Serial versus TELNET, what's the difference?

When networks were conceived, the cost of creating a network, hardware and software, was high. Only the large computers were connected at first and the users would log onto those computers from terminals connected to serial ports on the computer. It was costly, if not impossible, to string a serial cable from each computer to each terminal on each desk. When the computers were connected to each other with a TCPIP network the inevitable question was, if I'm already logged onto one computer which is on the TCPIP network, why can't I create a connection via the network to another computer on the network and log onto it? There was no reason why not, except, that there was no software to do the connecting and that's how TELNET got started.

In the TELNET situation, it's assumed that you are using a terminal to log onto a local computer and that that local computer is on a network with a remote computer that you want to log onto and use. If you run the TELNET command on the local computer, it will turn control of the terminal screen over to whatever remote computer you choose from the network. You will see the login prompt, username and password, from the remote computer and if you logon correctly, you will get a command prompt and be able to execute commands on the remote computer. Since a local serial connection and a network connection tended to be much faster than a dial up modem connection, the use of TELNET was a big productivity gain for users lucky enough to have computers on the infant Internet. The downside was that there was no way to execute commands on the local computer while it was being used to connect to the remote system.

Applications similar to TELNET were developed but TELNET became the dominate and most popular form of the application. In addition to supporting TELNET, OpenVMS also supports a similar application, SET HOST, which uses different network protocols to make a TELNET like connection from one computer to another. The DCL SET HOST command is different from TELNET in that it uses the network protocol, LAT and DECNET instead of TELNET and TCPIP. While it's clear that TELNET and TCPIP are dominant, the OpenVMS SET HOST application is very useful for computer to computer connection when both system are OpenVMS systems.

TELNET and SET HOST worked so well that after a while, small, simple computers were being built just to support those applications and nothing else. The small computers were called Terminal Servers and their job was to provide network TELNET and SET HOST access to terminals. The SET HOST application was simplified to just use the LAT network protocol and to use a simple "CONNECT hostname" command format. A typical terminal server would have 8 to 128 serial ports for the terminals and one network port supporting TCPIP (for TELNET) and LAT network protocols. From the Terminal Server, users could connect to any computer on that network or connected networks. Terminal Servers were also simple boxes which could be maintained and replaced easily which promoted high reliability and low life cycle costs. A Terminal Server and one network connection could be placed in a closet on each floor of an office building and by pulling serial cables only a short distance to each desk, all of the offices and cubicles could have computer access. Their low per port or terminal cost produced the first economical desk top access to computers. In some companies every desk could and did have a terminal and computer access due to the economy of the terminal server and the VT terminal.