Volume 1, Number 2 __________________
__________ _ ______ December, 1982
Hard Work Is Important To Digital's
Future
Strength For The Future In
Networking
New Digital Reaffirms Old
Values By Win Hindle, Vice President, Corporate Operations
Broadcasting The World's
Best-Kept Secret
Digital Cited For Management
Excellence
"I'm very pleased at the
improvements we've made over the last few years. We've had
weaknesses. Now those weaknesses are solved or well on the way
to being solved, and the state of the company is good," said
Ken Olsen, president, to 325 senior managers at the recent
State of the Company Meeting.
"It's been hard work getting
here, and I'm sure you're exhausted, too. But, it's the hard
things we remember, that make us grow, that give us
satisfaction. So, for the next 25 years, I won't pray just
for good times, but rather that we have the strength to keep
going and continue to grow, to have quality products and to be
good at what we do.
"We've got a lot of new
products coming that look very good, and technology in the
laboratory that looks great. We're boldly investing in the
future. Our order rate has improved, but it's still not good
enough. So, we're going to have to struggle and be economical
for some time to come.
"We've got the most fun
industry of all," said Ken. "Let's help people dream about it
and prepare now for the marvelous capabilities we can and will
provide."
"Our ability to connect all of
Digital's products in networks is an important competitive
strength." That was the theme repeated at the State of the
Company Meeting by Bernie LaCroute, manager, Distributed
Systems Group; Bruce Ryan, manager, VAX Base Product
Marketing; Peter Conklin, manager, PDP-11 Program Office; and
Rose Ann Giordano, manager, Large Computer Group.
As Rose Ann put it,
"Networking is key to LCG customers. Most of them have adopted
distributed computing as a way to make computing resources
available throughout their organizations. They are looking for
faster, better local area networks and long-distance
communications for homogeneous and heterogeneous computer
systems."
"Digital is the leader in
horizontal networking," explained Bernie. "We have learned a
great deal about networking over the past seven years. While
other companies are just getting into that business, we
already have 8000 DECnet systems installed in the world. That
represents over 100,000 terminals which are connected to our
networks and over a million accounts and users on network
systems. We have also delivered and installed about 4000 IBM
emulators."
According to Bernie, IBM uses
an hierarchical networking approach, linking its computers
vertically to central mainframes. In other words, a user at a
terminal on an IBM 8100 who wants to talk to a user at a
terminal on a System 38 must first ask the mainframe "boss”
computer for permission. Digital, on the other hand,
interconnects computers horizontally, on a peer-to- peer
basis. For instance, a user at a VT100 terminal on a PDP-11
computer can communicate directly with a personal computer
user. "That capability is extremely important because it
reflects the way organizations and companies work," noted
Bernie. "You have to be able to ask your neighbor a question
without having to ask the boss every time you want to do so.
"Furthermore," he added, "we
have the advantage that our networking implementations are
compatible throughout our wide range of computer systems —
from personal computers to mainframes, giving users
transparent access to files and records. And we can integrate
multiple protocols — for Digital- -to-Digital communication,
for X.25 packet-switching networks, and for access to IBM
networks — within a single architecture. So, once again, users
have convenient access to the files they need.
"Today we can tie all of our
computer systems together using DECnet Phase III. We are
developing and will announce in coming months, the software
and hardware needed to tie them together in local area
networks, and to tie those local networks to DECnet and other
networks. We support the only industry-standard local area
network. And our local area network support is fully
integrated into our overall network architecture, something
that, so far, nobody else in the industry has been able to do.
We are also developing technologies that are useful for
building other kinds of local area networks, including
broad-band (for carrying voice, data and video) and PBX
(extensions of telephone systems that can carry data as well
as voice).
"Our overall approach to
networking is independent of the carrier technology," Bernie
continued. "We can run our networks over a telephone-switch
network or over co-axial cable, whether it be broad-band or
base-band. For customers, this represents a guarantee against
obsolesence."
"We're entering the personal
computer market in volume this month. We're ready to sell and
support the products in the field. We've had a very positive
reaction to our products. We think there's an excellent
outlook for achieving our volume and business goals this
year," reported Bill Avery, manager, Terminals and
Workstations Engineering, at the December 1 State of the
Company Meeting.
"We wanted our personal
computers to be user-installable and -maintainable without
special training. We've done that. The engineering issues are
behind us. For service, we've implemented complete telephone
support for key applications as well as for basic products.
You can call one number and get help on your personal
computer.
"A year ago, our goals were to
have the Professional software available in November, the
DECmate software in December, and to have Rainbow software in
October. All of this software is available now. We will be
shipping products for revenue in December," said Bill.
"Meanwhile, we're providing
leadership tools and services to companies that develop
applications software. They're the lifeblood of that market
because people buy personal computers to solve problems and
run applications," he emphasized. "We're not only bringing
basic products to market, we're bringing applications to the
market with those products," he continued.
Digital will sell personal
computers directly to people who want to buy more than 50
units a year. For smaller quantities. Digital will sell
through retail stores or indirect channels. (Digital's own
retail stores are now known as Digital Small Business
Centers).
"The retailers we're putting
in place must commit to a significant amount of training with
us and a rigorous set of terms and conditions that will ensure
the quality and effectiveness of the channels. ComputerLand is
going to be trained in December. In a major selling month,
they have committed two days from each of their stores to this
training. That's the kind of strong commitment we're getting
out of the channels," Bill noted.
Ninety percent of the personal
computers being sold today end up with a printer on them by
the end of the first year. To encourage this, Digital will
have its printers in the stores along with the personal
computers. "In sales, we have already signed about 200
quantity discount agreements," said Bill. "One of the
interesting ones is with the Rochester Institute of
Technology. They plan to purchase about 6000 Professionals
over the next four years."
To push these products.
Digital is planning bold advertising in The Wall Street Journal and key business and industry
periodicals. In addition, there will be network and local
market television ads on news and sports shows, and, starting
in January, on "Meet the Press".
"In the past, quality has been
lacking in the personal computer market. We're producing very
high quality products. People expect quality from us as a
company. We've got a reputation for it. We're going to
maintain that reputation. We're going to be
a leader in this market," concluded Bill.
As we
move ahead with changes in our business goals and procedures,
streamlining the organization to eliminate redundancy, we
must keep in mind that the fundamental values that underlie
Digital are not changing. In fact, the changes result, in
large part, from a reexamination and reaffirmation of those
values. The New Digital, in effect, reinforces the company's
basic philosophies.
For
instance, we must clearly define responsibilities. People
should be able to propose plans, get them accepted (or, if not
accepted, changed), then have the charter to carry out the
plans and be measured on the results. We don't want people
running with plans they don't believe in and don't accept.
People do not perform well under those circumstances.
Another
important value is our commitment to everything we promise to
our customers. This strong commitment-keeping distinguishes
Digital from many other companies. We must do everything in
our power to follow through on our obligations.
One of
the most exciting things about Digital has been the growth
opportunities for the business and for the individuals
involved. But we always have to remember that growth is the
result of doing things well. The real satisfaction comes not
from the growth itself, but rather from the high quality of
products, services and people.
Another
value, competence, is related to responsibility. We want the
very best people — our customers expect it; we expect it; and
we enjoy working with competent people.
Cooperation
is
another important element in Digital's value system.
Unfortunately, we have allowed "functionalism" (commitment to
a relatively narrow part of the company's business) to grow.
Sometimes the barriers between groups interfere with our
working together. If we are going to continue to improve our
productivity, no single function in this company can work in
isolation.
So, even
though some roles in the New Digital are going to change, the
underlying philosophical bedrock of the company is just as
strong as before. The challenge is to improve productivity
while maintaining these basic values and working for customer
satisfaction.
In the
years ahead, we are going to face far more intense competition
than before the recession. We expect people will be challenged
by this new environment. We expect that it will provide the
kind of excitement, growth and fun that Digital and its
employees have enjoyed in the past.
"The role of advertising in
the New Digital is to help divulge the world's best-kept
secret: Digital Equipment Corporation. Not the bits and bytes,
but the simple presence of a great company with great
capabilities," said Dick Berube, director, Corporate
Communications, at the State of the Company Meeting.
"To be successful in the
office and personal computing markets, we must reach huge
numbers of people. The most efficient way to reach them is by
television. But television, by definiton, requires simple
messages. We have to fight the temptation to tell folks how to
build a watch when all they really want to know is what time
it is. Our goal is to let the world know who we are, without
confusing them with tedious detail.
"Less than 10 percent of the
people who should know Digital actually do," explained Dick.
"Our goal is to raise that awareness level in 18 months to 96
percent. That means that virtually every member of our target
audience should receive an average of 15 advertising messages
about the company between now and the end of FY84.
"One of the worst things we
could do is to look and sound like everybody else. Advertising
is being created for Digital that will position us as
experienced, authoritative, dignified and professional. We’re
going to show professional people — managers, owners, doctors,
lawyers, brokers, physicists and office workers — working in
real-life situations.
"We are proceeding with
thoughtful urgency," Dick added. "We want to be on television
on January 1 with the Rose Bowl and on January 23 with the
Super Bowl. Also, Digital has purchased a six-month
half-sponsorship of 'Meet the Press,' which is seen on Sunday
morning. This program will give us a total of about 27 minutes
exposure to a very select piece of our target audience.
"We want to reach the people
who influence computer purchases. We believe that they watch
programs like '60 Minutes,' evening news, NCAA Basketball
Playoffs, major golf events, 'Nightline' and specials (such as
space shuttle coverage). Present plans call for buying 25
different kinds of program properties in the course of a year
for a minimum of 200, perhaps 300 or more minutes of
advertising. Additionally, we are planning magazine and
newspaper advertising to spread Digital's messages in greater
detail.
"The message to our sales
people is — help is on the way; stay tuned."
Digital is one of 42 companies
cited in the new management book, "In Search of Excellence,
Lessons from America's Best-Run Companies". Co-authored by
Thomas J. Peters and Robert H. Waterman Jr., the book focuses
on the characteristics which have made the companies
successful.
The best-managed companies
practice the KISS principle: Keep It Simple, Stupid. They
"learn from their customers. The best managers value action
above all else, a spirit of 'do it, fix it, try it.' They
insist on top quality in their products. They solicit their
employees' ideas and 'treat them like adults,' allowing
talented people 'long tethers' for experimenting." (Time Magazine, Nov. 15, 1982)
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