The diversification by Telecomputing Plc from its core teleprocessing monitor business on ICL mainframes into artificial intelligence software on IBM mainframes always looked a somewhat risky one, and the Oxford company has encountered more scepticism than it expected about its Top-One product, leading to it reporting a pre-tax loss of UKP189.0m for the six months to March 31 (see Company Results). The company puts the loss down to revenues from Top-One not matching the increased marketing and sales costs because of caution among users about committing to any expert system product before they had seen it at work on their own applications. Telecomputing says that the take-up rate of the product has been satisfactory: the problem is that potential customers won’t come up with the full price until they have seen their own application using it. Telecomputing puts this caution down to the fact that it reckons a number of companies have launched simplistic expert system software products prematurely in order to gain market share, and customers have either themselves been burned, or have heard tell of bad experiences from others. Moreover, says the company, four US companies have now launched their own products for the IBM mainframe environment, and Telecomputing has had to divert potentially revenue-earning staff into developing extensions to Top-One to maintain its edge. What is more, the competing US products, it says, are being put out on long periods of free trial, but are suffering from the fact that while running the things on IBM overcomes the lack of adequate computer power that bedevilled expert system shells on personal computers, users expect the products to do a lot more on a mainframe, and Telecomputing as a result is having to convince customers that its own product does not have the same shortcomings. The company is confident that in Top-One it has an advanced implementation of one of the major languages necessary to support functional knowledge-based systems of substantial complexity, and that the credibility gap should begin to be bridged over the next few months when it is able to report on some of the things its customers have achieved with it. In the meantime, its accounting policies are not to take into turnover any amount for which the user will not accept and process an invoice. The company does capitalise development costs using the recommended American standard, but says that the extensions to Top-One have been treated as marketing costs. And to make the product more widely accessible, Telecomputing is working on versions of Top-One for Unix, VAX/VMS and 80386-based micros, all of which should become available during 1989.
