in homes and businesses, he adds, noting that firms that were profitable selling giant computers one at a time now have to revise their strategies to sell thousands of little ones.

In 1983 there were about 56,000 mainframe computers in the United States and 570,000 minicomputers. Yet 2.4 million microcomputers were sold in the United States last year alone, Diebold said, adding that his research indicates that personal computers are being bought by the thousands in businesses, but not by the traditional purchasers . . . the MIS or computer systems departments . . . but by the nontechnical end users. These users are bypassing traditional channels and acquiring personal computers directly.

By the end of the decade, microcomputers will account for 30 percent of a business's data processing expenditures. What this means, according to Diebold, is an entirely new strategy for computers vendors. The needs of noncomputer professionals . . . middle managers, enigeers, personnel directors and other personal computer users . . . will be different from the needs of their computer systems personnel.

Micro-to-mainframe communictaions products and services have entered a period of "explosive growth", according to a new 224-page IRD research report. The report, which details the results of a recent study and user survey conducted by International Resource Development Inc., predicts that users will spend more than $500 million on micro-to-mainframe communications in 1984, compared with about $220 million in 1983. Further rapid growth is expected throughout the remainder of the decade. However, IBM is already described in the report as "moving off the sidelines" with the introduction of its 3270-PC and XT-370, both new products aimed at micro-to-mainframe communications, and AT&T has entered the fray.

In a survey of "leading-edge" large United States corporations, the IRD researchers found that 46 percent of respondees were already implementing, or had begun to implement, formal corporate-wide programs for connecting microcomputers to corporate mainframes. Another 44 percent were conducting studies or pilot programs in this area. Only one of forty "Fortune 500" companies contacted had decided firmly against allowing micros access to corporate mainframe computers. The results of the survey indicate an "important turnaround" in the attitudes and activities of corporate MIS directors, claims IRD.

Reviewing the current "frantic" activities of more than forty vendors of hardware, software, or both, for micro-to-mainframe communications, the IRD study singles out Digital Communications Associates, Hayes Microcomputer Products, and Davox as particularly-rapidly-growing beneficiaries of the current strong user interest in micro-to-mainframe communications.

Everyone is looking at the personal computer market and Frost & Sullivan says that personal computer communications hardware, software and services comprise a $300 million market, which will grow to $1.4 billion by 1987.

Circuit boards and associated equipment that allow personal computers to the largest single hardware category, accounting for $76 million in 1983 sales and due to hit 336 million in 1987, according to the report, "The Personal Computer Communications Market."

Large corporate users are the purchasers of such equipment, as well as local area networks (LANs), which tie together a multiplicity of computers and other devices to allow the sharing of data and peripherals as well as electronic mail applications. LAN station adapters were a $41 million market in 1983 and will be worth $180 million in 1987, according to Frost & Sullivan.

More familiar to small business and individual personal computer users are the devices that allow point-to-point interactive communications through the phone lines.

Financial services firms such as EF Hutton and Merrill Lynch have already established services that can be accessed by personal computer. They'll even sell you one as part of the service package.

Nearly all of the Fortune companies surveyed are currently using personal computers for spreadsheet analysis (95 percent) and word processing (94 percent). Some 75 percent indicated usage of micros for business graphics.

Personal computers have taken the power of the computer out of the sterile glassed-in, atmospherically-controlled rooms, where they were the province of a select few, and placed that power in the hands and on the desks of the "average" office worker, where they're needed, to offer great productivity gains. The PC has flooded the corporate environment, hooking into the mainframes.

One of the major trend is toward integrated software packages, combining previously separate functions such as word processing, spreadsheets and database management in a single package.

"The development of computers that are easily affordable and easily accessible has far-reaching implications for our company, our industry, and our society." Says Stephan Haeckel of IBM's advanced market development group, adding, "The individual . . . as "end user" in the office, and as "consumer" in the home . . . motivated by the need for specific information, and enabled by the falling cost of information technology, will become a primary focus of strategic planning in the 1980s."

Introduced only seven years ago as relatively crude units with little memory, personal computers have rapidly become powerful tools with a virtually untapped potential. They, too, have been "miniaturized" . . . with computer size shrinking from room-filling mainframe size, to desktop models, to transportables, to truly portable versions that can be carried in a briefcase for use anywhere.

The milestone event in the field took place in October 1981, when IBM introduced its now legendary PC, the one that now sets the standard for compatibility. The success of most new software packages and new personal computers is measured by how compatible they are with the IBM PC.

Personal computer communications hardware, software and services comprise a $300-million market, which will grow to $1.4 billion by 1987, according to a new study by Frost & Sullivan. Circuit boards and associated equipment that allow personal computers to "emulate" 3270-type IBM terminals are said to be the largest single hardware category, accounting for $76 million in 1983 sales and due to hit $336 million in 1987.

The report, "The Personal Computer Communications Market," says large corporate users are the purchasers of such equipment, as well as local area networks, which tie together a multiplicity of computers and other devices to allow the sharing of data and peripherals as well as electronic mail applications. LAN station adapters were a $41 million market in 1983 and will be worth $180 million in 1987.
COPYRIGHT 1984 Nelson Publishing
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Publication:Communications News
Date:Sep 1, 1984
Previous Article:Miniaturization Does It All.
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