Firms Are Downsizing Computers

Since computers entered the business world, large businesses and corporations have relied upon centralized, mainframe computers to handle various complex tasks. But such centralized computing could soon be a thing of the past for large and small businesses.

“For many data processing tasks, the decline in price/performance of workstations has eliminated the economic benefits of sharing computer processing power,” says a study by the New York-based Diebold Group of the management implications of technological advances. “The age of the all-purpose, centralized computer utility could, therefore, be coming to an end.”

The study points to the fact that local-area networks, minicomputers and workstations--computers more powerful than minicomputers but smaller than mainframes--have become a standard part of most businesses’ information processing systems. Not only have these non-centralized technologies grown in power, but they have also contributed to a more decentralized management structure in business.

In the same way that the computers that automate manufacturing processes are situated in the factory and under control of manufacturing, computers that support marketing, sales, engineering and personnel functions should be near and under the control of the appropriate workers and mangers, the report argues.

“Everything about mainframes--from price/performance to application development costs--make them more expensive to own and operate than minicomputers,” says John Diebold, the group’s chairman. “These same factors make minicomputers more expensive to own and operate than office workstations,” because the costs of acquiring and operating a workstation are not substantially higher than those for a minicomputer, while the capabilities are greatly increased.

“This ‘dis-economy of scale’ in computers exists in acquisition costs as well as in maintenance fees, operating costs and system software prices,” he adds. “Expenses for application development, programmer training and system support are all disproportionately higher for mainframes than for the minicomputers--and higher for minicomputers than for workstations.”

The improved communications that result from networking and the increased control that workers have over costs and schedules are cited by the report as reasons that companies are shifting from mainframes to networks of smaller computers. Personal computer and workstation users, for example, generally make fewer errors and are more productive than are those who use mainframes and minicomputers.

Although the Diebold Group’s report sees the decentralization of most business computing as all but inevitable, it notes that there are certain risks to such downsizing. There remain limits to the capability of personal computer and workstation hardware and software, and the possibility of duplicating functions and resources is increased by decentralized computing.