Getting in Touch with One Another

No one likes an antisocial computer. If a machine cannot communicate with other devices, its owner can be isolated and less effective. Yet the IBM Personal Computer, which has become a desktop standard since its debut in 1981, still cannot be linked in large groups. Result: a virtual epidemic of lonely-terminal syndrome among IBM customers, who have bought nearly 3 million of PC's four current models. Growing impatient in the past year, PC users have been demanding a way to connect the machines. IBM responded in 1984 with a system for linking a few PCs, but business users clamored for a way to hook up hundreds of computers. Last week the company finally unveiled a so-called local-area network that can link as many as 260 devices, including its PCs and printers and other IBM-compatible models. Said Steven Milunovich, who follows the business for New York City's First Boston investment firm: "This is a big step forward for the computer industry. It removes a great deal of uncertainty."

IBM's answer is a token-ring network, named for electronic signals called tokens that race constantly through the system. IBM compares the token to a tape recorder being passed around a giant conference table. Users leave a message on the token and send it along to the person to whom the information is addressed. To connect with IBM's system, users need special software and an extra circuit board that goes into the machine.

IBM's chief rival is Ethernet, a system first devised eleven years ago by Xerox and adopted by such companies as Digital Equipment and Intel. Ethernet already has 30,000 users and costs only about $500 per connection, compared with the $800 that IBM is expected to cost. Another competitor, American Telephone and Telegraph, has introduced three networks of its own.

Even though other systems have been available, IBM is so dominant in computers that many potential customers delayed making decisions on new equipment until they saw its network. In fact, many experts think such delays have contributed to the current computer-industry sales slump. Says Skip Bushee, director of research for Silicon Valley's InfoCorp: "Without seeing the standard from IBM, the industry was confused. This should enhance sales for everyone." The market for computer-network gear is expected to zoom from the current $300 million annually to as much as $6 billion by the end of the decade.

Not everyone was satisfied with IBM's new system. Large business users complained last week that IBM has yet to offer a way to connect desktop personal computers with the bigger units used by insurance companies, banks and other service-industry giants. Said Carl Williams, manager of information systems at the Doyle Dane Bernbach advertising agency: "It's the mainframes that do the grunt work that runs the company. By leaving them out, IBM fails to address our requirements." Big Blue promises to deliver that kind of system, but declines to say exactly when.