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

. (page 35 of 140)
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 35 of 140)
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APPENDIX C (4)

2. THE COMPETITIVE SITUATION IN THE SMALL COMPUTER

MARKET HAS BECOME MORE COMPLEX IN THE PAST THREE
YEARS

An important consideration in the comparative evaluation of the
G-15 is the environment in which it must compete. A number of signifi-
cant changes have occurred since the design and introduction of this
computer that have an important bearing on its current and future market
potential. A few of the more important of these changes are discussed in
the following points.

(1) Data Processing Needs as Applied to Small Computers
Have Expanded

The smiall computer was initially most successful in engi-
neering-scientific applications because of the pressure on technical
centers for increased productivity with little or no increase in pro-
fessional personnel. In addition, as pointed out in our 1957-1958
report, the economic motivation to use computers is greater in
the scientific area than in business data processing, because of
the basic labor rate differentials between technical personnel and
clerks. As a result, organizations with a requirement for small
E&S computers have been quick to recognize the need and obtain
the necessary equipment.

In the meantime, two other developments have been taking
place. The small E&S computer user has begun to branch out



5225



APPENDIX C (5)

in his applications, handling payroll, inventory control, and
other typical business data processing problems in conjunction
with his technical work. Whereas the computer was initially
selected on the basis of its capabilities in the engineering-
scientific area, increased dual utilization adds a requirement
for the input -output and other features of the data processor.

Similarly, smaller companies have begun to look to small
computers as a possible answer to their spiraling paper work
loads and clerical labor costs. Thus, whereas three years ago,
the scientific computer offered the greatest single market oppor-
tunity, recent shifts in consumer requirements indicate that a
small computer with capabilities in both application areas offers
the greatest opportunity. If only one capability can be provided
in this class of machine, it would appear that it should be data
processing, in order to tap the larger market.



(2) Modular Design and System Expansibility Have Become
More Important



The trend in the computer industry is definitely to modular
design and construction techniques. This has become apparent
in all three equipment price classes and both application areas.
The motivation to move in this direction stems from two sources:
the widely varying needs of each individual computer user and the
desire on the part of the manufacturer to be able to tailor his



6226



APPENDIX C (6)

equipment to as large a number of potential users as possible.
There is no doubt that a number of G-15 "sales" have been lost
that would have been made, if memory could be doubled through
the addition of a module or input-output speeds doubled through
the attachment of a slightly higher cost accessory. Bendix has
recognized this trend and the requirement to satisfy it is reflected
in the system expansibility that has been designed into the G-25
and G-20 systems.

(3) Transistorized Equipment Has Come on the Market

Probably the most significant event to occur since the intro-
duction of the G-15 has been the recent shift from vacuum tubes
to transistors and diodes, and rotating drum memories to ferrite
cores. This change in components has permitted some far-reaching
design changes that have a significant impact upon the speed and
capabilities of the newer equipment.

In general, the newer, solid state computers have several
distinct advantages from the operational and marketing viewpoints,
as compared to earlier equipment. Some of these advantages are:



1 . Solid state machines are more compact, use less electrical
power, and require less cooling.

2. Solid state machines are somewhat more reliable. (Over-all
reliability is increased only slightly, since mechanical
input-output equipment remains the most important factor

in over-all system reliability. )



5227



APPENDIX C (7)



3. Solid state machines use newer and more glamorous
components, thereby giving them a strong psychological
appeal.

4. Solid state machines that utilize core and acoustic delay
line memories have no mechanical motion internally.

5. Solid state machines with magnetic core memories per-
mit much faster access and faster internal computation.



The major advantages of the older vacuum tube machines
are:

1. They are cheaper for an equivalent number of components.

2. They have full complements of programming aids which
have been refined and perfected through the years.

3. The older machines have largely been "debugged" through
actual operating experience - the new user is not leasing
unproven and untried equipment.



Examination of the relative advantages of the two types or
generations of equipment quickly shows that most of the advantages
of the solid state machines are of a more enduring nature than are
the advantages of the older machines. As the newer machines take
their place in the market, program libraries will be developed and
systems faults corrected. As this occurs, the current advantages
of the vacuum tube machines will largely disappear.

The sole advantage remaining to the older equipment will lie
in lower unit manufacturing costs. Since this cost represents only
about 2 5% of the total purchase price of the equipment, it is con-
sidered unlikely that this will have much effect.



5228



APPENDIX C (8)

Thus, the only source of sales for the G-15 and its
counterpart equipment lies in those instances where they offer
greater capacity than an equivalent second generation machine
for less cost. Though it is virtually impossible to appraise the
suitability and economics of any given machine against the almost
infinite variety of user requirements, the following discussion
should assist in determining the relative position of the G-15
with respect to its current competition.



3. A COMPARISON OF THE FEATURES AND CAPABILITIES OF
AVAILABLE EQUIPMENT INDICATES THAT THE G-15 IS NO
LONGER OUTSTANDING IN ITS PRICE CLASS



Exhibits C-I, C-II, and C-III of this appendix present the major
features and characteristics of small scale general purpose digital com-
puters. From these characteristics, an impression of the computers'
organization, capacities, and capabilities can be obtained. However,
as pointed out earlier, final equipment selection seldom hinges on a
single capability or characteristic. Rather, selection is usually made
on the basis of what might be termed a weighted average of the various
features and capabilities of each unit - the weighting being established
by the nature of the prospective user's problems.

However, some general idea of the G-15's current competitive
position can be obtained from a generalized comparison of its features
with those being offered in competitive products.



5229



APPENDIX C (9)

Exhibit C-l, following this page, reflects the general characteris-
tics of the available small scale general purpose computers. The units
have been listed from top to bottom in order of ascending monthly rental.
The following explanations apply to each of the column headings:



Approximate Monthly Rental -

The prices listed are for typical useful systems. Often,
features optional on some systems are part of the basic
computer in other systems; therefore, the prices listed
must be considered to be approximate estimates of relative
costs. When a price range is provided, the lower price is
for a basic system without magnetic tapes. The higher price
indicates a complete system with magnetic tapes.

Application Orientation -

The listed classifications - "E&.S" (engineering and scientific),
"ADP" (automatic or business data processing) or "DUAL"
(indicating an equivalent capability in both areas) - reflect the
design and marketing orientation of the machine. However,
this does not mean that certain units are not or cannot be used
in other areas of application.

Conriponents -

"S/S" indicates a second generation machine that utilizes tran-
sistors, diodes, and other "exotic" components. VT indicates
a vacuum tube machine.

Modular Expansibility -

A "high" indicates that a large variety of components and peri-
pheral equipment is available that can greatly increase the
capacities and capabilities of the basic machine.

High-Speed Computer Compatibility -

When another machine of the same manufacturer is listed, it
means that the larger, faster computer can accept programs
written for the small one or that the two machines can directly
communicate with each other.



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5231



APPENDIX C (10)

Examination of Exhibit C-I readily shows that a considerable
amount of new G-15 competition has entered the market within the
past two years. Essentially, the machines in this category are all
solid state devices, eight of which are oriented to the scientific appli-
cation area.



(1) Several of the New Machines Are Superior to the G-15
with Respect to Internal Characteristics



Exhibit C-II, following this page, lists the principal
internal characteristics of the available computers. The
following notes apply to the column headings shown:



Storage Capacity -

Number of words of addressable internal storage available.

Average Access Time -

Storage cycle time to complete one read or write of a word

in millionths (U) or thousandths (M) of a second.

Word Size and Internal Notation -

The word size is the smallest group handled as an addressable
unit. Internal notation indicates the manner in which informa-
tion is handled within the machines.

Arithmetic Operations Available -

A "3" indicates that addition-subtraction, multiplication, and
division are performed by circuitry. A "2" indicates that
addition-subtraction and multiplication are performed by
circuitry. A "1" indicates that only addition-subtraction is
performed by circuitry. When arithmetic operations are not
performed by circuitry, they have to be programmed.



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5233



APPENDIX C (11)



Internal Speed -

Relative comparison based on arithmetic operations performed
on normal length numbers. "Fast" speed indicates an add time
of less than 100 microseconds; "medium" speed indicates an
add time, in range from 100 to 1, 000 microseconds; "slow"
speeds indicate an add time greater than 1, 000 microseconds.
An add time is the time required to acquire and execute one
add instruction.

Floating Point Arithmetic -

A "yes" means that floating point arithmetic is performed by
circuitry rather than programming. When the operation is
performed by programming, it is both more time-consuming
and more nnemory-consuming.



Examination of the "access time" and "internal speed"
columns readily shows the advantages offered by the newer
solid state, core memory machines. These higher speeds
result in significant increases in the computational capacity
of the newer units - without a significant increase in price.
Some of these increases are in the order of 10 to 1 over the
G-15 and similar vacuum tube equipment.

(2) A Number of Computers Have Come on the Market That
Offer Faster Peripheral Equipment than the G-15

Exhibit C-III, following this page, lists the peripheral
equipment that is available to support the various computers
evaluated in this appendix. The speeds that have been under-
lined are those that are equal to or faster than those offered
with the Bendix G-15. Generally speaking, the higher speed
peripheral equipment is associated with slightly more expensive
computers.



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5235



APPENDIX C (12)



However, it is quite possible that future improvements or
equipment additions will result in stronger competition from
some of the lower priced units that have the capability of
handling higher speed input -output but as yet do not have the
required accessories.

As an aid in the interpretation of this exhibit, the follow-
ing notes apply:



Magnetic Tape Transfer Rate -

The number of characters (six binary digits) per second

transferred between magnetic tapes and computer.

Magnetic Tape Buffering -

Indicates the operations that can be performed simultaneously
with magnetic tape operations. "RC" indicates reading and
computing; "WC" indicates writing and computing; "RWC"
indicates reading, writing, and computing.

Console Typewriter -

"I" indicates that one is available for input. "O" indicates that

same one is available for output.



4. IN SUMMARY, THE MARKET LIFE OF THE G-15 MAY BE
EXPECTED TO DECREASE RAPIDLY IN THE FACE OF
COMPETITION FROM THE NEW SOLID STATE COMPUTERS



The introduction of the new solid state, modular computers such
as the IBM 1620, Royal Precision 4000, Packard-Bell 250, and Digital
Equipment Corporation's PDP-1 will greatly increase the competition
for new installations and add to the pressure from technological and
economic obsolescence on the already-installed G-15's. Little can



5236



APPENDIX C (13)

be done to the unit as it stands to prevent this situation from becoming
progressively worse. Stopgap improvements, though possibly of short-
term benefit, are limited in scope and significance by the basic design
of the present machine. Thus, it would appear that the only means
available to Bendix to protect its present position in the small computer
market is through the development and introduction of a small scale
machine with capabilities equal to or superior to the second generation
equipment being offered by competition.



We have not attempted to conduct a detailed, model -by-model
comparative evaluation of the G-15 in this appendix. It was felt that
this has been adequately done by the technical information section of
the Bendix marketing department. The comments presented here are
merely intended to put the present situation with regard to the G-15 in
its proper perspective. We feel that the changes in the needs of users
and the equipment available to them are of sufficient magnitude to make
it evident that Bendix must have a comparable second generation com-
puter to remain fully competitive.



5237

APPENDIX D

APPENDIX D (1)
COMPARATIVE TECHNICAL EVALUATION
OF THE BENDIX G-20 COMPUTER

This appendix presents a relatively detailed hardware evaluation
of the G-20 computer system as compared to systems currently on the
market. The analytical method employed in this phase of our study
effort is very similar to that used by the more sophisticated computer
users. This method and the results presented in this appendix do not
take into consideration other factors that may affect a prospect's ulti-
mate system selection. Some of the more important of these "nonhard-
ware related" decision elements are:



The strength and effectiveness of the manufacturer's sales
and service organization.

The availability of required programs, programming aids,
and training material.

Rental or purchase inducements such as price discounting,
free program conversion, two- shift operation on a one -shift
rental basis, etc.

The over- all image of the manufacturer for quality products,
on-time delivery, and acceptable after- sale support.



Each of these considerations will affect the final selection of equipment
by a specific prospect - the weighting of each factor varying from company
to company. Since these are qualitative, rather than quantitative, decision
elements, they have not been included in this portion of our analysis.



5238



APPENDIX D (2)

The study upon which this appendix is based was a joint effort
between our professional staff and a special "task force" of the Bendix
computer division. Since all of the detailed supporting data remained
with the Bendix group, the following discussion is limited to the high-
lights of our findings.

1. THE G-20 COMPETES DIRECTLY OR INDIRECTLY WITH 14
DIFFERENT COMPUTERS

The price range of a typical G-20 system extends from approxi-
mately $15,000 to $40,000 per month. Within this range, there are 12

modern, solid state digital computer systems:

Tj ,_ ,- : v /: -2 3 I. G

Manufacturer Model

General Electric GE 210 - -

Remington Rand UNIVAC m '7'' - ~' '

Radio Corporation of America RCA 501 98' '

International Business Machines IBM 7070 ir' '"' ' '

International Business Machines IBM 7074
Minneapolis -Honeywell ■ H-800 6-'^-''

Control Data Corporation CDC 1604 6.3

Philco 2000 (210) i=?

Radio Corporation of America RCA 601 5"

Philco 2000(211)

International Business Machines IBM 7080 "^ '

International Business Machines IBM 7090 ^i n

In addition, there are two older vacuum tube-type machines that are
competing to a limited extent as new equipment, but poae a significant
threat as used computers at discounted prices. These are the:

International Business Machines IBM 704

International Business Machines IBM 709



5239



.^ a xia^^aq^A appendix d (s)

The primary strength of these latter two units lies in their proven per-
formance and extensive program libraries. These "pluses, " augmented
by a 70% and 80% discount respectively, permit them, under certain
conditions, to compete on a relatively favorable basis with the newer
units listed earlier.



2. SEVERAL ADDITIONAL MACHINES SHOULD BE EVALUATED

AS SOON AS DATA BECOME AVAILABLE ~



Two new computers which were recently announced - the Remington
Rand Univac 1107 and Sylvania 9400 - have not been included in this analy-
sis because of the unavailability of adequate information pertaining to their
characteristics, capabilities, and prices.

In addition, there are several rumors concerning new machines
that may be announced in the very near future. The manufacturers
concerned are:



Philco

Control Data Corporation

Burroughs



It is understood that these units will fall in the area that is competitive
to the G-20. However, no additional data are available at this time.
When information becomes available, the recently completed competitive
hardware analysis should be updated accordingly.



5240



APPENDIX D (4)



THE RELATIVE MERITS OF COMPETITIVE COMPUTER
SYSTEMS CAN BE MEASURED IN TERMS OF POWER OR
CAPACITY AND EFFICIENCY OR WORK PERFORMED PER
DOLLAR EXPENDED



The best measure of a particular electronic computer's capabili-
ties is how well it performs in accomplishing the normal work load of
the user. Obviously, this ideal is not possible, for each user's require-
ments vary and the opportunity to compare the efficiency of two or more
computer systemis under the same work load seldom occurs.

Therefore, in order to measure the relative m.erits of the com-
petitive units and the G-20, each machine has been evaluated on its
ability to solve various "typical" problems. In this instance, routines
or types of operations that are common to a variety of scientific and
business problems have been selected for study. Each of the computers
under consideration has been programmed and the time to complete the
required operation calculated on a "solution per unit of time" and
"solutions per dollar" basis. These two measures reflect the com-
parative power or capacity of each unit and their relative efficiency
in terms of work performed for each dollar of rental.

(1) A Standard Machine Configuration Was Established

In order to compare the various units on bases as nearly
equivalent as possible, a standard machine configuration was
selected. Each of the systems was assumed to consist of:



5241



APPENDIX D (5)



Arithmetic unit with floating point hardware.

16,384 words or approximately 64,000 characters
of storage.

Control console with typewriter.

Control buffer or sim.ilar unit.

Eight high-speed magnetic tape units.

On-line card reader.

On-line card punch.

On-line high-speed printer.



The rental values used in the remainder of this analysis are the
sums of the manufacturer's' list prices for each of the items shown.
Both list and discounted prices have been used in the case of the
IBM 704 and IBM 709, inasmuch as these systems are being
marketed in this manner.



(2) The Operations Performed by a Computer System Were
Examined To Determine Their Importance in Each
Application Area



The two major tasks associated with all computing and data
processing problems are input-output and internal operations.
Most of the newer systems are buffered so that these operations
can be performed simultaneously. The one situation that places
a strain on input-output and internal operations occurs in data



5242



APPENDIX D (6)

sorting and file updating problems. These tasks have been con-
sidered separately in order to obtain an indication of each system's
capabilities when used for this purpose.

In addition to buffering, several of the newer systems possess
the ability to solve several problems simultaneously on an interrupt
basis. This ability is provided in the Bendix G-20 by the control
buffer and communication lines. It has not been considered in this
study, because the full significance of this development has not been
established under nornnal operating conditions.

The internal operations that are performed in a modern com-
puter can be divided into four main categories:



Arithmetic operations -time spent by the arithmetic unit in doing
useful and necessary arithmetic.



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 35 of 140)