AT&T Launches Its Challenge to IBM With Network and Personal Computer

By John Marcom Jr., Staff Reporter
The Wall Street Journal

June 27, 1984

New York -- American Telephone & Telegraph Co. launched its head-on challenge to International Business Machines Corp. with new products including an office-computer network and an IBM-compatible personal computer.

Analysts said the network could help establish AT&T as a serious competitor to IBM. But, as expected, the new computer, called the Personal Computer 6300, doesn't appear to have as clear-cut an advantage over the IBM product. It is priced roughly equivalent to the IBM PC.

The company also announced general availability of its larger 3B2 and 3B5 computers, which were announced in March, along with a number of software programs to run on those larger machines.

AT&T said the products are part of its "blueprint for the future," which it calls Information Systems Architecture. "We have very consciously built a common framework, within which our product line has evolved," said Charles Marshall, chairman and chief executive officer of AT&T Information Systems.

AT&T said it would advertise its computer products in the coming months under the slogan, "Watson, watch us now." Mr. Marshall said it was a reference to Alexander Graham Bell's first words over a telephone, "Watson come here, I want you." But Robert T. Fertig, a Greenwich, Conn., consultant, suggested AT&T might also be subtly challenging IBM, whose former chairmen include the late Thomas J. Watson Sr. and his son, Thomas J. Watson Jr.

IBM declined comment, citing its policy against discussing competitors.

IBM last month surprised many in the industry by saying its own office-computer network won't be available for two or three years. AT&T said its Information Systems Network will be generally available in January 1985. "It's a significant challenge that AT&T has it ready," said John Murphy, vice president of Advanced Office Concepts, a Bala Cynwyd, Pa., firm that advises companies on computer equipment purchases.

The AT&T network is designed for large customers and can connect more than 1,900 outlets, into which terminals, printers or other devices can be plugged. AT&T said the cost of each "port" connection would be between $400 and $500, using ordinary twisted-pair copper wire that is already in place in many buildings. For higher transmission volumes, AT&T's network can also use optical-fiber cables. AT&T officials said that smaller versions of the network and the ability to connect its network with rival systems such as Xerox Corp.'s Ethernet will be available later. "They are moving in the right direction" toward working with many companies' products, said Charles Robbins, an analyst at International Data Corp., Framingham, Mass.

AT&T intends its PC 6300, which is made for the company by its 25%-owned Italian affiliate, Ing. C. Olivetti & Co., as both a work station to plug into its networks and a stand-alone competitor to IBM's PC. The PC 6300 uses an Intel Corp. 8086 microprocessor, which AT&T said lets it operate as much as 80% faster than IBM's PC, built with Intel's 8088 chip.

AT&T said the machine runs nearly all software that runs on the IBM product, but in addition offers more capacity for expansion and a higher resolution display screen. AT&T's entry-level model, with a dual disk drive and half the memory of IBM's newest entry-level version, lists for $2,745. With the additional memory, the AT&T machine lists for $2,945, the same as a similarly equipped IBM machine.

AT&T is distributing the PC 6300 through its own sales force and through several computer retailers, including ComputerLand Corp. and Sears Business Systems stores operated by Sears, Roebuck & Co. It said the product is available immediately in 250 stores in the U.S. The company doesn't plan to sell the PC 6300 through its own retail Phone Centers.

The PC 6300 doesn't use the Unix software used by other AT&T computers. Instead, it uses PC/DOS and MS/DOS software, the programs used by IBM's PC and compatible models. But the 6300 can be converted to a terminal for one of AT&T's Unix-based larger computers, the company said. AT&T officials hinted that a work station or personal computer running Unix software is likely at a later date. The product could be a work station being developed for AT&T by Convergent Technologies Inc., which AT&T officials said will be introduced later this year.

AT&T also introduced a number of devices to connect its computers to IBM mainframes and terminals. It also announced office software for its 3B5 and 3B2 computers, including a file-management system and accounting programs. Some are versions of popular personal-computer programs, such as Microsoft Corp.'s Word, a word-processing program, and Ashton-Tate Inc.'s dBaseII, a file-management program. The programs will be available at varying dates between July and October, AT&T said.