Computer timesharing was expensive by today’s standards. A typical user paid over $10.00 for each hour that his terminal was connected to the central computer. Intense calculations could increase the hourly cost several fold. Overnight storage could cost $10.00 a day or more for each megabyte of data. (Yes, that’s $300,000 each month to rent the capacity of a modern 100 gigabyte drive!)
Minicomputers provided an alternative for supporting clusters of terminals for hotel registration systems, banking systems, point of sale, inventory control, mortgage loan servicing, blood bank management, and other applications. These minicomputer systems were less expensive and easier to manage than large mainframe computers. Minicomputers and timesharing systems both were vulnerable when small desktop computers started to provide similar features.
Personal computers killed the computer timesharing business. A user’s timesharing bill for just a month or two was often enough to purchase a desktop personal computer. Timesharing companies closed their networks of branch offices and the luckier employees found other ways to make a living. Software prices plummeted. Inexpensive PC-based accounting packages replaced mainframe accounting packages that sold for over $10,000. Word processing, database, and financial modeling programs evolved to look more like their modern counterparts. Inexpensive word processing and graphic spreadsheet programs became popular. PC systems like Turbo Pascal, Basic, Paradox, dBase, and Access created business opportunities for consultants and software developers.
Personal computers became inexpensive alternatives to timeshared computing. PCs also took over many functions provided by minicomputers. Personal computer users became responsible for their own software installation, backups, maintenance, upgrades, and troubleshooting. The low prices for PC hardware and software didn’t allow for the extensive personal support that the timesharing companies provided their customers.