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Volume 4 Number 8__________________________________________________________
December 1985
One Advertising Message — 'Digital Has It Now’ By
Henry Heisler, Manager, Corporate Advertising
Becoming
Number
One In The Eyes Of Our Customers by Win Hindle, vice
president, Corporate Operations
Report
Names
Digital Most Comprehensive Software Supplier
Educational
Services
To Report To Don Busier
Taxation
Of
Education Reimbursement In Question
Digital
Introduces
New Salary Management System (Sms) For Supervisors
Digital
Has
It Now Is Theme Of DECWORLD '86
In the U.S., all advertising is going to use a
common format with a common message.
In the past, many different groups ran their
own separate campaigns. There was base product marketing
advertising, service advertising, channels adverÂtising and
corporate advertising — all with their own separate messages.
Now we have "company advertising" serving the
needs of many different groups — such as Applications Marketing,
Industry Marketing, Channels Marketing, Services and Sales — with
a common format and message.
The four words on the left side of each print
ad read: "Digital has it now." Next to the word "it" appears
artwork highlighting one aspect of Digital's offerings. The main
text may highlight a particular product or leadership capability
or be in the form of a testimonial from a customer. But in any
case, the main text deals with business solutions and customer
benefits rather than product specifications.
The repeated message "Digital has it now"
responds to the claims of other computer manufacturers about what
they will be able to do in computing and networking. What
differentiates Digital is that we have been planning and
developing the VAX family and our networking products for 10
years, and we already have what customers need to solve their
business problems.
The campaign begins this December. The first
testimonial ads highlight applications at Polaroid, Avon, Alcoa,
the National Football League, Boston College and Bantam Books.
Other ads are being prepared to highlight new products to be
announced, and networking and service capabilities.
The copy won’t say, “Digital has given Polaroid
Ethernet and wide area netÂworks." Rather it says, "Digital solved
Polaroid's corporate-wide informaÂtion needs." What did Digital do
for Avon? "Digital gave us an office solution that allows all of
Avon's computing systems to work together."
In the past, Digital has put about
three-quarters of its print advertising budget into publications
aimed at technical management and users, and the rest into
business publications and newspapers aimed at middle and top
management. Now the company is reversing that
emphasis, aiming the bulk of the advertising at middle and top
management. We're not stopping the techÂnical advertising to the
technical people, but we are definitely aiming higher on the
organization chart. This campaign coincides with the new efforts
that Sales is making to establish contacts higher in organizations
and to sell total Digital capabilities. The advertising is
intended to plow the ground and make it softer, so the job of
sales people will be a bit easier and more productive.
Two agencies -- Schneider, Parker and Jakuc in
Boston and Ketchum AdvertisÂing in Pittsburgh — are working on
this campaign.
Digital and IBM are the two main players in the
networking arena. So any networking announcement by IBM is
important to us.
On the positive side, IBM's token ring
announcement is an endorsement of local area networking. It means
that IBM has said that what we at Digital think is important is
important to them too. And, since IBM is an influenÂtial factor in
the computing industry, when they say something is good, a lot of
people suddenly get interested in it.
The negative for Digital is that some
significant piece of the local area network business will go to
IBM. So, it's difficult to say on balance whether the announcement
was positive or negative for Digital.
Whereas IBM has very few products that work on
local area networks right now, Digital has a very strong product
set deliverable now. IBM's announceÂments are similar to what
Digital was saying two to three years ago.
On the other hand, IBM announced their local
area network at a significantly lower bandwidth than Ethernet — 4
Mbit vs. 10 Mbit. From that point of view, in terms of
performance, I think it would be difficult to find any
circumstance where a 10 Mbit Ethernet would not work a little bit
or a lot better than a 4 Mbit token ring.
To some degree, IBM has done a disservice to
its customers by introducing a different and lower-bandwidth
technology in 1985. There is no particular reason why they should
do so. They could just as well have used Ethernet — for which over
200 vendors already provide products.
The announcement indicated two major weaknesses
of IBM:
o They didn't say anything about software
supporting the local area network. They announced a component
rather than a system.
o They only talked about how the token ring
would connect their personal computers together. There was no
mention ofhow they might tie to their departmental or mainframe
machines.
In contrast, Digital's Ethernet products have
always been an integral part of DECnet networks. That represents a
difference in architecture capabiliÂties. Ethernet fit right into
DECnet. We didn't have to change the network architecture when we
introduced Ethernet. We brought the advantages of local area
networking within the context of the existing DECnet architecture.
It seems that the traditional form of IBM's
network architecture, SNA (Systems Network Architecture) simply
wasn’t suitable for local area netÂworking. SNA is based on a
hierarchical scheme of large machines controlÂling smaller
machines and terminals -- a master and a bunch of slaves — whereas
the problem of enabling large numbers of personal computers to
communicate with one another is much better suited for the
peer-to-peer approach which is the basis of Digital's networking
architecture.
In general, IBM's product strategy is
fragmented. They consider it perÂfectly acceptable to introduce
different kinds of networking into different product spaces and
leave it up to the customer to figure out how they all work
together.
People often ask if Digital will support IBM's
token ring. We have no plans to do so at this time. On the other
hand, Digital has a very strong straÂtegic commitment to provide a
high level of connectivity to the IBM world. So if the token ring
becomes an important element in the IBM world, we’ll develop the
capabilities necessary to work with it.
We've defined the DECnet communication
architecture to be media-independent. We could easily add another
medium, such as IBM's token ring. Such an efÂfort would not
significantly disrupt any investment that we've made in the
existing DECnet and the existing media.
IBM is making announcements in local area
networking because their customers want it. But they're making
very preliminary, step-by-step announcements instead of announcing
complete product capability, because they don't have a complete
product capability. It's a delaying tactic. They want their
customers to say, "IBM is coming along. Fine. We'll just wait a
little bit longer till we see how it all turns out." They just
want to to freeze the market or hold their customers' interest
until they are in a position to become a dominant force in local
area networking.
What is the difference between Ethernet and
IBM's token ring? In a local area network, you have a
communications channel shared by a number of different stations or
nodes (computers), and you need some procedures (method of
"arbitration") to decide which station can use the channel at any
given time. There are various schemes for doing this.
In the token scheme, a "token" is handed from
one station to another. If you have the token, you can use the
channel. If you don't, you can't.
In the scheme used in Ethernet, if you want to
use the channel, you deterÂmine if anyone else is using it. If
not, then you simply start transÂmitting. If it turns out that two
stations decide to use it at the same time, you can get a
"collision." Then you use a random algorithm to back
off and try again — an approach that makes it
extremely improbable that a collision could occur again.
Some people, either deliberately or through
misunderstanding, malign the arbitration scheme of Ethernet. They
say, "Maybe this thing could get all locked up, and nobody could
ever get through."
In practice, that problem never occurs. And one
can support far higher levels of communication across a 10 Mbit
Ethernet than across a 4 Mbit token ring.
As a human analogy, consider a meeting with a
number of people sitting around a table. The Ethernet scheme
reflects the way people normally manage meetings. If somebody's
talking, you normally wait until that person’s finished talking,
and then you start to talk. You can contrast that way of working
with a classroom scheme where somebody at the top says, "It's your
turn to talk."
This whole discussion around arbitration
schemes is largely a ploy by vendÂors who don't have products, to
focus on the most insignificant portion of local area networking.
To the end user, the arbitration scheme doesn’t make that much
difference.
It's like arguing to a user that the best car
is based on a four-cylinder engine with fuel-injection or a
six-cylinder engine with carburetion. The user just wants to drive
to work.
If someone tries to sell you the virtues of his
engine, and you find out that he doesn't have a car yet, and you
have to wait for the car, you’d find that wasn't a very useful
discussion.
That's basically what's happened in the local
area network space. Many people want to talk about engines because
they don't have any cars. Digital has a good engine and the cars,
too.
Ten to fifteen years ago, Digital was organized
into some 30 product lines, each managed like a separate business.
That approach worked well at the time. The product line managers
operated like entrepreneurs -- taking initiative and
responsibility and creatively opening new markets. We grew
rapidly. We changed the world.
Back then we were less concerned about the
integration of our products. Computers were often used
independently. And if our customers -- who were technically
sophisticated -— needed products to work together, they could
design that capability themselves.
Now our contribution to the computer industry
is much different than it was then. Many companies today can do
what we did before -- provide unique products to fill various
niches and needs. But now we have a complete
integrated set of products, networks and
services. We offer a range of compatible systems and
communications capabilities that is unmatched. It has taken almost
10 years and enormous discipline to build this capability.
We now have the best product set and the best
services in the industry. Our Field Service is rated number one.
Software Services continues to grow faster than any other part of
the company. Educational Services has grown to a size comparable
to a 10,000-student university, with 500 courses in 18 languages.
Our task is now to take full advantage of these
strengths and offer our cusÂtomers total solutions — hardware,
software and services — tailored and packaged to meet their needs.
So today, rather than autonomous product lines,
each pursuing various market niches in its own way, we have
different marketing groups that work together as teams to make
sure that we provide integrated solutions for the important needs
of major classes of customers.
Product (Applications) Marketing looks at our
customers' needs horizontally -- in terms of job functions that
many different kinds of companies have in common. These groups
make sure we provide complete solutions and clear mesÂsages
tailored to meet the needs of Office, Manufacturing, Engineering,
Science, Small Business and Management Information Systems (MIS)
users.
Industry Marketing looks at our customers'
needs vertically — in terms of the specific industries. The
emphasis is on the needs of specific accounts. Here, an important
part of the selling strategy is to show that we underÂstand the
business trends, competitive pressures and problems of these
industries -- making sure that our marketing messages are written
in lanÂguage these people immediately relate to, and making
certain that our products are packaged and configured to meet
specific industry needs. To begin with, the industries we are
focusing on include; Education, Medical, Telecommunications,
Financial Services and Government.
As always, third parties — OEMs and
distributors — are an essential part of our business. Our emphasis
here will be to market to those OEMs that complement our end-user
marketing strategies, so our efforts together with those of our
OEMs fill all major customer needs. Channels Marketing ensures
that we have programs, products and messages appropriate for these
volume customers.
Area and country management teams are measured
by orders, customer satisÂfaction, product mix, costs and
revenues. Area and country marketing teams provide the support and
programs to reach those targets.
We have to gain ground in our large accounts.
That means meeting IBM head on, getting our message into corporate
offices, letting them know that we can provide integrated
solutions to solve their needs. Our systems soluÂtions give us a
significant advantage in terms of cost of ownership. But we have
to communicate that message.
Our strategy is to introduce products that are
competitive with the best available at the time of introduction.
MicroVAX II is an example of the excellent
products we have introduced in the last year and other excellent
products will be introduced in the near future. We can sell what
we have today with confidence in the strength of the next
generation of products to come.
Growth has never been our objective — guality
and customer satisfaction have been. Today, quality means more
than well-designed and reliable products; it also means providing
complete integrated solutions. And customer satisfaction requires
careful attention to development schedules, on-time delivery and
lowest possible costs.
We want to be number one in the eyes of our
customers. The competitive environment demands that we meet this
goal, and to succeed, every employee must be involved. For Sales
this means working with customers as a business partner or
consultant; helping to show them how our systems can solve their
business problems.
In all our efforts, we must remember the
importance of our people. To be an excellent company we need
excellent people in all positions. We must hire the best for our
unique environment, and further train and develop talent we
already have. And one of the most important targets we have for
managers is that they every manager should develop two qualified
successors. That is a fundamental requirement for top-notch
management.
We also must remember that financial strength
is a measure of corporate excellence. Our corporate goal is a 16%
return on assets. The investors, who provide us with the capital
we need to grow, look very carefully at such numbers. We are not
satisfied by our recent financial results. We must continue to
contain our expenses, increasing our productivity by working more
cleverly. This effort requires initiative from every individual,
and we are counting on everyone to offer creative ideas on how to
improve.
Altogether, we have made progress in making
Digital easier to do business with. We are in the process of
simplifying our business relationships and our discount
structures. These efforts have a very high priority in light of
our number one goal of satisfied customers.
We still have many challenges. We need better
teamwork. Our integrated solutions strategy requires close
coordination of Engineering, ManufacturÂing, Sales and all the
Services. Our "Selling Services" program is a major step in that
direction — presenting one face to customers. Also, guided by
Channels Marketing, we have to re-emphasize the importance of our
volume accounts in carrying out our complementary strategy.
But our strengths, in products and services and
people, are great. And if we can get that message out — let
customers know how we can solve their business problems today —
our future is very bright indeed.
Digital has been named the most comprehensive
supplier of software products and services in the industry for
1985 by the ICP Business Software Review.
The seventh annual ICP 200 report is primarily
an independent analysis of the top 200 U.S. software product and
service suppliers, as measured by fiscal year revenue derived from
the sale of software and service. Its purpose is to provide an
accurate statistical portrait of the industry in terms of
revenues, growth trends and other data used to identify and track
leading suppliers.
The information represented in the ICP 200 was
compiled from annual reports, Dun & Bradstreet and Standard
& Poors listings, and questionnaires completed by vendors. A
list of 13 measurement categories varying from Application
Software Supplier to OEM Distributor were used in the ranking.
Digital is listed as being the only company
actively supplying products and services in every category ranked
(IBM is active in just over half the categories). In the latest
ICP 200, Digital replaced IBM as the industry’s leader in growth
of software products and services.
U.S. Sales
Operations Team Named
Harvey Weiss, vice president, has announced the
members of his U.S. Sales Operations Team:
John Alexanderson, vice president,
continues to lead the Peripherals and Supplies business, striving
to maximze Digital's market share in the installed base.
John Buckley manages the U.S. Business
Operations Group, with responsibiliÂties including business policy
and procedure, asset management programs and the Traditional
Product Line (TPL).
Bill Gervais serves as Controller of
U.S. Sales Operations, responsible for financial planning and
analysis, internal control and decision support systems. He also
reports to Tom Colatosti, manager, U.S. Area Finance and
Administration.
Bob Gregorio serves as Personnel
manager, providing consulting support to Sales Operations
management on all human resource planning and development issues
and coordinating the delivery of all day-to-day Personnel
services. He also reports to Dick Walsh, manager, Field Personnel.
Mike Kalagher continues to manage
Customer Administrative Services (CAS), striving to improve order
cycle time and order management and to develop systems that free
up sales time.
Bob Nealon manages End User Operations,
providing business mnagement support to Sales and working with
end-user marketing groups to implement their strategies and
programs.
Frank Posey, manager of the Government
Systems Group, continues to report to Harvey Weiss.
Mark Roberts and his group are
responsible for doing business with COEMs, TOEMs, distributors and
dealers. Their key mission for the coming year is to sign up
competitors' major OEMs and Value-Added Resellers. In addition,
Mark's new product consulting group will provide presentations and
consultÂing to support complex sales strategies.
Bruce Ryan serves as manager of Product
Operations, responsible for developÂment of annual ship plans,
managing the Field demand/supply process and managing the
planning, proposal and implementation of corporate product
announcements.
Abbott Weiss manages U.S. Manufacturing
Operations, responsible for planning and assuring the delivery of
all shipments to customers in the U.S. and forecasting on a
worldwide basis. His group serves as a key link between Sales,
U.S. Operations and Manufacturing. He also reports to Bill Hanson,
vice president, Manufacturing Operations.
Earl Mason has joined Digital as Manufacturing
Finance Controller, reporting to Bill Hanson, vice president,
Manufacturing Operations, and George ChamÂberlain, vice president,
Manufacturing & Engineering Finance. He is responÂsible for
all worldwide financial activities within Manufacturing. Earl
comes to Digital from AT&T Information Systems, where he was
Controller and, prior to that, Director of Finance Management.
During 15 years at AT&T, he held various financial positions.
He holds a B.S. in economics and an M.B.A. in finance from
Fairleigh Dickinson University in Rutherford, N.J.
Jim Pitts has been named Field Operations
Customer Satisfaction manager for the Corporate Quality Group,
reporting to Frank McCabe, Corporate Quality manager. A Digital
employee since 1964, Jim has held various positions, including
engineering programmer, Senior Sales Representative, Sales Unit
manager, Regional Sales Development manager, and most recently,
Metro Boston District Sales manager.
Pat Cataldo, manager of Corporate Educational
Services, now reports to Don Busiek, vice president. The Ed
Services organization will continue to operate and be managed as a
separate business function, providing education and training to
Digital customers and employees.
Don is now responsible for the Software
Services (SWS), Computer Special Systems (CSS) and Educational
Services organizations.
Education
reimbursement payments made to employees for many external courses
which currently are exempt from tax withholdings will become
subject to withholdings beginning January 1, 1986, with the
scheduled expiration of Internal Revenue Code Section 127 on
December 31, 1985. Section 127 presÂently allows up to $5,000 per
year of educational assistance to be excluded from an employee's
income. At this time, it does not appear that the law will be
extended.
Some "career-related" courses and all
"knowledge perspective broadening" courses will become subject to
tax withholdings. Courses that are "job reguired" and some
"career-related" courses" or those defined as necessary to meet
"critical workforce needs" may not be affected.
During December, instructions and guidelines
for interpreting and complying with IRS regulations will be sent
to Personnel managers.
Digital is about to introduce a new
computer-based system that will give salary managers a flexible,
yet simple, way to plan salaries for employees reporting to them.
This software, called the Salary Management System (SMS), will be
available this year to about two-thirds of the supervisors who
manage salaries . . . those with the equipment and other support
needed to access SMS. The intent is to have all supervisors on SMS
for salary planning in January of 1987.
Why is
Digital offering SMS?
Digital is offering SMS because of its
advantages to supervisors, Personnel and the corporation. On a
company-wide basis, SMS:
o Saves significantly on the time it takes
supervisors to do salary planning,
o Enables supervisors to do a better job of
delivering salary based on performance, the foundation of
Digital's compensation philosophy,
o Helps to ensure the accuracy of the data,
o Provides corporate-wide rollups and
measurements, and
o Eliminates the expense of having many
organizations developing their own salary planning systems.
What are
the advantages to supervisors?
With SMS, supervisors will be able to:
o Know immediately through reports how a
potential salary plan affects their spend number, their frequency,
participation and promotion rates, and pay equity. This is
especially helpful to managers of several peoÂple who supervise
others. If the supervisors have their salary plans done,
supervisors or managers will be able to run reports immediately on
SMS with a few keystrokes.
o Revise salary plans until the final salary
plan date set by each organÂization. By having this flexibility,
supervisors can try different apÂproaches to salary planning and
see how those approaches affect the measurements shown in the
results. If the results aren't satisfactory, they can revise their
salary plans.
o Have more control over the salary data of
employees who report to them.
o Plan with current information on the
employees reporting to them, since the SMS contains data from the
Personnel Master File, which is updated regularly.
o Experience fewer errors in salary planning.
o Be able to check salary plans at any time on
the screen, provided their site decides to keep SMS up year round.
In May of 1986, supervisors on SMS will be notified that they can
access reports covering actual spendÂing versus salary plan and
other measurements, and information about how to do that.
What are
supervisors' responsibilities in using SMS?
As in the past, supervisors' primary
responsibility in using SMS is to genÂerate a salary plan that
supports the corporation's pay philosophy and pays appropriately
based on the performance of those employees who report to them.
With SMS, it should be easier to do that.
In addition to the normal responsibility of
ensuring salary plan confidenÂtiality, supervisors will have to
ensure that their individual SMS account is secure. There are
security features built into the system, such as passÂword control
to access data and a special feature that will automatically
logoff the SMS system if it is left idle for a few minutes. Even
with these features, supervisors should change their password
frequently and never leave their terminal unattended.
How to
learn more about SMS
Supervisors will be able to learn more about
SMS in a number of ways. WithÂin some of the organizations,
Personnel departments have begun to introduce SMS to prospective
users by holding demonstrations and information sessions. The
primary source of information for supervisors will probably be the
PerÂsonnel person who consults with them during salary planning.
To support supervisors during this transition to SMS, Personnel
people are being trained on how to use the system and how best to
help supervisors to use the system.
During the salary planning kick-offs,
supervisors will receive a Salary Management Guidebook and an SMS
Users' Guide, which will be distributed locally. A copy of this
article will also be included to ensure that all supervisors see
it. From January to March 1986, while salary planning is being
done, each organization will also have a hot-line to handle SMS
questions.
Once salary planning is complete, supervisors
using SMS will be asked to describe what worked well and what
didn't with SMS. Understanding what did and did not work will help
to ensure a smoother salary planning process during 1987.
What will be done for supervisors who are not
on SMS this year?
The supervisors who are not on SMS this year
will do salary planning just as they have in the past. Information
about that will be communicated through the compensation focal
point within each organization.
Digital will hold its second DECWORLD sales
exposition for customers FebruÂary 24-28. With the theme "Digital
Has it Now," the goal of DECWORLD '86 is to demonstrate Digital's
range of integrated solutions across industries.
"We will demonstrate Digital's leadership and
uniqueness in computing archiÂtectures, networks, industry
solutions and services, for the large multiÂnational corporation
as well as the small business," says Bob Hughes, vice president,
and sponsor of the event. "These capabilites enable us to help our
customers' operations be more competitive and productive. We want
to communicate this advantage at DECWORLD '86," he emphasizes. Bob
has named Pete Zotto, product group manager, as event chairman.
DECWORLD '86 will be held at the Sheraton
Boston and Copley Place, Boston. There will be two exhibits - a
solutions center and a technology center. Approximately 60
seminars will be held in conjunction with the exposition.