Battle Over Mainframe Computers to Heat Up : High Tech: IBM and Digital Equipment are set to unveil top-end models.

Two giants of the computer industry will butt heads Tuesday when IBM and Digital Equipment Corp. introduce new top-end mainframe computers in a growing battle over the $45-billion mainframe market.

Digital’s 9000 computer will be its first entry into mainframe-class computing, while IBM’s addition to its 3090 series and related software is geared to defend its dominant 70% share of the market, analysts said.

“It will be the elephants pushing on each other,” said James Wolpert, an analyst at L. H. Friend & Co.

International Business Machines has long fought off a host of competitors to emerge as the leader of the enormous mainframe market.

Armonk, N.Y.-based IBM generates margins on its machines and software greater than 60%.

“It’s the one major section of the computer market that has higher-than-normal margins,” said Wolpert. “But now there are more battling over a market that isn’t growing as fast.”

The contest has heated up this fall.

Tandem Computers Inc. of Cupertino, Calif., unveiled its Cyclone mainframe last Monday, saying that the machine is expected to account for half of its expected $2 billion in sales in 1990.

Analysts expect Digital’s 9000 machine initially to be aimed at the Maynard, Mass.-based company’s own mid-range computer customers.

IBM’s new family of 3090 machines is expected to improve performance per dollar by at least 8% to 10%, and closer to 20% in some high-end applications.

“There’ll be a 10% price-performance gain, plus or minus 5%,” said Prudential-Bache Securities analyst Rick Martin.

IBM is also expected to introduce a new release of its ESA software for the mainframes, which some analysts said will be aimed at competing versions being developed by rival mainframe makers Amdahl Corp. and National Advanced Systems.

Amdahl has shipped one version of its own ESA software, and National Advanced, owned jointly by Hitachi Ltd. and General Motors’ Electronic Data Systems Corp., is expected to ship similar software before year-end.

“The differentiation has nearly disappeared,” said Bob Djurdjevic, president of Phoenix-based Annex Research. He added that a new IBM version of ESA could provide more speed for top-end users. “IBM will be in the driver’s seat for a while,” said Djurdjevic.

SoundView Financial Group analyst Stephen Cohen said he expects the new 3090 also to have hypercache capacity, allowing it to store and read often-used data 60% faster.

IBM said it would make a “significant large systems product announcement” Tuesday, but declined further comment.

IBM’s next generation of mainframes, known as the Summit, is not expected until 1991, and analysts said there are already signs that it is prepared to do battle with discounts in the interim.

“They’ve got very rough with the competition,” Wolpert said. “Early this year, we heard IBM was getting more aggressive on pricing and suddenly Amdahl had a pretty crummy quarter.”

Amdahl, 45% owned by Fujitsu Ltd., said its gross margins fell to 40% in the second quarter, when profits declined 37.5% from the year-earlier period.