New Rival for Personal Computer

Business Technology

New Rival for Personal Computer

By John Markoff
The New York Times

January 3, 1990

The personal computer, which has dominated the computer industry since the early 1980's, has a new competitor that could someday take away a significant share of the office market.

The new machine, known as an X terminal, represents a surprising step back to a time when office computing was dominated by a central mainframe or minicomputer, some computer designers suggest. In recent years, personal computers have swept through Corporate America and many people in the industry have said such decentralization will be the way of the future.

Unlike the personal computer, the X terminal does not do actual computing; it is part of a computer network and the computing is done by a separate, central computer. But like the personal computer, the X terminal allows a user to display multiple ''windows,'' each containing a program, and is controlled with a mouse pointing device. Also, it enables the display of sophisticated graphics like pie charts and photographic images. The typical office terminal running off a central computer does not have such versatility.

Large Companies Moving In

Until now X terminals have been manufactured principally by several small start-up companies. But that will change this year. The two largest computer makers, the International Business Machines Corporation and the Digital Equipment Corporation, are expected to introduce their own X terminal products, probably within two months. Wall Street analysts said those companies could register overall revenue gains despite the loss in sales of some personal computers and work stations.

But other personal computer makers, including Apple Computer Inc. and the Compaq Computer Corporation, could be losers if the X terminal market grows rapidly, the analysts suggested. On the other hand, companies that make the fastest work stations, off of which the X terminals can run, have been working closely with X terminal makers in an attempt to steal sales from personal computer companies. The work station manufacturers include Sun Microsystems Inc. and the MIPS Computer Company.

The X terminals have been made possible by a new style of computing known as network computing. That trend, which distributes computing power rather than centralizing it in a large computer, is now the fastest-growing part of the computer business, industry analysts say.

The new devices could catch on because they cost far less than advanced personal computers and because they can be controlled from a central location, eliminating the need to manage each individually. The machines are cheaper because they have no electromechanical parts like disk drives and because they require less computing power. A typical X terminal will cost about $2,500, while an advanced personal computer with the same capabilities, like an I.B.M. PS/2 Model 70, might cost $5,000 or more.

Another big selling point of X terminals is that by centralizing computing, they make stealing data harder than from unsecured personal computers and reduce the threat that malicious programs, which destroy data, might be introduced. ''One of the big advantages over PC work groups is that you have centralized administration,'' said Judy Estrin, executive vice president and a co-founder of Network Computing Devices Inc., a Mountain View, Calif., start-up company that is the leading manufacturer of X terminals.

Problems, Too

But X terminals are not universally praised. Critics say the new machines are subject to the same kind of problems that have plagued computing in which a large central computer is host to dozens and perhaps hundreds of standard terminals. Among those problems are the inability to easily customize the computer with personally chosen software, and a slowdown in response time when many people are using the system.

The machines have also been criticized for lacking the refinements of some personal computers and work stations that make it easier to create advanced graphics. Both Steven P. Jobs, president of Next Inc., and William Joy, a co-founder of Sun Microsystems, have argued that the software on which the X terminals run lacks many of the powerful graphical capabilities of Display Postscript, a powerful computer graphics language developed by Adobe Systems.

But some Wall Street analysts argue that having the centralized control that is seen as a drawback by some will be greeted eagerly by corporate data processing managers who have lost power and control over office computing because of the widespread use of personal computers. These managers control purchasing in large corporations, and that could help the market for X terminals.

Evolutionary Step Seen

While some analysts think that sales of X terminals could hurt personal computer sales, others say the X terminal is simply another step in the evolution to network computing and will be just one in a large mix of computers, each designed for a different purpose.

''Some have suggested that it represents a return to the mini-computing style versus the personal computing style,'' said Mark Stahlman, an analyst at Alex. Brown & Sons. ''That's overstated. The mini-computing style is not coming back in any major way.''

How quickly the market for X terminals will grow is a matter of dispute. Dataquest, a San Jose, Calif., research firm, projects that the market will surge to $952 million in 1993 from $49 million in 1989. But the International Data Corporation, based in Framingham, Mass., expects far less growth - to $320 million from $25 million over the same period. The United States market for personal computers came to about $28 billion in 1988, but growth has slowed and some analysts think that X terminals will hurt PC manufacturers by stealing sales of their most sophisticated and lucrative machines.

X terminals have been made possible by the widespread adoption of a software standard, known as X Windows, that was developed at the Massachusetts Institute of Technology with financing from I.B.M. and Digital. As part of a research effort called Project Athena, M.I.T. researchers created a program that can be run on one computer while its output is displayed on another, and which also allows various applications from a variety of computers in the network to be viewed in different windows on the screen at the same time.

Such a design can be useful when a user wants to run a program that requires immense computing resources on a supercomputer and view the output on a desktop computer. X Windows is also useful for word-processing applications that display text just as it would appear on paper. These programs require relatively little power for computation but more to control the screen display.

In short, an X terminal could be used in a network of computers where some users did not need the full power of a desktop computer but wanted the ease of use of windows and a mouse.

Strong growth of the market awaits the arrival of commercial software to take advantage of the X standard. ''What's holding X terminals back is the lack of software,'' said Steve Kirsch, vice president of Frame Technology, a San Jose, Calif., software publisher that is one of the first companies to design software to run on X terminals. ''People are rapidly converting their software to run on X. When that happens it will mean that you can put together a station with work-station performance for a fraction of the cost.''

Color Display Planned

Network Computing Devices, the leading maker of X terminals, offers two models of monochrome X terminals priced as low as $2,500 and is planning to introduce a color display early this year. The company sold 7,000 terminals in 1989.

The least expensive X terminal, selling for $995, is made by Acer Technologies, in San Jose, Calif. It has a smaller screen and less processing power than the Network Computing models.

Digital Equipment executives said they think X terminals will benefit sales significantly. Currently some Digital computers run on one operating system and others on another. With an X terminal it will be possible for a user attached to a network of computers running both operating systems to display programs from each simultaneously.

Industry executives close to I.B.M. said the company would announce an inexpensive X terminal, code-named Neches, from the name of a Texas river, when it introduces its new line of computer work stations. That announcement is expected on Feb. 15, they said.

An Inexpensive Rival in the Desktop Market

A new machine called an X terminal can be used in a network of computers in which some users do not need the full power of a desktop computer but want, at a low price, the ease of using a mouse and ''windows.'' Windows can display graphics, spreadsheets, electronic mail, word processing and other applications. The machine allows various applications from the network of computers to be viewed in different windows on one screen at the same time. The X terminals are also useful to scientists and engineers who want the benefits of a personal computer and also access to the power of a supercomputer in the network, again at a low price.

GRAPHIC: Photo of software called X Windows, developed at the Massachusetts Institute of Technology, which permits the simultaneous display, on either work stations or inexpensive terminals, of multiple programs from different computers in a network. (NYT/Steve Kagan) (pg. D6)