waters@ois5.dec.com (09/06/86)
Associated Press Thu 04-SEP-1986 16:17 Digital Products Digital Drives Deeper Into IBM Territory By PETER COY AP Business Writer NEW YORK (AP) - Digital Equipment Corp. hit IBM on its home ground Thursday with products that several analysts said provide a better way for personal computers to communicate with the wider world. Digital's new packages of networking hardware and software strengthen the company's challenge to International Business Machines Corp.'s domination of office computing, several outside experts said. Digital, which is based in Maynard, Mass., announced its products at a news conference at its plant in Merrimack, N.H. ``I see these announcements as IBM killers. They're missiles aimed directly at IBM accounts,'' said George Colony, president of Forrester Research Corp., a consulting firm in Cambridge, Mass. Digital, which has grown rapidly to become the world's second-biggest computer maker after IBM, bills itself as the leader in building networks that allow computers to work together and share information. IBM has announced several steps to improve communications between its personal computers and its maze of other computer lines, but Digital has won new customers with the message: ``Digital has it now.'' Digital announced three major products Thursday: -PC All-In-1, an $81,160 package of hardware and software that it said ties together up to 30 IBM-compatible personal computers into an office network with the company's MicroVAX II computer as the traffic cop. -A piece of software called VAX-VMS Services for MS-DOS that sits inside Digital's VAX and MicroVAX computers. It allows the powerful machines to act as servants to IBM-compatible personal computers, sharing files and programs with them in their own language. It ranges in price from $650 to $19,500, depending on the configuration. -Digital's first IBM-compatible personal computer, dubbed VAXmate, which is compatible with IBM's top-of-the-line PC AT. The VAXmate has a base price of $4,045 and costs $6,040 with a 20-megabyte hard disk drive, which is costlier than big-name competitors and about double the price of the cheapest AT ``clones.'' However, it has extra features enabling it to communicate easily with Digital's own VAX line. Digital ignored the personal-computer revolution that was sparked by IBM with its introduction of its PC five years ago, and the announcement of the VAXmate is an important step toward getting into the game, said John Dean, an analyst for Montgomery Securities Inc. in San Francisco. In addition to Digital's, new personal computers built around Intel Corp.'s fast 80286 microprocessor have been introduced this week by IBM, Compaq Computer Corp. and Sperry Corp. However, although the VAXmate got most of the advance publicity, analysts said the networks for linking computers to each other were more significant. ``If you look at the 5 to 6 million PCs that are out there today, the real opportunity for them is to try to integrate the existing PCs into a DEC network,'' Dean said. ``It's not just a piece of wire; it's a very intelligent network,'' Colony said. ``What is most irritating to IBM is that Digital has it now. IBM has been quick to announce and slow to deliver,'' he said. The Digital system should please the managers of information systems at Fortune 1,000 companies because it will allow popular programs such as Lotus 1-2-3 and Microsoft Word to sit on VAX computers, where they are under more control. As it is now, each PC user has the software on a different floppy disk, and discrepancies can arise between versions. Microsoft Corp. of Redmond, Wash., and Network Innovations Corp. of Cupertino, Calif., make some of the software used in the new products. ``What we're seeing is the emergence of a strong No. 2 company in the computer business. We've never had that before, unless you look back to the 1950s, when there was Sperry UNIVAC, and IBM doesn't like that,'' Colony said. Burroughs Corp. and Sperry will exceed Digital in computer revenue when they complete their merger later this month, but most analysts say IBM regards Digital as a more threatening rival. ``If you looked at the top three things that IBM was looking at today, it would be AT&T; the Japanese, and DEC,'' Dean said. ``AT&T because they are in the total information-processing world; the Japanese because they need the latest computer technology to grow their economy; and DEC because DEC has made such tremendous inroads over the years.'' ``Sneakernet'' is the way many companies share computerized information today, Jack Shields, Digital's senior vice president for sales and marketing, said in a telephone interview. That is, he said, they put data on floppy disks and have messengers in sneakers distribute it. One big New York financial-services company spends about $50,000 a month on ``sneakernet'' and will be able to make back its $81,000 investment in PC All-In-1 in about two months, Shields said. Although Shields said PC All-In-1 would work well even in companies that had only IBM equipment, Dean said it was likely that most sales would be made to companies that had some Digital computers already.