IBM Enhances RT, Unveils Software In Effort to Bolster Two Weak Areas

By Paul B. Carroll, Staff Reporter
The Wall Street Journal

February 18, 1987

New York -- International Business Machines Corp. announced enhancements that should substantially improve the performance of its lackluster workstation, the RT personal computer.

IBM also announced new software that will make it easier to use PCs connected to some of its midsized computers. The move underscores IBM's continuing concern about its midrange systems and the feeling that it must convince customers that it will respond to their concerns. Still, analysts feel it did little to address the problem.

The computer giant said its three RT models will run two to eight times faster than the current models because of faster central processors, memory that is more densely packed and various other improvements. IBM also improved the RT's graphics and increased its ability to work in a network with non-IBM products. Prices remained basically the same.

"We think this is the product they should have announced in the first place," says David Burdick, an analyst at Dataquest Inc. "We think this is going to place significant competitive pressure on Apollo, Sun and Digital Equipment," despite their continuing moves to upgrade their product lines.

Most of the enhanced RTs will become available in mid-May. It will, however, probably take longer for any sales gains to start showing up, because there is relatively little application software available for the RT, and it will take time for software companies to make their products usable on the RT.

Mr. Burdick says IBM's product, announced in early 1986, captured just 5% of the $1.5 billion workstation market last year, compared with 26% for Apollo Computer Inc., 23% for Sun Microsystems Inc. and 10% for Digital Equipment Corp. Though that is a small market compared with IBM's others, it is growing much more rapidly than most -- Dataquest predicts the market will grow to $2.2 billion this year and $4.5 billion by 1990. Workstations generally are high-powered personal computers used mainly for design and engineering.

In announcing the new software, IBM said that for midrange computers it took some of the major types of application software that businesses run on PCs connected to the larger computers and put them into a single package. That is designed to make it easier to move from one application to another and, in the industry vernacular, convince customers that IBM is selling solutions, not boxes.

But Amy Wohl, a consultant in Bala-Cynwyd, Pa., characterizes the IBM announcement as "a lot of noise about not very much." She adds, "Despite IBM's continued statement that it has good office software, I don't believe them and the users don't believe them." Different application software is still required for all the different operating systems used by IBM's various midrange computers and mainframes, and Ms. Wohl says it is still too difficult for a business to move from one type of machine to another.

IBM said one of its new software packages, for the System 36, will be available in April. The other, for the 4300 and the new 9370, will be available in August. Larry Ford, assistant group executive of marketing and support, said IBM will develop similar products for other of its midrange computers.

Mr. Ford said IBM is discontinuing its 4361 midrange computer because the new 9370 is getting closer to shipment. Mr. Ford said "we're way ahead of schedule" on the 9370, which is slated to start shipping in volume late this year. The 9370 is strategically important because it marks an attempt by IBM to provide some order to its profusion of computer architectures and operating systems, and to make it easier for customers to move from one type of computer to a larger one.

In composite trading on the New York Stock Exchange yesterday, IBM shares closed at $138.375, up $3.875.