The coming computer shakeout: preview by an industry insider;
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By Frederick H. Guidry
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Fred Guidry is a computer systems supervisor at the Monitor. The computer industry shakeout is under way. Some large companies have already dropped out. Many small ones have either gone out of business or been absorbed into other enterprises. It is obvious that more big changes are coming. The reasons are familiar: * Technologies are not standing still. The way information can be stored, recovered, and transmitted is being researched almost without regard to the spectacular advances already made. * New or improved products are coming out daily in both hardware and software. Companies have to decide whether to copy or leapfrog the competition. * New markets are opening up. The personal computer, a recent entry, is revolutionizing the industry. * Strategies that used to hold up for a generation are abandoned in a few years or months. Managements are being tested as seldom before to demonstrate foresight, flexibility, imaginativeness. All this makes forecasting extremely hard. Yet investors as well as businesses and people using computers need to have some feel for the future. They would like to know which companies are likely to prosper or at least stay in business. Stephen T. McClellan's book makes bold and carefully reasoned predictions of what he calls the ''winners, losers, and survivors.'' He looks ahead as far as 1990 - which may not seem all that distant, but which may see some changes even more radical than those of the recent past. Mr. McClellan, a computer industry analyst at Salomon Brothers Inc., writes authoritatively and engagingly, moving easily from broad descriptions of basic trends to frank discussions of individual companies and the people who run them. Reading him is like sitting at the desk of a well-informed stockbroker and being treated to a thorough overview of the computer industry. Hear him on Trilogy Systems, for example: ''The wildly fantastic goal of this California-based start-up can be stated simply: Trilogy wants to become the most successful manufacturer of IBM-compatible mainframes at a time when the mainframe market is all but standing still, the plug-compatible landscape is littered with bankruptcies, and IBM is tightening its grip on what little potential for growth is still left. . . . Trilogy plans to achieve its ends by perfecting a new semiconductor technology that . . . could rank as one of the most significant advances in the history of computing.'' Then Mr. McClellan goes on to answer his own provocative question: ''Can Trilogy be taken seriously?'' He daringly lists what he believes will be the 10 leading computer companies in 1990 and explains his choices. Shorter descriptions of contenders in various fields - data services, office automation, personal computers, software producers - are also included. Altogether he touches on more than 60 firms whose stocks are publicly traded. (He visited 40 of them personally.) What is most compelling about this book is the fact that it is not by a free-lance writer only drawn to the topic by its obvious popular appeal. It is based on years of close study by a professional analyst. An unexpected bonus is the stockbroker's lively and persuasive prose.
The Coming Computer Industry Shakeout: Winners, Losers, & Survivors, by Stephen T. McClellan. New York: John Wiley & Sons. 349 pp. $19.95.
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Mark Sappenfield
Editor
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