ICL costs, mostly in marketing, have been running ahead of revenue. This problem has been turned on its head in the last 90 days and is now more correctly viewed as ICL having approximately half billion $/year of spare marketing capacity (backed, of course, by production capacity).
This "instant" marketing capacity is unique in the industry - and represents an extremely valuable asset to ICL - particularly at this time when the computer industry is poised at the threshold of the VLSI era - and Networked Computing is about to pervade the office, the factory, engineering and research, warehousing, retailing and the financial world.
Many companies, both large and small, East and West, are jostling for technical supremacy with unbelievable cost-performance VLSI-based products, but at the end of the day, the winners are likely to be those that establish VLSI-based market share early in the product cycle.
Establishing market share means building up marketing capacity - a slow, costly and risky proposition - particularly outside the U.S. and Japan. Short circuiting this build-up of marketing capacity can be a crucial issue in accelerating the cost-volume learning curve, which is the only sure path to market leadership.
Many of the products emerging are very sophisticated - requiring not just marketing capacity, but highly skilled marketing - backed up by systems support and software.
In short - I see tremendous opportunities latent in ICL's world class marketing capacity, backed as it is by 2000 software engineers. The potential becomes even greater when put in the context of networking these powerful, but stand-alone, VLSI-based products into corporate information systems - which is going to become the prime area for ICL's strategic growth in the 80's.
It is against this background that I see the awarding to ICL of exclusive manufacturing and marketing rights outside the U.S. and Japan for the Three Rivers Computer Corporation "PERQ" Networked Single-User Scientific minicomputer as a first step in a series of such collaborations.
There was intense competition between vendors of such products to collaborate with ICL - and the arrangement was concluded from an ICL position of strength and was structured to benefit both ICL and Three Rivers - the 1 + 1 = 3 synergy mentioned in earlier statements.
The ICL PERQ is a landmark system in that it represents a VLSI cost performance threshold where networked single user scientific computers will start to take over from the shared high performance computers now common in research engineering and design. At £25,000, the processor has a performance approximately 50% of a DEC VAX 11/780, with 5µsec floating point and Pascal P code execution of 1 MIP with a 170 nanosecond microcycle. The interlaced 768 × 1024 Pixel bit-mapped letter quality A4 page display is closely coupled with the 1 megabyte RAM. Multiple pages, with microcoded vectoring and scaling are featured as is a touch tablet driven programmable cursor control. The 24 Megabtye inboard "Winchester" disc accesses in less than 100 milliseconds and outputs at 7 Megabits/sec. The system supports speech output.
Up to 64 ICL PERQs can share resources on a 10 Megabit Local Area Network -and RS232/GPIB interfaces are fully supported, for connecting specialised peripherals such as plotters.
The primary market that ICL will concentrate on is "engineering productivity" using the high performance graphics capability of the PERQ to considerably enhance the quality and quantity of the output of engineers, scientists, researchers and programmers.
During the extensive negotiations between Professor Fredkin, Chairman of Three Rivers Computer Corporation and myself, we have developed a clear strategy for our two companies, and ICL will be contributing its own designers to the PERQ design teams in Pittsburgh.
Initially PERQ - priced at £25,000 - will sell to development or design teams for use by several people. In this role PERQ is expected to pay back in less than a year. As software is built up by the team (using Pascal, Fortran 77, or UNIX) they will saturate one PERQ - and a local area network will be set up to allow two or more PERQs to co-exist and share resources on the net. As user's workloads build up, ICL am Three Rivers will be introducing higher performance PERQs (i.e. higher performance, speed, hardware floating point, colour graphics, 2 megabyte memory) as well as lower cost PERQs with 5-1/4 inch Winchester discs which retain functionality - but with less expansion flexibility. These low cost units are aimed to sell for about £5,000 in 1985.
By this time an engineer will cost over £40,000 per year - and the depreciation of an ICL PERQ at less than 5% of this cost will mean that most engineers and scientists will need to use such tools in order to be professionally competitive, just as use of a calculator is mandatory now.
ICL will be creating an "engineering productivity" software activity and will be working closely with the SERC (Science and Engineering Research Council) standardising on ICL PERQ for University use to ensure that graduates have exposure to these powerful "personal computing techniques" since they will change the way industry, business and government work in the future. The letter quality display on the PERQ is believed currently to be the best in the world - and is an ideal vehicle for prototyping networked office systems. ICL has recently created an office systems development unit to work in this area; meanwhile I am exploring which office systems hardware we will select for marketing in 1982.
The PERQ is the best cost-performance networked single-user scientific mini in the world. Three Rivers is building up manufacturing and marketing in the US. ICL will be launching the PERQ at SICOB in Paris on Sept 23/24 - and will be starting production in the UK in March 1982.
The objective of ICL and Three Rivers is to maintain cost-performance leadership across the product spectrum - and by 1985 to become the "DEC" of this newly emerging market.
For ICL this is one more step towards recovery - and a clear indicator of how we intend to do it. I believe there is so much opportunity open to ICL, and our customers, that the question is not "can we survive" - but rather "how to manage all this opportunity" .
For our customers faced with minicomputers and micros popping up in an anarchic fashion - ICL will bring networked order to the pending chaos. Every product offering ICL brings to the market will form part of a networked product line.
The scientific mini, the word processor, the departmental mini, the factory/warehouse system will yield the obvious benefits to their users - be they individuals, departments or divisions, but in addition the company making the investment will get the benefit of Networked Computing - with electronic mail and messaging, distribution of data bases and applications, remote file access, management summary and exception reporting.
In the next few months ICL will set up a Networked Applications Division to develop these "upper level" applications that can pervade the network at little extra cost over and above the Departmental computers. We will also be creating a Network Seminar programme, and Network consultancy.
The ICL PERQ will be just one node in a network, typically in the engineering , software, design or research department with primary use as a scientific machine - but it will also support general purpose computing and personal computing - i.e. project management, PERT analysis, financial modelling and simulation as well as word processing and text handling for the preparation of technical reports, illustrated product data sheets, statistical analyses, automated characterisation and plotting. It will also provide remote access to abstracting services, component indices, patent lists, legal and legislative archives, and any database whose contents need display.
Data in the node is accessible elsewhere in the net - i.e. headquarters can poll all projects in the net to see if there is any spare drafting effort. PERQ can look at the goods inwards computers to see if a certain part has arrived, interrogate a debtor's file, examine a hotel reservation list, transmit data to a selected location, or carry out digital facsimile transmission.
Telemetering across the net is possible - with automated reports in graphical, tabular, or printed form. Statistics about the availability and performance of the nodes can be collected and broadcast round the network.
Once you join otherwise free-standing computers together with a length of wire, and apply software - the benefits multiply. No major computer user should allow proliferation of computers - micros or minis - or word processors without a Networking Strategy to yield these additional benefits in the future. ICL is positioning its product line with this future sharply in focus.
