Sierra Adds Power to I.B.M.

By David E. Sanger
The New York Times

February 13, 1985

The International Business Machines Corporation yesterday introduced its much-anticipated ''Sierra'' generation of mainframe computers, which the company said would nearly double the capabilities of its most powerful computers.

Industry analysts and I.B.M.'s competitors predicted that the new computer line, whose first two processors were announced yesterday, would widen the gulf between I.B.M. and the industry's also-rans and tighten its grip on the market for mainframe computers. Among domestic producers, I.B.M. last year shipped more than 76 percent of the computers sold worldwide.

''No American company can match it,'' said Richard Imershein, a vice president of the Gartner Group, a Stamford, Conn., market researcher that follows I.B.M. closely. ''Everyone's eyes are now on Japan,'' he added - particularly on Hitachi and Fujitsu, the Japanese giants seeking to challenge I.B.M. in its bread-and- butter market, the mainframes.

I.B.M. Advances

The new line uses I.B.M.-developed advances in memory and logic chips to achieve higher processing speeds at significantly lower costs. The basic version will initially be capable of executing about 28 million instructions per second, or mips, and will sell for $5 million when it becomes available in November. Upgrading that machine to the more sophisticated version, capable of 40 million instructions per second, will cost an additional $4.3 million. Experts said even higher speeds could be attained for specialized scientific calculations.

The prices were described by most users and industry consultants as impressive, a significant savings over the most powerful machines now available. But at the same time, I.B.M.'s biggest customers and industry analysts said they were a bit disappointed, and that I.B.M. could have done better.

They noted, for example, that the entry-level version, called the 3090/ Model 200, appeared only marginally more powerful than I.B.M.'s current top-of-the-line, its Model 3084QX.

To I.B.M.'s credit, they said, the new, more sophisticated Model 400 of the Sierra line will have four central processors that, working together, will double the pace of the 3084QX. But, in perhaps the most surprising part of yesterday's announcement, I.B.M. said the Model 400 will not be available until the second quarter of 1987 - two years later than most analysts had expected.

''It's a very unusual delay,'' said Jack Hart, an analyst for the International Data Corporation, a Framingham, Mass., market researcher, noting that lead times of six months or a year are now the industry norm. ''It sounds like the technology isn't all there yet.''

Slow Introductions

An executive at one of the nation's largest aerospace companies, which is a heavy user of I.B.M. equipment, speculated that I.B.M. would introduce improvements in the machines at a very deliberate pace. ''They have the world knocked, so the improvements will leak out slowly,'' he predicted. ''I.B.M. very much wants to keep this in control.''

But Jack D. Kuehler, who heads I.B.M.'s information and systems group - which develops its biggest machines - replied yesterday that the new Model 400 ''is alive and well and running in Poughkeepsie,'' where I.B.M. has its largest mainframe manufacturing plant. He said the company was simply putting its first efforts into producing the basic Model 200 in volume, ''and then we will apply more resources to the 400.''

He added: ''We just want to show customers what to expect. They need to know.'' Mainframes are purchased by the world's largest corporations, and keep track of banks' financial transactions, airline reservations and complex production data.

The product delivery dates led some financial analysts to say they would re-examine their earnings estimates for I.B.M. through 1986. Most expect I.B.M. to deliver only a few hundred of the entry-level Sierra models this year and begin volume shipments of several thousand in 1986. On the New York Stock Exchange yesterday, I.B.M. dropped $1.75, to $131.75, but analysts guessed the drop was due largely to the company's statement after the market closed Monday that it would be ''very difficult'' to post an earnings gain in the first quarter of 1985 over the same quarter a year ago.

Prices Lowered

In a related announcement yesterday, I.B.M. also said that it was dropping the price of its current top-of-the- line mainframes by 5 percent, apparently to spur demand. Maintenance charges, one of the biggest expenses for major customers, were lowered by 10.2 to 12.5 percent.

And in an important move into the academic and scientific marketplaces, where I.B.M. has not fared well, the company said it would make available the popular Unix operating system on a range of machines, particularly the 4300 series, one of its smaller mainframes. That is expected to pose a particular challenge to the Digital Equipment Corporation, whose Unix-based computers dominate in university laboratories. Previously Unix, which was developed by Bell Laboratories, would not run on I.B.M. mainframes, meaning that universities seeking to invest in I.B.M. equipment had to spend millions on new software.

There was also evidence yesterday of I.B.M. plans to enter those markets with its biggest machines. Experts said that the new Sierra architecture contains the means to create a machine with supercomputer capabilities, meaning that I.B.M. could use it as a stepping stone to the one major computer market where it is not a participant. Making optimal use of its four processors, the Model 400 should be able to perform some scientific applications at upwards of 80 mips.

A Turning Point

The entry of Sierra, once a code name for the project, comes at a turning point for the mainframe industry. The major American competitors that fought I.B.M. in the early days of computing - companies like Burroughs, Sperry, Honeywell, NCR and Control Data - have failed to lift their market shares against I.B.M., and recently have raced to turn to specialty markets, such as factory automation and banking.

Privately, most have confessed they could not keep up with I.B.M.'s remarkable progress in designing machines with raw computer power. They have been stymied by both the design of the advanced computer systems, and by the complex semiconductor technology that makes those designs possible.

''When I.B.M. took the gloves off in 1980, they got a virtual monopoly of the large systems business,'' Edson W. Spencer, the chairman and chief executive of Honeywell Inc., said yesterday. ''We will have an answer to Sierra, but it will be an NEC machine,'' he said, referring to the large Japanese computer maker that has sold its wares through Honeywell. ''Without a partnership with Japan, it is just too expensive to keep up.''

The two makers of I.B.M.-compatible mainframes, the Amdahl Corporation and the National Advanced Systems division of National Semiconductor, also have Japanese partners. Yesterday they expressed confidence that the shipment delay for I.B.M.'s more sophisticated model would give them more time to match the introduction.

''We have been planning along these lines for some time,'' said John P. Taffinder, director of worldwide systems marketing for N.A.S. ''This makes life easier.''

But analysts said there is no doubt I.B.M. had again pulled away from Japanese competitors like Hitachi - which supplies N.A.S. Two years ago Hitachi was caught trying to steal some of the computer giant's plans for future products, a move considered by many to be a sign of how desperate some competitors are to catch up with I.B.M. technology.

Fifth Generation

Historically, the Sierra machine introduced yesterday marks the fifth generation of a remarkably successful series of computers I.B.M. first introduced 21 years ago with the System/360. That machine set a standard for the industry, because it allowed users to upgrade to more sophisticated models without making obsolete their investment in software.

Nearly every year, the company has increased the price performance of those machines - often by as much as 20 percent annually. Last year, for example, it cost about 7 cents and took only 1 second to perform a set of basic data processing operations that in 1960 cost $2.48 and took 47 seconds to complete.

Architecturally, the new Sierra machines are quite similar to the existing 308X line, the company said. But they incorporate two key new elements of technology: one in the memory, another in the processor.

The new computer is the first to use I.B.M.'s new 288K chips, capable of storing 288,000 bits of information. I.B.M. said yesterday it is now producing the chips in volume in its Essex Junction, Vt., semiconductor plant, and in West Germany. The Model 200 will come with 64 megabytes of memory; the Model 400 with 128 megabytes, expandable to 192 megabytes.

The second advance concerns the logic chips, stored in a highly advanced I.B.M.-designed package called a thermal conduction module. In the 308X line, that module contains what are known in the industry as TTL chips - or transistor-to-transistor logic - that turn on and off the spurts of electric current that represent a ''1'' or a ''0,'' the language that digital computers use to represent characters and numbers.

The new machine uses another technology, called emitter-coupled logic, or ecl, in which a constant current is varied to represent a ''0'' or a ''1.'' The technology creates more heat - which the thermal conduction module is designed to dissipate - but runs at higher speeds, allowing the 3090 models to outperform their predecessors.

But some parts of the Model 400 technology may still be a bit elusive for I.B.M.'s Poughkeepsie engineers.

''No one has built a general-purpose, 40-mip machine yet that works just the way they want it,'' said Mr. Hart of International Data. ''Trilogy couldn't do it, Amdahl couldn't do it, Hitachi couldn't do it.''

The problem, he said, is in coordinating the four processors so that they could share vast amounts of data without getting in each other's way.

However, Mr. Kuehler, pleased to finally have the Sierra series announced, was not dwelling on technical problems yesterday. ''We have a new member of the family,'' he smiled.

GRAPHIC: photo of Jack Kuehler (page D4); chart of 1984 worldwide shipments for I.B.M. and its competitors (page D4); photo of silicon wafers that hold memory chips