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February 25, 1988

TANDEM, AT&T TO LINK CPUs, PUBLIC PHONE EXCHANGES, WRITE ISDN APPLICATIONS

By CBR Staff Writer

Tandem Computers Inc, Cupertino, staked a claim to become a major player in the convergence of computing and telephony last year when it bought a stake in the Plano, Texas-based Integrated Technology Inc. This week its ambitions took a great leap forward when it signed an agreement with AT&T Co under which its NonStop fault-tolerant transaction processors will be made compatible with future versions of the AT&T 5ESS digital telephone exchanges, which will implement the Integrated Services Digital Network standards. As part of the agreement, Tandem will become the first company other than AT&T to develop both the basic and primary rate interfaces necessary for ISDN operation on the 5ESS switch. The two will also jointly develop ISDN applications for on-line transaction processing over the 5ESS switch, and telephone companies will be able to offer these services to their customers using AT&T and Tandem equipment. IBM has signed comparable development agreements with Bell Atlantic, L M Ericsson and Siemens, but the AT&T-Tandem pact is seen as more immediate and far-reaching. It is also another snub from the telephone side of AT&T to the company’s Data Systems division, which has had its own top-end fault-tolerant models in the 3B family from the start, but never seriously promoted them. AT&T Co also said that its Data Systems computer division will not now be profitable until 1990, a year later than it had hoped. Data Systems president Vittorio Cassoni had told analysts last March that it would be profitable at the end of 1988, but AT&T chairman James Olson told Reuters this week that going into 1990 the business ought to be profitable. Losses last year were cut by two thirds, implying a deficit of between $265m and $300m.

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