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Volume 5 , Number 1______________________________________________________
January, 1986
THE STATE OF THE COMPANY MEETING held on
December 5, 1985, emphasized DigiÂtal’s ability to network
computer products today, the evolving simplicity of selling these
networks, and the organization and vital importance of marketÂing
at Digital.
After a summary of today's networking
capabilities, Mahendra Patel described seven Standard Network
Packages that had been designed to simplify the sales process. The
audience of 550 then heard how the Standard Network Packages were
used as part of the complete integrated solutions Digital offers
to help our customers solve their business problems. The afternoon
focused on how Digital has organized its marketing functions to
better support sales and market penetration.
This issue of MGMT MEMO summaries the speeches
made at the State of the Company Meeting. We start with Ken
Olsen’s comments.
The
Challenge
Of Filling The World With Networking by Ken Olsen,
President
The
Customer
Perspective by Peter Smith, vice president, Product
Marketing
Digital's
Networking
Capabilities by Mahendra Patel, Technical Director,
Distributed Systems
Networking
In
The Office by Henry Ancona, manager, Office and
Information Systems
Networking
In
MIS Rose Ann Giordano by vice president, Large Systems
Marketing
Networking
In
The Factory by Jim Dale, manager, Manufacturing
Applications
Networking
In
Engineering by Bill Steul, manager, Engineering Systems
Networking
Multiple
Buildings And Sites by Bill Johnson, vice president,
Networks & Communication
Product
Marketing
by Peter Smith, vice president, Product Marketing
Overview
Of
Industry Marketing by Bob Hughes, vice president, Industry
Marketing
Channels
Marketing
by Jack MacKeen, vice president, Channels Marketing
An
International
Environment — Europe by Bruno d’Avanzo, vice
president, Marketing, Europe
A
New Customer Communication Strategy by Gary Eichhorn,
manager, Product Marketing Programs
Ken
Olsen
Responds To Questions
The company that fills the world with
networking is the company that is going to be the survivor in the
computer business.
Today, we have the products, and they work. The
world needs networking. The challenge is to organize our products,
our selling and our planning. In the last few years, we made big
strides in getting the company to work together. Now, the
challenge is to put together all of the pieces and fill the world
with our kind of networking.
The goals we’ve laid out the last few years are
starting to show results. We have, to a large degree, one message
and one strategy. The results of our work show, to an amazing
degree, that the whole corporation is working in the same
direction. We've learned to use our resources and to work together
to become powerful. It’s a most satisfying feeling.
Networking and our ability to market and sell
it are key to our future sucÂcess. We have, for a long time,
spoken about our networking and what we can do for a customer's
entire organization. We said the software was important and, when
we had the opportunity, we talked about hardware. Now, finally, it
seems that the outsiders, like the press, are beginning to
understand that we have the software to network together all of
the pieces.
We often talk glibly about the wonders of
networking and all the things we can put together. But, the
results of the way we talk often turn out to sound superficial
because we skim over the details. We don't describe someÂthing
someone would buy. If you wanted to buy an automobile, you'd walk
out if someone only used glowing statements about the wonders of
driving, if they didn't tell you the simple things or tell you a
price and give you a delivery date.
Also, because we’ve lived with the advantages
of networking, there are things we take for granted and never tell
anybody. I'll take somebody who is interested in networking
through my office and never think to show them what we're doing
because it's what we've been doing for years. But, there are
things we should talk about. Some of them are complicated and
they're not the sort of thing you expect the customer to buy
immediately. But, if we'd document what we do have that's readily
available, they'd fall in love with it.
Customers are facing many problems related to
the overall complexity of what and how they do their work, the
pressures under which they must do it, and the specific problems
related to how to best incorporate change and new technology into
each of their operating areas. If they're in manufacturing,
they're concerned with productivity — trying to get their product
into the marketplace faster and at a lower cost. If they offer a
service, they need to manage their assets skillfully and ensure
that they're satisfying their customers with more convenience,
quality and service.
Because different computer systems are
effective for solving particular problems -- for meeting an
individual task within a department -- and because they were
acquired at different times and often from different vendors,
chances are they weren't designed to work together. Often, the
equipment from one vendor is not compatible with other equipment
from the same vendor. These are some of the problems facing
customers today.
Change doesn't come easily. Costly software
conversions are often necessary to increase computing power.
Sometimes a particular software package operÂates only on a
machine that's too small or too large for the desired task. And
it's certainly not easy if one task cannot readily communicate
with another task. Finally, it's clearly not easy if our customers
have to live with the likelihood that today's solution will become
obsolete tomorrow.
They need help. They need to protect their
investments, incorporate change and take advantage of new
technologies. They need to tie together those various automated
tasks commonly referred to as "islands of automation" if they're
going to achieve the productivity, service or quality gains that
are necessary for them to maintain their competitiveness.
Digital's answer is complete integrated
solutions. These are available today and expandable later. Our
approach to complete integrated solutions is based on four
important building blocks:
o the best networking — this means providing
the most effective way of tying together those islands of
automation while protecting the customers' investments,
o the best architecture -- this assures our
customers that they can take advantage of new technologies by
incorporating changes into what they are doing or maintaining
family compatibility across an entire network, o the most
applications (available from Digital, from Cooperative MarketÂing
Partners and from OEMs) — this includes a number of important
integration packages which help any application take full
advantage of the network
o the most expertise -- this means that Digital
is in partnership with our customers because we understand their
requirements. We have the ability to plan the network, and we have
the appropriate computer systems, applications and services. To
implement it all, we have the complete integrated solutions.
All of this equals a great degree of support
for our networking, our prodÂucts, our application solutions and
our services.
Today, we're taking the next step. We're
introducing seven standard network packages. They form the
platform to combine the strengths of those four building blocks.
They simplify the selling and marketing of our complete integrated
solutions.
I’m eager to speak to you today because I'm
speaking from a position of strength -- Digital's great strength
in terms of networking. Over the last three years, we have
installed more than 3,500 Ethernet-based local area networks with
over 35,000 computers connected to these networks.
By solving its own technical problems in
getting PDP-lls, VAXs, DEClOs and 20s to talk to one another,
Digital essentially solved years ago what other companies are just
now coming to terms with. It's the same problem as trying to make
equipment from different vendors talk to one another.
By incredible good fortune, or it may in fact
have been some vision, the architecture that's the basic approach
to the networking and computing that Digital developed to fit its
own needs is exactly what customers now want.
Digital's approach to peer networking and
distributed computing is an accurate reflection of the way people
work together within this company. Networking has become an
integral part of every one of our business and product areas.
At present we can support seven bridges in
series between any two stations. So we can build local area
networks which extend for 20 kilometers — far greater than
anything you're likely to need in the near future.
The design of this product minimizes human
intervention for management. You simply plug two Ethernet cables
to it and plug in the power cable. The bridge will listen to the
traffic on both sides, find out which addresses of stations belong
to which side, form a table internally, and then forward the
traffic to the appropriate side. No one has to to set up the
tables for it.
Competitors' products currently on the market
require an incredible amount of setup by humans to manage them. In
fact, as soon as the configuration changes -- even moving a
workstation or computer from one side to another -- somebody has
to come back and alter those tables.
Another Digital product, the terminal
server,connects computers and terminals. Typically, in the past,
terminals were connected directly to computers. Through Ethernet,
we can now offer a logical switch capability wehreby terminals
connected to terminal servers will logically connect to any of the
computers on Ethernet. This approach reduces by an order of
magnitude the amount of wiring needed. It also provides greater
functionality, allowing the person sitting at the terminal to
decide dynamically which computer he or she wants to connect to. A
terminal server that supports up to eight terminals is small
enough to be located in an equipment room on the same floor as
offices.
Another local network interconnect product,
DELNI, concentrates workstaÂtions. Up to eight workstations can be
connected directly to the Ethernet through the local network. By
use of the DELNI you can increase the number of workstations that
can be connected to the Ethernet cable without running out of the
number of drops.
A router permits interconnection of multiple
sites, located far from one another. Typically the connection
between the two routers would be through a leased line from a
common carrier. Each router can support multiple lines to multiple
site connections.
Ethernets implemented in different parts of an
organization in different cities could be connected together using
the router. Essentially that is our wide area network capability —
the mechanism for bringing the total corporÂate data sharing
together. This is another product which has been specificÂally
designed to minimize human intervention. IBM has a comparable
product which requires an incredible amount of management effort
to make sure that it will operate properly. In the IBM approach,
static tables have to tell the router which traffic has to be
directed to which location. When that configuration changes, in
the IBM case, the router has to be reprogrammed to tell it which
direction to take the traffic to.
In contrast, our router is adaptive — it will
find the most appropriate route currently available between two
cities. If it needs to go through multiple intermediate locations,
it will do so without human intervention. The ease of network
management with this approach makes it possible to successfully
build and maintain large networks without large expenditures for
the labor of network management.
Our X.25 gateway provides interconnection for
those customers who want to use a packet-switching service for
communication among multiple sites. Packet-switching services have
been gaining some momentum over the last few years, particularly
in Europe.
Another product, the SNA* gateway, can connect
systems on a DECnet network with systems on an IBM* SNA network. A
user on either network can access documents and applications on
the other. In fact, Digital connects IBM to IBM better than IBM
does. Somebody sitting at a Digital terminal can comÂpletely
access any document in an IBM machine, revise it, send it back,
and then access it through an IBM terminal and not know the
difference. No other vendor can provide that kind of integration
today.
DECnet
evolution
DECnet is 10 years old. It started as a means
of interconnecting VAX, PDP-11 and DECsystem-10 and 20 computers.
It supported VMS, RSX, RSTS, RT, Tops 10 and 20 operating systems
-- an incredible array of different operating systems to be
interconnected by one architecture. Since 1975, Digital has added
ULTRIX and MS-DOS* to that list. Every operating system we support
supports DECnet.
IBM today cannot support SNA on the IBM PC*
with MS-DOS. Yet we have been able, without any significant
problem, to support DECnet on the IBM PC withÂin a fairly short
period of time.
DECnet has also evolved to embrace Ethernet.
That has made it more powerful than any corresponding network
architecture by any other vendor, including IBM.
We've also embraced X.25 as part of DECnet, and
we’re now about to embrace the Open Systems Interconnect (OSI)
standards product from the International Standards Organization
(ISO) as part of DECnet.
In other words, the DECnet architecture has
been designed with flexibility, so it can evolve over time as
changes in technology and standards occur.
Digital itself now has the largest private data
network in the world, with several thousand CPUs connected. On an
average day, individuals can reach 40,000 other users
instantaneously.
In addition to DECnet, Ethernet can be ordered
on any computer Digital curÂrently offers. Contrast that with the
IBM token ring, which is supported only on IBM PCs.
In other words, our products are more
competitive than anything else that's currently being offered. The
reason is fairly simple. We have been making Ethernet products for
three years, and we are at the second generation of those
products, using the VLSI capability. So our products are more
comÂpact, more reliable and less expensive.
And we know that the corresponding IBM
capability will not change for several years until the
corresponding VLSI chips that go into those products have been
redesigned. So we have an opportunity to exploit our strength that
cannot be matched by any competitor.
Every implementation of DECnet that we make
includes the ability to provide mail service among workstations
and computers, file transfer capability between two computers, a
virtual terminal capability whereby a terminal connected to one
computer can log into another computer located somewhere else in
the organization. Block access and record access facilities permit
a portion of a file to be accessed remotely (without the need to
copy over entire files). And DECnet offers program-to-program
communication, which is only just being recognized by IBM as one
of the capabilities required on the token ring.
How does DECnet compare in terms of
architecture with IBM's SNA? The differÂences between DECnet and
SNA stem from the computing environments in which they were
created. DECnet was designed from the outset in the early 1970s
for distributed processing, to allow many autonomous computers to
communiÂcate and share resources. SNA derives from the traditional
centralized and hierarchical IBM transaction processing
environment. The user enters the data from the terminal into a CPU
which processes the data. SNA is still primarily used in such
contexts. That means SNA emphasizes interconnection of terminals
to computers, not computers to computers.
Today, customers are demanding more networking
capability from IBM. And we should be in a position of strength
now to win those accounts.
DECnet has a peer-to-peer network protocol, in
which all systems have equal network capabilities. This means
access to open files on demand. And each system in the network has
the software to exchange messages, transfer and receive files, and
engage in program-to-program communication.
Our vision of distributed systems has evolved
into connecting multiple sites and multiple styles of computing —
as we do within Digital. Networking is now the central theme of
almost all of Digital's products. It's a part of the Digital
computing environment.
Standard
Network Packages
Digital has now developed seven standard
packages to make it easier to sell networks. You will be able to
order any standard package with a single order number.
The first package addresses the needs of the
work group using either terÂminals or personal computers. This
package is a low speed interconnect wire (twisted pair wire) going
from the desktop to the equipment room. And the equipment room
contains from one to eight terminal servers, and a local network
interconnect — all in the same closet.
The second package is for connecting to PCs and
workstations through a 10 Mbits/sec. Ethernet thin wire cable. The
thin wire cable will run between the offices and the equipment
room. And within the equipment room there will be up to eight
multiport repeaters and one local network interconnect. This setup
will serve up to 64 offices.
Package three is for interconnecting between
the work groups on the same floor, in other words interconnecting
the equipment rooms on the same floor. It can handle up to 128
different closets.
Package four uses the fiber optic bridge. This
would typically be used to interconnect between different
buildings or between floors within a buildÂing. It isolates the
local traffic on each floor. And since the fiber optic cable is
immune to electromagnetic noise, where the electromagnetic noise
is a problem, for instance in buildings with elevators and heavy
power equipÂment, this is the most appropriate solution.
Number five is a computer room package whereby
several computers can be connected to the Ethernet cable by using
the local network interconnect. It connects up to eight different
computers to one another. It also isolates the traffic between
those eight computers without propagating it to the Ethernet.
Number six permits inter-network connection
between a Digital network and an SNA network or an IBM machine.
With one order number, this package will cover all the software
and hardware and cables needed for that interconnecÂtion. This
package would typically go either into a computer room or into a
basement from which the leased lines would emanate to other
buildings or to other sites.
The seventh package is a DECnet router or an
X.25 gateway — both of which use essentially the same hardware.
Either will connect to remote sites using a common carrier leased
line between those sites. It’s also permisÂsible sometimes to use
the common carrier to interconnect two nearby buildÂings, but we
typically avoid doing that by installing our own fiber optic
cable. So instead of paying the tariffs to the phone company, the
customer pays the capital expenditure to Digital.
If we wanted to connect two buildings at one
site together, it should be fairly easy to order one standard
package and install it and know that it's going to work because we
have already verified that that particular combinÂation works.
Typically, networking is fairly complex to
engineer. But Engineering is responsible for masking that
complexity from the Sales, Marketing, Service and customer
environment. These packages provide the simplicity that Sales
needs.
Digital's networking products have no peers at
this point in time. Digital is the largest user of networks in the
world, with the most experience. Networks are squarely at the
heart of the technical expertise that has made Digital the company
it is.
(Peter Smith introduced the next five speakers.
"We've talked to you about the marketing strategy base behind our
complete integrated solutions and Mahendra has proÂvided some
technical detail. Now we want to show you how those seven standard
network packages can lead to actual solutions for customers. Henry
Ancona will talk about office, Rose Ann Giordano about MIS, Jim
Dale about manuÂfacturing, Bill Steul about engineering and John
Mucci about science and laboratory applications.")
Networking is the key to success in the office
market. This fact relates to three trends in today's market.
First, prices per user are dropping. Second, customers are looking
at the IBM PC in a new and sometimes harsh light. And, third, our
market is becoming increasingly high-touch, nonÂtechnical .
Prices per user are dropping at the rate of
about 25% per year so we have to increase the number of users we
sell to by 25% every year just to keep our revenues flat. And
that’s not good enough. We have to address a whole new mass market
and find easy ways to sell to them.
Meanwhile, users are discovering that
standalone personal computers which aren't linked with the rest of
the organization create rather than solve problems. PC users need
to share documents, resources and mainframe data. This is why
networking is critical to the office market. Networks can increase
the number of system users and make PCs much more functional.
To sell networking in the office, we need to
make it simple. We need to speak the language of this
non-technical and very large mass market.
Digital networking is easy. All seven of the
standard network packages play a role in office networking because
people in offices must have total communications capabilities
among departments, throughout the building, among buildings and
with IBM mainframes.
But the three main packages for this market
are:
o package one, which links terminals or
low-speed PCs to MicroVAXs;
o package two, which links high-speed PCs to
MicroVAXs; and
o package three, the floor environment package
which links MicroVAXs to MicroVAXs.
What are the problems that people in offices
need to solve? They write memos and reports — that’s word
processing. They distribute these memos and reports — that's
electronic mail. Sometimes they do budgeting or cost accounting —
that's spreadsheet. All of these activities require data access
capabilities. So through networking, we can help the individÂual,
work group, department, division or entire corporation to be more
effective.
We have a product that’s easy to install and
use. You take the module out of the box, wire it into the network,
and you are ready to go to work. It
can expand from one user to tens of thousands
of users with the addition of standard modular building blocks.
MicroVAX II is a modular building block which
comes fully equipped with Ethernet and DECnet support. And for the
office, MicroVAX ALL-IN-1 offers all the functionality of ALL-IN-1
in a compact under-the-desk package.
ALL-IN-1 is the most popular integrated office
system in the market today. And we’ll soon be announcing a new
version of the product which makes it even easier to offer
customers networking capabilities. It comes complete with services
and is easy to install. You don't need a systems manager to get it
up and running. It's equipped with Ethernet support to simplify
network configurations.
You can start with a MicroVAX ALL-IN-1 system
and use package number one to link VT200s and low-speed PCs to it.
Then you can add packages two and three to link to high-speed PCs
and MicroVAXs. As you grow, you keep on adding. You can end up
with a network that has tens of thousands of users.
In other words, our office networks consist of
modular building blocks that are simple to sell, simple to order,
simple to install, to use, to move, to expand. No other company is
in a position to offer this kind of expandÂability and
interconnectability.
Today we have an opportunity to win significant
business in MIS applicaÂtions. The computer products and services
that MIS directors buy account for about $50 billion a year.
Digital has a small but rapidly growing share today in this
marketplace; our goals are to become the leader in inÂtegrated
information systems, and to be recognized as the alternative to
IBM for corporate-wide information systems. Our superior
networking capaÂbilities are a key strength for accomplishing
these goals.
What are the major issues facing MIS directors
today, i.e. what's keeping them awake at night? There is
tremendous growth in end-user computing. Business professionals
are demanding more capabilites and services from MIS departments.
At the same time, the maintenance and need for more producÂtion
systems continues to accelerate. With this double burden, MIS
directÂors have a great need for improved programmer productivity.
Data must flow quickly and transparently throughout the
organization. They have to merge their office automation and data
processing systems. Their challenge is to help change voluminous
amounts of data into useful information.
If you look at the mix of applications provided
by MIS directors today, about 80% are production systems and 20%
end-user systems. By 1990 that mix will shift to 50% production
and 50% end-user. That shift in applications represents a big
opportunity for Digital.
First, since the applications are new, no
conversions are required. Second, the new end-user applications
are interactive and on-line. They are the kind of applications
that require the style of computing that Digital has been
promoting for 28 years. Third, the viability of these end-user
systems depends on data gathered from the production systems. The
vehicle that makes this data available to the end-user systems is
networking, and Digital has the best networking in the industry.
Digital has many solutions to satisfy the needs
of IS. One example is the VAX Information Center, which is a
complete Digital solution for helping IS directors satisfy the
needs of their endusers. The VAX IC uses our standard hardware,
software and services to provide a complete solution to a common
MIS problem. The VAX Information Center allows the business
professional access to corporate data in a manner that preserves
the inÂtegrity of the production data base. It allows access to
internal as well as external data bases. It has tools for data
analysis, query and reportÂing. Now, our standard network packages
are going to make it a lot easier to configure and order a VAX
Information Center.
One good example of an MIS customer is the
Mercedes Benz North American subsidiary, which runs all its
administrative systems on VAX computers. They have different size
VAXs distributed throughout North America, primÂarily running a
parts distribution application. They have begun to install
MicroVAXs in dealer locations to provide customer data for
warranty and reÂcall. They’re also committed to wire their two
subsidiary headquarters netÂworks with Ethernet. Theirs is a
multi-vendor, worldwide application, beÂcause they transmit parts
replenishment information via satellite to their IBM data center
in Stuttgart, West Germany.
In summary, our overall strategy for IS is to
augment, not replace, IBM; to compete aggressively for the
high-growth new applications, to compete seÂlectively for
production systems, and to gain leadership in networking and
programmer productivity applications.
Manufacturing productivity is one of the
hottest issues for Digital's customers. Semiconductor customers in
Boston, automotive customers in Europe, and aerospace customers in
California all have this common need to increase manufacturing
productivity.
They have four business goals: reduction of
costs; reduction in time to market for new products; improvement
in their services and delivery systems to their customers; and
improvement in the quality of their products.
There are two ways to apply computers to help
them meet these goals. To improve the quality, they will certainly
use computers in machine autoÂmation. To reduce costs and time to
market and improve service and delivÂery systems, they need free
and easy flow of information for decision making within their
manufacturing areas. In other words, they need to tie together the
islands of automation and information within their companies.
Networks are key elements in accomplishing this
integration -- networks that are simple to understand and to use.
There are three basic manufacturing areas:
management, shop floor and distribution. In manufacturing
management, most people use an MRP (ManuÂfacturing Resource
Planning) system for plant capacity planning, scheduling products
and maintaining bills of material. For this application, a
comÂpany would probably start with a couple of VAXs in a computer
room -- one running an MRP system, and the other running an
ALL-IN-1 system for general mail and for communicating the
decisions made as a result of the MRP analyÂsis. An Ethernet could
link this area with people in capacity planning and material
requirements departments. To let corporate offices know what's
happening at the plant, they might add an SNA gateway to go
directly to the corporate office. And they might add a bridge to
the shop floor to let them know the results of the planning --
when and how many to build. Another bridge could go to the
distribution area so the MRP system will know when something is
shipped. Another bridge could extend to the engiÂneering area to
get updated bills of material.
In the shop floor area, where the products
themselves are made, there’s a control room with a couple more
VAXs running multiple applications, such as traceability, job
costing, machine maintenance, quality management and shop floor
control programs. To give shop floor personnel access to that
inforÂmation for better decision making, they could add a couple
of terminal servers for the expediters, the quality control people
and the shop floor people themselves. To that, they could add a
MicroVAX II cell controller running a specific application, such
as fault detection, and connected to various shop floor equipment
such as programmable logic controllers or robotics controllers.
In the distribution area, a single VAX could be
running a distribution management program to keep track of the
inventory, produce requisitions, and plan for shipping and
internal traffice. A couple of terminal servers here could give
people in traffic and inventory control access to this
information. They could add another MicroVAX II for inventory and
provide a router out to remote warehouses, putting inventory
information closer to the customer.
We can build these three systems and link them
together using our standard network packages. A network like this
would give a manufacturing company the free and easy flow of
information for improved decision making between functions within
a department, between departments, to remote warehouses and back
to corporate.
Digital has many systems in use today in
engineering departments around the world. We've sold well over
15,000 VAXs to do engineering design and analysis. Many VAX
engineering systems in use today are already networked. There are
over 2,500 Ethernet networks in use in engineering today and 800
clusters.
A typical engineering network includes a large
VAX or VAXcluster, terminals and terminal servers, MicroVAXs,
VAXstations, printers and plotters conÂnected by a DECnet Ethernet
network. Often there is a gateway to an IBM or Cray machine.
Applications typically include mechanical design, electronÂics
design, analysis, software development, documentation, engineering
data management, electronic mail, spreadsheets, and project and
financial management.
Productivity is the overriding concern of
engineering departments. How can they get their products from the
idea stage to revenue-producing volume production in the shortest
possible time? The company with the shortest product design and
engineering cycle has a competitive advantage in any industry.
Digital's computing, data management and
networking products provide the support that advanced engineering
organizations need. With distributed computing systems, the
functions of engineering can often be done in paralÂlel rather
than in sequence, speeding up the overall engineering process.
Typically, engineering departments have had
computer rooms, to which design stations and terminals are
attached over low-speed serial lines. The systems are often
overloaded and unable to handle efficiently the number of users
and the multiplicity of engineering and computing tasks demanded
of them. To solve this problem, Digital could replace the
processor with a larger one or add a cluster or could off-load the
departmental system by distributing the computing to where the
work is being done. Distributed MicroVAXs can provide the same VMS
and ULTRIX computing environment and the same data and
applications at the engineers' desks without losing access to the
departmental system.
Let’s take a look at how a typical engineering
department could use our seven standard networking packages to
distribute computing power. Package number five could connect the
VAXs in the computer room together. Packages six and seven could
link this department to corporate IBM mainframes and to the
company's wide area network. The floor package, number three,
provides a local area network link to the low-speed package
(number one) and the high-speed package (number two) distributed
work group computing environÂments. Where engineering groups are
located on more than one floor, a building package, number four,
can tie them together.
On a distributed software development system
with Digital's networking utilities and high-bandwidth Ethernet,
programs can be tested and downline loaded to users quickly and
efficiently. They can be maintained easily. Revisions can be
distributed across the network quickly and reliably.
Off-loading the technical documentation effort
to a dedicated MicroVAX enables the technical writers to
accomplish their work without impacting the design effort on the
department system.
The network connection can also be used by the
program management group. In other words, the program manager and
staff can plan, schedule and conÂtrol engineering projects on a
dedicated MicroVAX connected to the network and everyone on the
network will have up-to-date project management information.
Application software like EDCS, our new
engineering data control system, provides the ability to control
and change an engineering drawing set. Our
VTX videotex software can provide the basis for
an on-line standards library.
Engineering program managers can use ALL-IN-1
for departmental communicaÂtion, business plan documentation and
financial planning. And wide area network links can enable
purchasing, manufacturing, finance, sales and marketing to have
access to engineering information and to work closely with
engineering to improve the productivity of the whole organization.
These are a few examples of how Digital can
provide highly productive, flexible computing environments for
engineering. We have made the job of networking and sharing
information easy. The beauty of these products is that they're
available today and the network can grow smoothly as the needs of
the engineering department and the corporation grow.
In the scientific and research business,
customers have been networking for 14 years. Scientists and
researchers take the need for networking for granted because the
scientific method involves collaboration and the need to share
data and resources.
Also, since scientific customers are
innovators, they are often the first ones to purchase our latest
products, field test them and then use them to develop innovative
solutions to their problems. We've learned from their experience
and learned how to take the best of what they do, commercialize it
and create standard packages that we can sell in commercial
markets.
For example, let’s look at the Central
Scientific Industrial Research OrÂganizations in Australia. They
started networking with Digital products way back in 1971, with
five nodes in five sites. Over a period of five years they
expanded to 47 nodes. Today they have more than 120 nodes and many
thousands of users.
Another example is Brown University. They were
designated by the U.S. DeÂpartment of Energy to build a subsystem
for one of the large accelerators near Chicago, a system to do
data acquisition and analysis. They used our standard network
packages to connect 50 MicroVAXs with lots of Ethernets to perform
a sophisticated compute function that couldn't be done any other
way.
The Lawrence Berkeley Labs was a field test
site for the VAX 8650. They have an 8650 and all of Digital's
standard network packages. Actually, they're so happy with their
configuration that they now include the stanÂdard network package
concepts in their specifications.
In the area of "production science," the
R&D operations in Fortune 500 companies and in government,
where they're trying to get their data analyÂsis and data
reporting all integrated into one system, we have a strategy
called "Integrated Lab Automation." We take the data from data
acquisition
systems and data bases that have regulatory
standards and reporting standards and communications and put that
together into an applcation. Here, too, our new network packages
are very helpful.
Basically, whether you're selling to the
Einsteins of the world, the big science customers, or small
commercial labs, Digital makes it easy to configure networks to
meet the customers' scientific computing needs.
The seven standard network packages and the
complete integrated solutions are intended to make objective and
predictable the kind of sales that have been problematic up until
now. With these packages, Digital can take care of about 80% of
the sales that have to be made, without a lot of extra technical
training.
For local area networks inside a building, the
typical customer looks primarily at the cost of the equipment —
which is a capital expense. But that changes as they consider wide
area networks. Common carriers levy communications tariffs based
mainly on the volume of traffic, and the customer has the problem
of managing this cost.
With Digital's wide area networks, the customer
has the ability to adjust to the current tariff structure without
affecting current applications. This capability is based on the
fundamental elegance of our network systems that no one else can
even talk about. Because of our network architecture, applications
investments can remain independent of the communications
technology which is underneath.
For instance, let's suppose a customer who is
using an X.25 gateway, which is highly cost-effective for file
transfer, wants to add an electronic mail application. Then leased
lines would be the better choice because the increased volume
would mean a lower tariff structure. Digital offers the capability
to change from the X.25 gateway to leased lines without changing
the applications code. In other words, we offer a dramatically
more flexÂible system enabling the customer to make cost-saving
choices and changes.
Telecommunications managers are particularly
concerned about tariff cost. Their job is to determine the most
cost-effective means of running their network. They have to
perform a cost/benefit analysis based on the proÂjected volume of
the applications they need to run. But, typically, they presume
the design of a network is a function of the application that’s
running. They think that if you add a new application, everything
changes. We have to explain to them that that is not true with
Digital, that our networking software is independent of the medium
that's being used for the transmission.
With IBM's SNA network, there's a paralyzing
halt for new network generaÂtions. IBM is very limited in terms of
their function and the ability to change easily. Their remote
terminal entry or terminal emulation is a much more complex scheme
than our simple approach. They make telecommunications a customer
problem. So all you need to do to convince a telecommunications
manager to go with a DECnet-based network is ask how hard it is to
change with IBM's SNA network and then show how easy it is to
change with Digital.
We have solutions for everyone within a
building and for multiple buildings — local or global. We can
extend that same distributed computing environÂment regardless of
the location. In summary, we offer one highly flexible network on
which you can run all your applications.
We have the most powerful capability in the
industry. We have leadership products, services, and now complete
integrated solutions built on system network packages which are
easy to understand and to order.
This morning we talked about customers, about
their environment and their need to accommodate change, and about
our complete integrated network soluÂtions. Now we want to show
you how we in marketing are organizing to help you capitalize on
these opportunities.
The job of Marketing is:
o to provide complete, highly integrated
solutions that meet worldwide customer requirements;
o to focus those solutions on real customer
needs;
o to market all of the company's product
solutions through appropriate direct and indirect channels; and
o to adapt those solutions to local geography
requirements.
Each of these components needs to build on the
others and reinforce the others.
To assure that we are building the complete
solutions that customers need, we have strengthened the alignment
between product development and applicaÂtions marketing,
establishing a "Product Marketing" organization.
Secondly, we decided to enlarge, enhance, and
strengthen our industry marÂketing focus -- to posture our
complete solutions from an industry point of view and further
strengthen marketing support for the Field. That's managed in part
by Bob Hughes, Jerry Witmore and Harvey Weiss, reporting to Jack
Shields.
Thirdly, to simplify and streamline our
channels way of doing business, we have focused a channels
marketing group on reinforcing and helping to impleÂment the
strategic partnerships of both product marketing and industry
marketing. That’s managed by Jack MacKeen.
As we do this, we want to continue to
strengthen our geography and local marketing so they can take
advantage of these corporate marketing functions. And we want to
make sure that our traditional lines of field support stay intact
as we evolve this product, industry and channels marketing
approach.
I stress the word "evolve" because we've been
at this for over nine months. Bob, Jack, Harvey, Jerry and I have
focused on the details of how to support
the Field, how to work with Engineering, how to
acquire applications, how to run trade shows and so forth.
Product, Industry and Channels Marketing are
like three legs of the same stool -- reinforcing one another.
Today, I'll describe Product Marketing, Bob will talk about
Industry and Jack about Channels. Then Bruno D’Avanzo will talk
about geography and, in particular, European marketing.
Product Marketing is really our nickname. Our
formal name is "Complete Integrated Product Application Solutions
Worldwide Marketing."
"Complete integrated" means that we care that
all the pieces are there — the hardware, software, applications,
networking and services. And we care that the programs and the
support are there to help sell those capabilities.
"Product applications" means we don't just take
the application and put it on top of a base product like frosting
on a cake. Rather, the application is a key ingredient in the
total solution. We build the base product to perform a set of
applications. Those applications may come from Digital or they may
come from a Cooperative Marketing Partner or from an OEM. But we
design the product, package it, price it and then introduce it
from the standpoint of how it solves an application problem.
"Solutions" means it does something for a
customer. In other words, we have to work closely with industry
marketing to understand customer needs. And we have to have a very
tight conduit between ourselves and the Application Centers for
Technology to understand how our solutions are being used and
implemented by customers.
"Worldwide marketing" means we care that the
complete products meet worldwide customer requirements. It also
means we care about the marketing programs, support tools and
programs that are available to help sell these complete solutions
in the Field.
For example, packaged ALL-IN-1 systems which
have been tested, tuned to and properly configured for MicroVAX II
are complete integrated product applicaÂtion solutions for which
you can expect worldwide marketing support in the form of
comprehensive sales tools and support through our image
advertising and through worldwide Office Solution Centers. The OIS
group, along with all the other groups, are supporting and feeding
these solution centers as our main conduit to demonstrate complete
application solutions.
You heard from five application areas this
morning -- Science, Office, Engineering, Manufacturing and MIS.
The sixth major component of our product marketing focus is Small
Business, which because of its unique distribution and sales focus
requirements is in Jack Shields' organization.
All of these groups are building their complete
integrated solutions around the building blocks we talked about
this morning — our advantage in netÂworking, the consistency of
the VAX VMS architecture, world-class appliÂcations and product
applications expertise.
Industry Marketing starts with a few
assumptions:
o The market for Digital products is totally
elastic.
o We don't know our customers well enough to
capitalize on the opportunities facing us, but we know pieces of
them. We know the CAM piece, the office piece, and the lab piece;
but we don't know our customers as total entities.
o It makes sense to focus some of our marketing
on the total customer comÂputing environment.
Industry Marketing is additive. It's an
enhancement to the marketing that we continue to do around
products, applications and channels. Jerry Wit- more, Harvey Weiss
and I manage U.S. Industry Marketing. Our primary focus is in
support of U.S. Sales. When asked for help from GIA and Europe,
we'll give it. When U.S. international accounts require
coordination across boundaries in a marketing sense, we'll give
it. But our priority is U.S.
Basically, we are organizing parts of our
marketing around certain classes of customers to learn their
language. We want to package products by industry and promote them
by industry. We want to put industry-oriented support teams,
applications support, sales support and management tracking into
the Field. We want to train the sales force by industry.
To the extent that we can train people on what
drives American business, what issues keep our customers awake at
night, we will be more successful.
We also want to influence Engineering. For
example, with some relatively minor changes, could we turn our
electronic mail product into an electronic funds transfer product?
Could we turn our ALL-IN-1 system for Sales and Marketing into a
loan officer's workstation or a telecommunications managÂer's
workstation, thereby opening new opportunities?
Our objective is to sell more of what we have
to more people. Obviously, we are concerned about doing things
that increase the company's profitÂability, but we would like to
drive market share as a corporate goal.
We believe that industry marketing is the only
marketing function that sees all of the products and all of the
marketing across the company and has a total-customer view of the
world.
We need to better know our customers. In the
U.S. Digital has 34,000 accounts. Of those accounts, 3,400 gave us
90% of our business last year. 460 of those were Fortune 1000
accounts.
There are 5,411,000 companies in the U.S. —
partnerships up to large corporations. Eleven thousand of those
companies represent 80% of all U.S. computer purchases and 80% of
all U.S. employees. The focus of U.S. industry marketing is those
11,000 companies.
We categorized those 11,000 companies into 62
industry segments. And then we arranged those 62 into 12 industry
groups and split those into Service Industries, Basic Industries
and Government Industries for management purposes.
Service Industries include airlines, banks,
broadcast companies, insurance companies, printing and publishing,
data services, trucking and shipping companies, utilities,
churches, newspapers, law firms, consultants, enterÂtainment
industries, wholesale and retail distribution, and transportation
services. We are going to track our performance around all 29
industries in that category, and for the next year we are going to
"focus" on four or five of them.
"Focus" means there will be at least five
people with expertise on applicaÂtions in that industry putting
together analysis, marketing programs, and support programs for
that industry. We'll start with banks, telecommunicaÂtions
companies and newspapers. We'll also put some effort into
insurance, data services and airlines.
Basic Industries includes all the companies
you've known and loved over the years. There are 32 industries in
this group. We will track our performÂance in all 32 and will
focus on four or five, such as aerospace, automoÂtive,
electronics, petrochemicals, education, and medical. And we will
begin to develop business plans for some of the other promising
opportunities.
In Government, we will track four industries
and focus on four.
About 50 percent of all computers and services
installed in the U.S. last year were in what we’re calling Service
Industries. Over 40 percent was in Basic Industries. The rest was
in Government.
Service Industries are growing faster than
Basic Industries in terms of their acguisition of computers and
software. But in Digital only 31 perÂcent of our sales go to
Service Industries and 53 percent go to Basic Industries, with the
balance going to Government. In other words, in Basic Industries
we're growing faster than the market, so we're taking market share
away from the competition. But we're losing market share in the
fastest growing industries -- the Service Industries.
The top revenue-producing industries for
Digital are:
o Federal Government, where we've had an
industry marketing focus for several years;
o Telecommunications, where we've had an
industry marketing focus for the last year and a half;
o Aerospace, some of which is a by-product of
our government business;
o Education, where we've had an industry focus
for a year and a half; and o Data Services, primarily because
we've treated those customers as OEMs.
At the bottom of the list of Digital's revenue
rankings in FY85 comes airÂlines. We did just $7 million of
business in airlines last year. As a company, we spent over $60
million on airline tickets. IBM got $1.2 bilÂlion of revenue out
of that industry.
Two up from the bottom of the list is food,
beverage and tobacco. that happens to be the second-largest
industry in the world. We did $28 million there. The largest
supplier of food in the Greater Maynard complex reÂceived over $42
million from Digital last year.
You begin to get the feeling that there's a lot
of potential out there. We just have to unleash ourselves and
start thinking a bit differently to take advantage of these vast
opportunities.
We believe that the total worldwide market for
every aspect of the computer business -- hardware, software,
services, solutions, the after-market, comÂmunications, networking
— might approach $600 billion in 1990. To deal with an opportunity
of that magnitude, we have to leverage all the appropriÂate
channels in a disciplined manner so that we truly support the
company's total push for growth in the computer industry.
In the past couple years, significant changes
have taken place in the market. The advent of powerful technology
available at very low cost is causing both the vendors and the
third parties to redefine value-added relationships, to re-think
how third parties should be used and managed.
Base technology is now assuming many of the
capabilities previously done by third parties. With overall costs
rising, end users are seeking solutions from computer vendors in
addition to or in place of the tools that have traditionally been
provided.
Digital's response to these realities is the
continuation of an evolution that began several years ago. It
began with the expanded roles of subsidiÂaries in Europe. It was
followed by the movement of operational responsiÂbilities in the
U.S. from the product groups into Management Centers. And we
continue it now by integrating our indirect marketing activities
into the total corporate strategy.
The Channels Marketing role becomes one of
mapping and leveraging our chanÂnel partners and their skills and
applications into our corporate strategies so they are
complementary to our direct marketing thrusts. Today third parties
are the source for more than half the applications needed by
customÂers in the specific industries we're focusing on. We think
of these people as strategic partners.
In addition, we work with a variety of
marketing partners -- primarily OEMs -- to insure penetration
across diverse markets where Digital has no direct market focus
and may never wish to focus. These represent the classic
marÂketing partners which, in a number of cases, we have known for
many years — typically, equipment OEMs such as GenRad, Teradyne,
Cincinnati Milacron, Fluke, etc.
Our "all-channels strategy" simply recognizes
that no company can afford to be all things to all people. It also
builds on the fact that high volume leads to economies of scale,
and the fact that channels have historically been an important
strength for Digital.
In addition, an all-channels view of our
business helps bring our marketing and sales efforts into
strategic alignment.
We have an account base of well over 3,000 OEMs
and channel partners that provide to the marketplace in excess of
6,000 application solutions.
There are about 550 Digital sales people
calling on our OEMs. And those OEMs field a sales force
approaching 12,000 sales representatives — or a leveraging factor
of about 22 to 1. Those 12,000 people are selling Digital products
or Digital-based solutions.
We in Marketing must lead the company in
determining what mix of channels is optimum. And Sales must be
involved in the final determination of suitabilÂity within their
given geography.
For example, in real estate, it's unlikely that
Digital would sell directly to small real estate agents. We would
tend to reach those customers through one of our indirect
channels, such as our relationship with Century 21 in the U.S.
If we look at the overall mix of business that
flows through channels today, about two thirds of it we would
identify as supplementary. About one third of it overlaps with the
end-user thrusts as we have presently defined them.
Our goal is customer satisfaction. We’re moving
from a focus on just satisÂfying OEMs or channel partners to a
goal of ensuring that the end users are satisfied with the
solutions they receive from these channel partners. That causes us
to have a much different view of and concern for the way our
chanÂnel partners run their businesses.
Years ago we only had two channels. We sold to
OEMs and directly to end users. Now we have a multiplicity of
additional channels, such as distribuÂtors and dealers. We need to
manage all our channels so we have satisfied end users regardless
of how the product or service or solution got to them. That’s our
challenge.
We are in the worldwide market. No large
international customer will ever talk to us if they don't see that
there is a long-term corporate strategy behind what we do. So it’s
important that we have one corporate philosophy which is very
simply stated but very powerful: one company, one strategy, one
message.
In Europe we operate in 18 different countries
and have 12 major languages. In all those countries and all those
languages we say:
o We are the second largest computer company.
(That statement attracts attention — the curiosity and sympathy
for the underdog. Especially if we do it in a non-arrogant way.)
o We are an open, friendly company. (And we
prove that with our networking, which is based on an open
architecture.)
o We are dedicated to providing systems and
solutions to help customers increase their competitiveness. (We
position ourselves as the partners for our customers.)
In Europe we operate according to a total
industry plan which looks at the total application portfolio and
says: this application we're not going to touch; that one we're
going to do direct; and this we’re going to do with a partner*
That industry plan is delivered to the sales force which then goes
to the customers.
That’s very much the way U.S. Industry
Marketing now works, only in Europe we started a bit earlier.
In the old days, the sales force used to do the
integration work. Now the integration work is done by industry
marketing. The whole idea is to make the sales force more
productive so they can sell more.
In FY85, 55 percent of the total computer
market was hardware, 19 percent systems maintenance and 26 percent
software products and other services. At Digital the percentage of
hardware sales is much higher. Historically, we've sold at the
component level, at a low level of integration; and we've done
very well with that. But the projections for the computer market
in FY91 show the percentage of hardware going down -- still
growing, but not as fast as the total industry. And we can
extrapolate from that what Digital will look like in FY91.
In terms of customer needs in the total data
processing industry, there's a natural pattern of growth beginning
with a technology base, moving up into component level (CPUs,
memories, disks, and terminals), then into systems and networks,
then applications, then to services. Between FY85 and FY91, we
anticipate a continuous move upwards of the offerings in the
industry. You will still need components and the various elements,
but the key to growth is the ability to migrate upwards in
applications and services as well. The big money is going to move
upward toward those growing customer needs. A big part of these
new needs will be Network Services, where a big fight will take
place between IBM, AT&T . . . and Digital.
At the same time, the product differentiation
of suppliers will depend heavily on how much added value they can
give to technology. The component level is going to be handled
like commodities. It’s going to be much more pricing sensitive,
with less profit potential. The profit will be higher in the
services area.
To prepare for these coming changes, we have to
build an infrastructure in the Field. One major program in Europe
we call the "High Value System Program". With the help of MIS
people in the U.S., we’re putting a complete marketing program in
place for sales of large systems, which will address such issues
as industry focus, application focus, and existing accounts versus
new accounts. We'll talk about networks. We’ll address the
applicaÂtion part through usage of Cooperative Marketing Partners.
We're putting tremendous effort into this program, creating at the
district level Large Systems Selling Groups which provide support
to sales units. We'll also proÂvide support at the area level from
our technology center in Valbonne, France.
We believe that our networking architecture is
ideally suited for interÂnational customers, who have a need to
operate at personal level, at departÂmental level, at city level,
at country level and worldwide. The more comÂplex their business,
the more need for highly integrated systems, connected via Local
Area Networking (LAN), Metropolitan Area Networks (MAN), Wide Area
Networks (WAN), International Wide Area Networks (IWAN). We have
developed these capabilities in-house better than anybody else and
we can now apply them to our customers' needs. We don't need to
own all the components, but the ability to put it all together.
Basically, we've got the products, we've got
the architecture. We've got the vision. We can do what our
customers want us to do. The only limit is our imagination.
It is essential that we convey Digital's
strategy and specifically our network message to our customers. To
do this, we have enhanced our literaÂture, advertising and product
announcements and have developed tools for the sales organization
to help them communicate our strategy.
Historically, we took a menu approach to
selling. We'd tell our customers about all of our products and
services, and then ask them to integrate those products and
services to develop their own solutions. Many times our
cusÂtomers, who were quite technically advanced, were able to
perform this inÂtegration. They were able to understand our
products in detail, and were willing to do what was necessary to
tailor our products to fit their needs.
Since that time, the marketplace has become
larger and more complex. We're dealing with a lot of customers who
are technically less sophisticated, and we're talking to people at
higher levels of the organization. Now, in many of our accounts,
it is the senior managers who are making very critical deÂcisions
about what systems and networks are installed. They want us to
talk about products, not just in terms of features and benefits,
but in terms of complete integrated solutions — how we can solve
their business problems. To deliver a complete integrated
solution, we have to talk about our customÂers' applications,
about networks to tie the applications together, and about the
services needed to support the environment.
Our new advertising campaign emphasizes how we
differentiate ourselves from the competition. Unlike other
companies that promise futures, DIGITAL HAS IT NOW. Digital can
deliver many complete integrated solutions today.
We've got to make that point at every
opportunity with our customers, otherÂwise they won't be able to
separate what's real from what’s only being promised. You'll see
the "Digital has it now" theme in all of our advertisÂing.
Initially we are using testimonials to get the message across. The
ads describe specific examples of our customers' implementation of
our computers as integrated information systems. "Digital has it
now" is also the major theme for DECworld '86.
We have to be consistent with our advertising
and literature messages. For example, to simplify our message to
our customers, we will soon be publishÂing a single VAX brochure.
It will clearly position each member of the VAX family and
suggested markets and applications for which each VAX is
particuÂlarly well suited.
In the past, we've had many different
approaches to product announcements. We should remember that each
announcement is an opportunity for us to talk to the press,
analysts and our customers about our overall strategy and
mesÂsage, as well as to describe the features and benefits of a
particular product. The Announcement Strategy Committee has been
working hard to coÂordinate all of our announcements in the
context of the Digital strategy message. For example, at the VAX
8650 announcement we stressed Digital's superior networking,
computer architecture, world-class applications and experience,
and how the 8650 fits into the strategy. We will continue to
stress the overall Digital message at future announcements.
Our sales people hold the key to communicating
the Digital message to our customers. To assist them, we are
developing the tools they need to articuÂlate the Digital strategy
message. The first of these sales tools is a presentation for
senior managers on the Digital strategy. This has been delivered
to the District Sales Managers.
We have also enhanced the Digital Sales Guide
by updating the format of the Applications Roadmaps. The roadmaps
consolidate information about where to sell our products in
different markets and industries.
To improve the roadmaps, we made networking
solutions an integral part of this sales tool. We also developed a
decision tree format which makes roadmaps more concise and easier
to use. Hardware, system software, netÂworking hardware and
software, applications software, and services are recommended for
each solution.
The enhancements to our literature,
advertising, product announcements, and sales tools are all
designed to help us to effectively communicate our strategy, our
strengths as a supplier of complete integrated solutions, and best
of all, that DIGITAL HAS IT NOW!
What do we do when people want to use the
copper wire they have in their office? What do you do when someone
wants to put television and telephone on the same wire?
We have a system that treats data with respect
and customers have to do this also. The system we sell — the
backbone — is a piece of yellow wire or a piece of fiber glass.
One message you must get across to customers is that nobody
touches that cable except one person in charge.
This morning's message on networking was great.
Now, if there’s a good story to tell, why not aggressively
advertise it?
Once there were seven full-page ads for
different companies advertising word processing. Our people would
say, "We’ve got to advertise, too," so we would be number eight.
By that time, all of the ads looked the same and people never even
bothered to look at the name of the company. Just adver- tising
isn’t enough -- we've got to figure out what we have to say . .
.
I have a list of things I thought of yesterday.
Some fascinating things that we never told the world. But, we’ve
got them, and this is what the customer ought to know.
o In our system, every terminal in the whole
network can use any computer on the whole network.
o Every terminal in a network can exchange data
or electronic mail with any other terminal on the network.
o The collection and processing and
dissemination of data can be at different geographical locations.
o The resources such as printers can be used by
any computer on the network.
o The application can be run on the least
loaded computer.
o Some applications can even be divided between
several computers.
o One common set of data can be shared by every
terminal on the network, and this gives the organization —
everyone in an organization -- a common view of the state of the
organization, which makes possible common goals.
o Multiple computers and many individuals can
work on the same problem on different parts of the same job.
Now, these are just a few of the things that we
haven't mentioned today... what networks can mean to people. We
take much of this for granted because we do it every day. We’ve
never told much of the world.
What role do you see internal organizations
playing in educating the Field and customers about our successful
networking?
One thing we might do is show customers and
people from the press what we have inside the company. Show them
how we use it. Recently I was looking for someone and ended up on
the wrong floor. So, I went into someone else’s office and said
'Where’s Jeff's office?’ He said, 'I don't know,’ but he was doing
software and just logged into something else, typed Jeff's name,
and out came the address. You see, we just take it for granted. We
use our terminals for everything. So much so that we never think
of saying anyÂthing. We ought to get that message across.
So, I think our employees can play a key part
in selling networks by demonÂstrating how they use them. We've
learned about networking by doing it and using it ourselves. We
ought to capitalize on this as a sales tool.
I've heard that PDP-11 generated over $1
billion in revenue last year. How does ths fit into the One
Strategy message?
Very well. When we say we have one strategy —
and it's a corporate strategy -- we can say "VAX is a strategy and
our investments are going there as we evolve toward it.' But, in
addition, we support the 36-bit and 12-bit machines.
There is software we have on PDP-11 that will
never be on the VAX, or not for a long time. Also, many OEMs want
to stay on the 11, even though they feel someday they may need the
addressing space or someday the 11 may not be there. So, they are
also interested in VAX.
With our emphasis on a clear statement of
strategy, and our emphasis on independent business units, the
PDP-11 group is now making investments, proposing plans as a
business unit and doing this with great confidence, great
enthusiasm. It was a pleasant thing last week to hear what they're
doing. Now, they still know that eventaully customers will go to
VAX. But, in the meantime, we'll take good care of our PDP-11
customers. We'll simplify the product line, do a better job, and
the 11 will go on for a long time.
Digital seems to be in a good position today.
Our products are strong, our stock is up, our finances seem to be
in decent shape, and yet many employees are in turmoil because of
population issues. How do we balance this out? Cn we help
employees £eel more stable, more proud?
I think this means that in certain areas we are
overstaffed. There are several answers to this. One is that we're
growing, and when we're going to need people in the foreseeable
future, it's good business not to let them go no. It's also good
employee relations and just the right thing to do to treat
employees very well, and it’s very important to maintain loyalty.
However, the nature of life is such that we all face the danger of
losing our jobs. The CEO is the most vulnerable of all. It's just
one of the pressures and concerns of life.
There is a phenomenon going on in our business;
something we’ve promised for years. Now, it's really happening.
And that is with the technology and with the use of computers, we
use a lot fewer people to get done the things we have to do. It's
only with great care that we avoid doing any massive letting go of
people. We'll do what we do gently and with care.
In general, you know, we have a history of
being much more stable in employÂment and we'll try hard to avoid
trauma in this area.
What are your predictions about the
communications industry?
I don't know what's going to happen in the
communications industry. I would predict rather strongly, though,
that we do our job in offering what people should have. People
will not mix up data and telephone, and data and video, and they
will, after some experience, learn how to show great respect for
their data. It’s important that we keep our goals straight and
contribute to the things we’re expert in and not try to take over
areas in which we aren't expert.
* SNA, IBM, and IBM PC are trademarks of
International Business Machines, Inc. MS-DOS is a trademark of
Microsoft Corp.