United States. Congress. Senate. Committee on the.

The Industrial reorganization act. Hearings, Ninety-third Congress, first session [-Ninety-fourth Congress, first session], on S. 1167 (Volume pt. 7) online

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usually small word (typically, 8, 12, 16, or 24 bits) oriented,
and programmed either in machine language or FORTRAN. They are
usually used for only one application at each installation and
normally are purchased. This group includes all the so-called
minicomputers (typically selling for less than $25,000) as well as
certain larger computers and those designed for process control.

Several manufacturers also supply military and airborne computers,
such as Univac 12XX series mil spec, and IBM's 4 Pi. IDC does not
maintain details on these special-purpose computers, nor is their
value discussed in this document.

IBM and several other manufacturers manufacture and maintain
electrical accounting machines (EAM) , including conventional punched-
card equipment such as sorters, collators, and tabulators, however
such figures are not included in user spending and manufacturer
revenue data, but are not monitored by IDC.



4953



USER SPENDING



As part of its annual research about the computer industry,
IDC samples U.S. computer users each fall for an "early warning"
snapshot of projected spending for the next year. Then, at year-
end, a larger cross-section of the user population is polled to
verify the early inputs and detect any changes after budgets are
finalized.

The survey at yearend 1973 indicated that user budgets for
equipment, services, and salaries for 1973 had hit the $20 billion
level (Chart 101) and would increase an average of about 15% during
1974. The study was based on an analysis of EDP budgets at 600
U.S. sites in December, 1973 and combined with a long-range study
of management attitudes at 50 key "Fortune 500" companies.

The distribution of spending on major budget items has shown
only slight changes over recent years — with the expected growth
of emphasis on support hardware for communications and teleprocessing:

+ Salaries continue to eat up 35% of the average DP
budget, similar to five years ago. Users are looking
for fewer but more highly skilled specialists to develop
and maintain their DP operations. On-line data entry
from the source — a possibility that helps make net-
working attractive — is drawing salary dollars away
from the traditional keypunch operator.

+ EDP systems also take 35% of the dollars and support
hardware will account for another 11%. Users say
they're willing to pay for the best equipment avail-
able — but will also try to save money through long-
term commitments to third-party leases and outright
purchases. Users are looking for vendors who can meet
their upgrade needs and be stable suppliers in the
future.

+ Supplies, which will account for 6% to 7% of the average
DP budget this year, as prices increase — mainly be-
cause of rising paper costs — and shortages cause
occasional problems.

+ Services, including "total solutions," timesharing
and keypunching, will account for another 10% of the
bill when spending by "non-DP users is taken into
account. "



4954



+ Custom and packaged software from outside vendors
will consume just over 1% of 1974' s DP dollars.
Most of this goes to supplement in-house software
development.

The bulk of mainframe spending is going for large systems —
following the trend toward centralization as users take advantage
of the economies offered by big machines. By yearend 1974, many
users will already be looking forward to the end of the 370 product
marketing cycle and in increasing numbers will begin marking time
until the next product round — marked by so-called "FS" or the
Future System IBM is expected to announce for deliveries by 1977.



U.S. COMPUTER USER SPENDING




Salaries

25. 2X
$21 OM


Salaries

29.8%

$1215M




Salaries

36%

$4190H


1958


1963




1968


Total Spending;
$83Qf1


Total Spend
$4075H


ng:


Total Spending:
$11,600



Salaries

35.3%

$7056M



Total Spending:
$19,965



Table 101



4955



MAINFRAME MANUFACTURERS



There are many ways of measuring market share — by number of
units versus dollar value, U.S. versus international markets, general-
purpose versus dedicated application (mini) computers, etc. Table
102 is based on worldwide revenue of the current eight, U.S. -based
computer system manufacturers (including the base of the former
GE and RCA computer operations). The data is taken directly from
published information, as noted, or derived from similar sources.
Major observations for the 1969-1973 period:

+ IBM has held relatively stable, about 66-67% market
share ,

+ HIS has been in the 9-10% market share, losing slightly
in 1973,

+ Univac has lost share slightly, from 9% (retroactively
in 1969) to 7% today,

+ CDC has been in the 6-7% range, with relatively major
gain in peripherals and services,

+ Burroughs has slowly but surely gained from 3.7% in
1969 to 5.4% today,

+ DEC has doubled its market share over the past
five years from 1.3% to 2.5%,

+ NCR has climbed, but only from 1.6% to 2.2%,

+ Xerox dropped from a high of 1.5% in 1969 to a low
of 0.7% in 1971, and came back to 0.9% in 1973.



4956



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4957



Another way of looking at the computer marketplace is to measure
the value of equipment installed. (For this purpose, equipment on
rent from the manufacturer is converted to equivalent purchase value
by the method described elsewhere in this submission.) Since IDC's
basic research is based on user descriptions of equipment installed,
this data represents IDC's most reliable measure of the computer
equipment marketplace.

Table 103 gives a summary of the worldwide installed base for
U.S. -based mainframe manufacturers in its U.S., International, and
Worldwide components. More details, plus comparable data for 1972,
is contained in Tables 104, 105, and 1^6.

It should be noted that, in these tables, IDC has summarized
the market position:

+ for U.S. -based manufacturers only;

+ for general-purpose (Group A) and dedicated applica-
tion (Group B) type computers;

+ the tables include percent rate of growth of installed
base (after taking into account shipments of new equip-
ment, retirements, etc.) and percent market share.

In the long run, a computer manufacturer's revenue closely parallels
the growth and size of its installed base. During short time inter-
vals, there can be significant variations as large numbers of pur-
chased computers are shipped (disproportionately increasing revenues)

In Tables 107 and 108, the general-purpose portion of each
mainframer's base has been summarized by rent/ third-party lease/
user-owned. At the bottom of each of these tables the change from
1972 is shown.



40-927 O - pt. 7



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4959



TABLE 104

U.S. - MARKET SHARE
($ Million)



IBM - Mfr'd

- PCM

- Sub (A)

- (B)

HIS - (A)

- (B)

Univac
RCA
Sub
(B) (EMR)

Burroughs

CDC - (A)

- (B)

NCR



DEC -


(A)


-


(B)


Xerox


- (A)




- (B)


Others


- (A)




- (B)


Subtotal - (A)




- (B)



12/72
Inst.
Base

15,73A

1,015

16,749

183



1,365

853

2,218



670



%
Total



59.3
3,8



2,366 ] 9.8
260 ]



8.3



1,262 4.7

935 ] 4.3
221 ]



2.5



105 ]

399 ] 1.9

342 ] 1.7

127 ]

91 ]

903 ] 3.7



24,738
2,093



92.2
7.8



% A

10.6
30,5
11.8
38.2



] 9.6

5.5
(10.3)
( 0.6)



12.6



4.1
1.8



10.0



27.6
39.1



14



45
26.9



10.4
26.2



12/73
Inst.
Base

17,406

1,325

18,7 31

253

2,578
301

1,440

765

2,205

23

1,421

973
225

737

134
555

390
138

132
1,146



%
Total



59.0
4.4



9.6

7.4

4.7
4.0

2.5

2.3

1.8

4.3



27,301 91.2
2,641 8.8



TOTALS



26,831 100.0



11.6



29,942 100.0



4960



TABLE 105



INTERNATIONAL - MARKET SHARE (*)
($ Million)



IBM - Mfr'd

- PCM

- Sub (A)

- (B)

HIS - (A)

- (B)

Unlvac/RCA

(B) (EMR)

Burroughs

CDC - (A)

- (B)

NCR

DEC - (A)

- (B)

Xerox - (A)
- (B)

Others - (A)
- (B)

Subtotal - (A)
- (B)



TOTALS



12/72
Inst.
Base

10,023
218

10,241
107



%
Total



64.7
1.4



1,800 ] 11.9
67 1



1,167



679



412



15,109
567



15,676



7.4



4.3



647 ] 4.5
56 ]



2.6



48 ]

136 ] 1.2

70 ] 0.6

30 ]

45 ]

171 ] 1.4



96.4
3.6



100.0



% A

12.1
35.3
12.6
17.8

] 14.1
]

18.0



21.0



14.4
3.6



13.6



10.4
63.2



16

15



50
54.4



13.7
43.2



12/73
Inst.
Base

11,232
295

11,527
126

2,036
95

1,378
12

823

740
58

468

53

222

81
35

68
264

17,174
812



%
Total



63.4
1.6



11.8
7.7

4.6

4.4

2.6

1.5
0.6



95.5
4.5



Inter. -%

W.W. $

Total

39
18



43

38

37
40

39

29
18



14.7 17,986 100.0



34
19



39

24



38



* U.S. -based manufacturers only



4961



TABLE 106



WORLDWIDE - MARKET SHARE (*)
($ Million)



12/72
Inst.
Base



IBM - Mfr'd

- PCM

- Sub (A)

- (B)

HIS - (A)

- (B)

Univac/RCA
EMR (B)

Burroughs

CDC - (A)

- (B)

NCR

DEC - (A)

- (B)

Xerox - (A)
- (B)

Others - (A)
- (B)

Subtotal - (A)
- (B)



TOTAL




4,166 ]
327 ]

3.385



1,941

1,582 ]
277 ]

1,082



%
Total



61.3
2.9



10.6
8.0

4.6

4.4

2.5



42,507



100.0



% A

11.1
31.4
12.1
30.7

] 11.5
]

] 6.9
]

15.6
] 7.4



11.4



12/73
Inst.
Base

28,638

1.620

30,258

379

4,614
396

3,583
35

2,244

1,713
283

1,205



153 ]




22.2


187


535 ]


1.6


45.2


777


412 ]


1.3


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471


157 ]




]


173


136 ]




47.1


200


1,074 ]


2.8


31.3


1,410


39,847


93.7


11.6


44,475


2,660


6.3


29.8


3,453



12.8



47,928



%
Total



60.5
3.4



10.5

7.5

4.7
4.2

2.5

2.0
1.3

3.4

92.8
7.2

100.0



* U.S. -based manufacturers only



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4965



Currently Marketed Computer Systems

Table 109 lists those computer systems actively marketed and
currently being manufactured by the general-purpose manufacturers.
Observations:

+ IBM covers the entire spectrum, with all models
relatively new.

+ HIS has been updated to reflect the recent Series
60 product announcements, they similarly cover the
entire spectrum, although there is some gap in the
U.S. marketplace parallel to the IBM 370/125 and
135.

+ Univac covers most of the price ranges, and with
the recent introduct of the 90/30, the company
seems to be taking an up-to-date approach for
replacing models dating back to 1967.

+ Burroughs covers the entire price range.

+ CDC, even with the recently announced 17X series,
still concentrates on the over $40,000 monthly
rental range. The small and medium 31/32/3300
is now out of new-built production.

+ NCR, with its five models of the Century series,
cover_ the five small to medium price ranges.



Marketplace Performance of Systems Manufacturers

The chart on page 25 shows in a general way the result of
past and expected future shipment activity by U.S. computer systems
manufacturers on a worldwide basis. (Dedicated application and
minicomputers, which account for only a small percentage of the



Online LibraryUnited States. Congress. Senate. Committee on theThe Industrial reorganization act. Hearings, Ninety-third Congress, first session [-Ninety-fourth Congress, first session], on S. 1167 (Volume pt. 7) → online text (page 11 of 140)