International Business Machines Corp. is expected to unveil its long-awaited office computer communications network today in a move that could create a new industry standard and rekindle the company's lagging personal computer sales.
The announcement of the office network "should start to clear the air as to their direction," said Frederick D. Ziegel, a telelcommunications analyst with Salomon Bros., "To the extent that happens, one should see a lot more activity in the whole area of local-area networks -- not that business has been bad, but some potential customers have been on the sidelines pending the IBM announcment."
Last year, IBM disappointed many in both the technical and financial communities when it announced just one component of the system, the cabling system on which the new network is based. Essentially, IBM is now expected to reveal the rest of the package that will link personal computers, peripherals and mainframe computers into networks that are comparable to telephone networks -- except they carry data communications instead of voice. Such networks would enable users to hold computer conferences to compare notes, files and spreadsheet calculations; exchange information, and easily retrieve information stored in an organization's central computer.
These local area networks are considered an indispensable part of the future of office automation. Currently, most personal computers are "standalone" devices that cannot interact with nearby personal computers or link to larger computers to retrieve or exchange information.
Indeed, many analysts blame much of the recent slump in computer and personal computer sales to the inability of the machines to communicate with each other, which analysts contend makes them less productive and effective than they could be.
Consequently, local-area networks are expected to be one of the fastest-growing segments of the personal computer and office automation markets. A Sanford C. Bernstein report estimates that worldwide sales of such networks will soar from $400 million last year to nearly $5 billion a year by the turn of the decade. Similarly, the number of offices with installed networks should climb from roughly 6,500 currently to nearly 60,000 over the same period.
American Telephone & Telegraph Co., Xerox Corp., Digital Equipment Corp. and other leading computer and communications companies are active competitors in the fledgling local-area-network market.
However, IBM's new network technology is expected to be radically different and incompatible with most existing local-area-network technologies now offered.
The company will offer a network technology based on "tokens" that are analogous to an intelligent letter carrier circulating through the network, travelling at high speeds, checking to see if any of the devices in the network want to send a message to another device on the network. The token picks up messages en route and drops them off at the appropriate stop.
This contrasts sharply with other local-area network approaches. Notably, the Ethernet network -- developed six years ago by Digital Equipment Corp., Xerox Corp. and Intel Co. -- relies on a "bus" structure where devices send specific messages to each other over the network's lines. The problem with the bus approach, however, is that numerous devices on a single network could mean too much message traffic. Under those circumstances, messages will collide and cancel each other out, which wouldn't happen in the more controlled IBM system. Collisions slow down the network's speed. Consequently, special "collision control" software has to be used to assure that messages are appropriately sent and received.
While the token approach doesn't have that problem, analysts assert that costs of the token network can be as much as three to five times more than the bus approach. However, the technology and IBM's marketing clout should assure the world's largest computer company of a significant local-area network market share, according to Salomon's Ziegel and other analysts.
Indeed, one area of rising interest will be companies that provide network bridges between IBM's token approach and the Ethernet and AT&T Starlan local-area network technologies.
"IBM's costs are at least two to three times what the current local-area network market is," said Randall Sherman, vice president of telecommunications and office automation research at Creative Strategies.