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Show MM: MINICOMPUTER NETWORKS COMING ON STRONG The accelerating need for smaller, less expensive, and interactive computer com-puter date processing via remote communication networks is making for an expansion of markets for the manufacturers of minicomputers. Aided by technological advances in semiconductor memories, declining computer equipment costs, new features, and increased software (programming) applications, the mini-makers mini-makers are further positioning themselves to compete in the rapidly developing distributed data processing (DDP) market. Several established and innovative firms have already carved out a long lead, but a new and formidable competitor, com-petitor, IBM, the principal producer of larger-scale computers, has now recognized the outstanding potential for the smaller machines, and introduced in-troduced its own minicomputers with built-in DDP. As a result, the Research Department Depart-ment of Babson's Reports expects the growth of minicomputers to be enlarged - significantly beyond its present parameters. The demand for computers in general is elastic. Information In-formation processing equipment has proven its value in cutting costs and promoting productivity in both manufacturing and office environments. en-vironments. With inflation showing no signs of abating markedly over the next few years, the need for computers, nar-ticularly nar-ticularly minicomputers tied together in networks and plugged into a central main-frame computer, should multiply. IBM's recent entry into this sector should stimulate demand for interactive retributed data computing. MARKET GROWTH TO BE PACED BY SOFTWARE Minicomputers are one of the most dynamic sectors of the computer industry. in-dustry. Shipments of hardward (machines and allied equipment) have increased an average 35 percent annually an-nually over the past 15 years, and growth was uninterrupted through the last two severe recessions of 1970 and 1974. Industry experts look for a sustainable 25 percent to 30 percent rate of gain even in this current economic downturn. With the advent of DDP, minicomputer sales should grow even faster; experts are forecasting that DDP equipment alone should increase in-crease as much as 50 percent annually. Another fast-growing segment of the $30-bi!lion computer industry is software. soft-ware. The trend now unfolding is to "unbundle" or price software separately. Software (programming the computers by means of special language) is expected soon to be the dominant product, with computer hardware destined to become a diminishing source of revenues. IBM is accelerating this trend also in its move into minicomputers. Newer models are now designed to require purchase of additional software in order to fully utilize the machines' capabilities. IBM VERSUS THE ESTABLISHED MINI-MAKERS The traditional producers of minicomputers only are expected to enjoy a short-term comparative advantage ad-vantage while IBM gears up to ship its new minicomputer models sometime in 1980. Currently, there is uncertainty among some IBM customers as to their computer requirements, and they are opting to lease rather than purchase a computer so that they will be free to appraise IBM' coming models of advanced ad-vanced mini-computers. Thus, IBM is experiencing a temporary deferral of income over the near term while the earnings of several minicomputer producers should continue to advance at a greater rate. INVESTMENT ADVICE Several major computers are . regularly supervised by Babson's. These include Burroughs, Control Data, Digital Equipment, Data General, Hewlett-Packard, Honeywell, IBM, NCR, Perkin-Elmer, Prime Computer, Sperry, Texas Instruments, and Wang Laboratories. Of these, the Research Department of Babson's Reports is currently recommending purchase of Burroughs, Digital Equipment, IBM, and Perkin-Elmer. Perkin-Elmer. The rest merit our "hold" advice. Digital and Perkin-Elmer are principally mini-computer manufacturers. manufac-turers. For detailed reports on these two, write to Babson's Ilexrts Inc., Welleslcy Hills, Massachusetts 02181. General Properties will furnish and make available from other sources, water that can be placed in the pipeline system of Vernal or exchanged for water that can be placed in the pipeline of Vernal sufficient to meet the needs of General Properties in excess of 27 connections during such period of periods of short supply. It is further .provided that should the time ever arise that supplemental water will be needed or required, then, and in that event, Vernal shall accept said water in trust for the specific use of General Properitcs and its users. |