Digital Line of Computers Challenges IBM
Digital Equipment Corp. unveiled a line of powerful computers Tuesday in another challenge to industry leader International Business Machines.
Analysts said the introduction of the VAX 8800 series makes Digital, the world’s second-largest computer company, a competitor with IBM in the mainframe field.
“Digital continues to grow muscles,” said Howard Anderson, managing director of Yankee Group, a Boston-based market research firm. “For IBM, life is getting tougher.”
But Digital stock fell $4 a share to $120.375 in consolidated New York Stock Exchange trading.
Analysts said Digital had been expected to announce new software in conjunction with the new computers. When the company didn’t, analysts lowered their earnings forecasts.
Aggressive Campaign
“We were looking for the queen to come in with her court and we only got the queen,” Anderson said.
The Maynard, Mass.-based Digital has mounted an aggressive campaign to chip away at IBM’s dominance in mid-sized computers and the larger computers known as mainframes.
Digital officials said at a news conference that the new VAX 8800 series delivers up to four times the processing power of the 8700 series and has the ability to carry out several jobs at once.
Cost of the new computers, which are available immediately, ranges from $543,900 to more than $1.7 million.
Analysts said they expect the VAX 8800 Series to offer strong competition for IBM’s 4300 Series and 4381 model.
Competition Heats Up
“It is a clustered system,” said Sonny Monosson, an independent computer analyst in Boston. “It is very capable and will make inroads into the IBM market.”
“What we have seen is that the largest users are assuming there are only two companies acceptable for all applications--IBM and DEC,” said Anderson of Yankee Group. “Two years ago it was only IBM.
“This does intensify the competition,” he added. “Historically what happened is that DEC has great software and underpowered computers. Every time DEC comes out with a high-powered machine, its users, who have been power starved, grab it up.”
