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mgmt memo

Volume 10, #3____________________________________________________________ March/April 1991


MGMT MEMO" was written by Richard Seltzer in Corporate Employee Communication for the Office of the Presi­dent. It was written for Digital’s managers and supervisors to help them understand and communicate business information to their employees. You can reach Richard at


Implementing Digital’s Cost Strategy by Bruce Ryan, Corporate Controller


Services At Digital: Organizing For Growth And Profitability by Russ Gullotti, vice president, Digital Services


Evaluating New Markets In A Global Context by Cliff Clarke, manager, International Trade, Development and Policy


Digital To Open New Subsidiary In Czechoslovakia by Alberto Fresco, vice president and country group manager


Digital-Kienzle Begins Operations


Europe’s ‘Network Of Entrepreneurs’ by Pier Carlo Falotti, president, Digital Europe


Building Market Share In Production Systems/Mainframes by Bob Glorioso, vice president, Information Systems Business


Datamation Magazine Readers Name VAX 9000 System 'System Of The Year'


New Business Unit Formed To Develop Products And Technology For Image, Voice And Human Interface


Three Elected To National Academy Of Engineering


Ed Caldwell Promoted To Semiconductor Operations Vice President


Charlie Christ Promoted To Mass Storage Systems Vice President


Mancuso Appointed Executive Liaison Between Digital, Mass Software Council


Raj Jain Promoted To Senior Consulting Engineer


Implementing Digital’s Cost Strategy by Bruce Ryan, Corporate Controller


(In addition to his duties as Corporate Controller, Bruce Ryan has taken on the respon­sibility for making fundamental changes in the company’s cost structure, carrying on the work begun last summer by Mick Prokopis. In this new role, Bruce reports directly to Jack Smith, senior vice president, Operations.)


We have to change our cost structure to reflect the change in our business models. For FY92 our goal is to make our company’s fixed costs less than those incurred in FY91, regardless of revenue. This means we need to offset inflation, salary plans and currency movements and still achieve a cost performance that is less than this year’s cost. Mean­while, variable cost items -- such as direct labor needed to support systems integration projects or direct material costs to support Manufacturing — will grow with revenue, but at a rate that is slower than revenue growth, as we achieve greater efficiency.


Basically, we have to get competitive in all of our cost areas. We’re not there today. And, although the journey to competitiveness will take time, we must make significant improvements immediately.


Our task is to re-engineer our cost structure to make the company more competitive. Mick Prokopis started this effort, created the focus and the awareness around the company, appointed cost captains and sized the potential opportunity. Progress has already been made in many areas such as renegotiating travel rates, in facilities consolidations, in continuous renegotiation of all major contracts, and in data center consolidations. But, much work remains to be done.


Now, I’m working closely with the cost captains to turn their targets and recommendations into specific programs and bring those programs into operation. We’re linking cost cap­tain efforts directly to operations.


Each cost captain has responsibility for the total cost of a functional area across the entire company. They will study the cost structure, understand the drivers of the cost structure, and understand what changes have to be made to those drivers to lower the cost structure.


For instance, the key ingredients of travel cost are the rates we pay for airline tickets, hotels, etc., and the amount or volume of travel. The cost captain will make sure that we have the lowest rates for all the various travel elements, will take steps to ensure compliance with that rate structure (such as staying at recommended hotels), and will also make volume issues visible to the operating managers so they can control them and bring those numbers down.


The cost captains are:


Peter Brown — Telecommunications


John Caulfield - Corporate Waste


Doug Hammond - Facilities/Travel


Dan Infante - IM&T/IEG


Russ Johnson - Population


Murv Lackey — Purchasing


Frank McCabe - Manufacturing/Engineering


Ken Senior — Agency/Contracts/Temporaries/Consultants


Herb Shumway - Distribution


Pat Cataldo - Training


Earl Mason — Balance Sheet


Peter Zotto — Advertising More will be added as necessary.


In some cases, the cost captain is also the functional manager. For instance, that is the case for Purchasing and Telecommunications. In other cases, the responsibility as cost captain is broader than the person’s direct functional responsibility. For example, Pat Cataldo as the cost captain for Training is responsible for the total training dollar spent in the corporation, even though he has direct responsibility only for a piece of that.


The days are gone when we could afford to take months trying to influence managers to make changes. We’re going to evaluate the cost captains and operating managers on cost perfor­mance in their areas. The cost captains will make recommendations. We’ll listen to any disagreements and make the decisions that support our business goals.


I’m working on this project for Jack Smith, and Jack is also holding regular meetings with the cost captains. In April the captains will present their program plans for FY92. When those plans are approved, they will be implemented through programs with time schedules and deliverables. Whenever possible, these program plans will be broken down by operating unit so they can be communicated down to the operating units. They will strongly affect our FY92 spending.


Benchmarking is an important part of this process. We’re benchmarking ourselves against the best in class in corporate America. We want to be the best in class in all these areas. Led by cost captains and functional managers, benchmarking is happening throughout the company.


We will focus mainly on the big savings to be gained by changing our cost structure — looking at everything from manufacturing capacity, to number of computer centers, to the choice of the hotels and airlines we use.


We will also look carefully at our decisions as to what services to perform internally and what to purchase from the outside. For instance, when the work can be done with quality by outside parties more efficiently at lower cost, we will evaluate buying that service outside and stop doing it internally. This is similar to what many of our customers are doing today, asking us to take over their computer or telecommunications area or to run their Information Systems (IS) department.


Our operating managers, along with the cost captains, have a major role to play in achiev­ing our goals. However, the ideas coming from our employees throughout the corporation are a major ingredient to our success. The DELTA program has been a big help in creating cost savings programs. There have also been significant efforts by department teams in working together to become more productive. We will be making many of these success stories visible over the next few months, and we need these efforts to continue.


The "little things" are also important because they add up. We’re after every dollar of savings. When we make unnecessary telephone calls, turn up the heat up high, leave the lights on after work, waste or horde supplies, take unnecessary trips or treat anything as if it were free, we drive up spending. By the same token, when we conduct our business with a heightened awareness of cost, we, as individuals, can save the company money in a wide variety of ways, without sacrificing efficiency or effectiveness.


We will keep all employees posted on these programs and their progress. Every few weeks we will issue a memo from a different cost captain, and post it in LIVE WIRE.


To succeed in this effort, we need the cooperation of all employees. It is easy to save money in one area, and then simply spend it in another way so that the savings never show up on the bottom line. For instance, in the past, money saved from reduced travel rates might be used to increase the volume of travel. We must change that mind set. We can never reach our goal of competitiveness by strictly following rules, while evading their intent. Rather we must all understand the purpose and importance of this effort and stay true to its spirit.


Services At Digital: Organizing For Growth And Profitability by Russ Gullotti, vice president, Digital Services


Because of the importance of services to the company and the need to integrate all of our capabilities for major customers, all services offered by Digital have now been combined under a common organizational umbrella called Digital Services. Before he moved to his new job as vice president of U.S. Sales and Service, Don Zereski and I had already been work­ing collaboratively for many months. The integration of the Customer Services (CS) and Enterprise Integration Services (EIS) organizations, announced in December 1990, ensures that the entire services organization will better serve our customers’ needs.


The new Digital Services organization has four major objectives:


First, we must grow profitably and stay industry leaders. In other words, we must set integrated strategies for all of Digital’s services business for the 1990s and beyond. We’re already an industry leader in services and support, but we must strive continually to stay out front in serving our customers.


Second, we need to look for ways to reduce our cost structure through economies of scale, and this is being done.


Third, we must eliminate and avoid unnecessary overlap and confusion among the services offerings. We need to make it simpler for customers and account managers to understand Digital services.


Fourth, we need to continue to develop the strategic and business role of the corporate services organization. The tactical role happens in the geographies and in the accounts where the day-to-day activities are managed.


Our top priority in creating the integrated organization has been to define the business structure of Digital Services to:


o simplify the interface to account managers and customers,


o achieve best-in-class services competencies and realize major growth and profit oppor­tunities, and


o keep the overhead and infrastructure costs at the minimum level necessary to support the accounts and customers.


We have reduced the number of services business units and organized them into business clusters to focus on core competencies and major market opportunities. Initial details on those changes were announced in mid-March 1991, and the managers are currently engaged in implementing this new business structure.


Meanwhile, each of the geographies is working on a structure to support the Customer Account Business Unit focus of the company. Pier Carlo Falotti for Europe, Dick Poulsen for GIA, Don Zereski for the U.S., and I are all part of the International Management Committee which is working on those models.


In the new Customer Account Business Units, the account manager is the commander-in-chief, managing profitability, growth and volume for that account. That means that the services capabilities of the company have to be made available in response to the plans and needs of the account manager.


The larger accounts may invest in dedicated service people. Smaller accounts will turn to service people located in account groups. In any case, we plan to provide account managers and account groups with the expertise they need in education and consulting services, systems integration and support services, as well as in traditional product services.


We have many challenges and opportunities ahead of us. Already, services represents almost 40 percent of the company’s revenues. This service business revenue grew 16 percent last quarter, at a time when other parts of Digital’s business have slowed. Systems integration revenue is growing at about 30 percent a year. We also have a wide range of newer offer­ings, such as customized support services, desktop services, facilities management ser­vices, and our new consulting services business which is still small but growing at great­er than 20 percent per year.


Today, particularly on large projects, the customer is looking for a solution to a bus­iness problem. The hardware and software required to solve it are not the issue. Customers need the services that will help them accomplish their urgent business goals. They don’t want to talk about this product or that; they just want their sheet metal factory to work or their inventory levels cut in half.


Our systems integration business is really an overlay of the resources of our whole com­pany. The Digital program manager for an individual project brings together all the re­sources of the company needed to deliver the total solution to the customer. The program manager, who comes out of Digital Services, coordinates these activities with the sales account manager who is ultimately responsible for that account.


Systems integration can be a risky business. The possibility of unexpected costs is much higher than in our traditional business. We have many strategies to reduce that risk. For example, repeatable solutions and platforms from Central Engineering are designed with tailoring in mind. There are many others as well, and we continue to work on developing even more.


In systems integration, the selling costs are high and you must win better than 60 percent of your committed-to-win programs or you risk losing money. And, if we win more business than we planned for, we may face a resource problem in meeting our commitments to cus­tomers. This is why our service alliance program, and our other sub-contractor and part­nering strategies are so critical to success.


In our services business, we have the obligation to train our sales people to work to a very different selling model. A much higher degree of discipline is needed for antici­pating customer needs and for account planning. We must continue to learn to value-price for the risk, not just add up the sum of the pieces.


We must continue to learn to follow the leadership of the program manager on major pro­jects, rather than operating independently, and we must always strive to develop better business models for estimating what business we will actually win.


We are facing a time of tremendous challenge and exciting opportunity, and we will con­tinue to work on discipline, control and selling models, and ensure that we are putting all of the right skills in place.


Services and solution selling will be the differentiator as we move through the 1990s and beyond, and we must ensure that Digital will be solidly positioned as a global leader. As we continue to position our company for success, we know we can count on the commitment of the entire company to help us achieve that success.


Evaluating New Markets In A Global Context by Cliff Clarke, manager, International Trade, Development and Policy


Today, we do business in an interdependent, global economy. Anything of importance hap­pening in one part of the world affects the whole seamless fabric.


Governments now lavish on economic competition the kind of attention that they used to reserve for military matters alone. A country’s economic viability and competitiveness are seen as vital to its strategic long-term survival. Economic competition is replacing political warfare. Regional marketing alliances are emerging within the industrialized world and are taking on greater importance. Already, following the pattern of Europe, the U.S. is taking small but important steps toward a North American regional economy, with its trade agreement with Canada and overtures toward Mexico.


Such shifts in the global trading system and in the priorities of governments affect Digital in a variety of ways. Our industry is maturing, with fewer and larger competitors doing business worldwide. Many of our traditional markets are relatively saturated, and the future of a number of technical issues related to standards is not very well known. Customers are interested in solutions not just technology. The technology is just a tool to help them operate in this same, complex global environment. Both companies and govern­ments need to use information technology to cope with the proliferation of information and to adapt continually, with dynamic models, to survive.


In the news about the war in Iraq, there were stories about the Stealth bomber. This aircraft is so complicated and aerodynamically unstable that the pilot cannot fly it visually, but rather has to depend on computers. Businesses and governments around the world are now finding that their environment is so complex that to achieve their goals they too depend totally on the use of computers.


Naturally, this dependence on computers means more business for Digital and the rest of the industry. But at the same time, we also have to negotiate our way through these same complex and ever-changing skies. To do so better than the competition, we have to be faster, better and smarter. We have to be aware of, anticipate, and prepare for economic changes that will affect our global business.


In addition to closely watching and understanding the changes in developed countries in the regions of the European Community, North America and Asia, we need to watch for oppor­tunities in the underdeveloped countries. New markets are opening in Eastern Europe, Asia and South America where companies are hungry for the kind of information technology and solutions that we can provide today. And governments are becoming increasingly aware of the importance of information technology to make their countries more competitive in the global arena.


In International Trade, Development and Policy organization, we work closely with Digi­tal’s Europe and GIA organizations. We monitor events in the industrialized regions and do vanguard work in the rest of the world, When we see opportunities unfolding, we work carefully with other parts of the company to develop a coordinated strategy so the whole company can begin to move in that direction.


For instance, three years ago, with the onset of "glasnost" and "perestroika," we began to watch and prepare for opportunities in Eastern Europe. As events unfolded in Hungary, Poland and Czechoslovakia, we marshalled the resources of the company to put together plans and strategies for that part of the world. We now have a very successful joint venture in Hungary, and are opening direct sales offices in Poland and Czechoslovakia. We are also developing a response to the much more complicated but promising set of oppor­tunities that are opening in the Soviet Union.


In other words, there is a pattern to our investments in these new markets. And the effort starts not with a knee-jerk reaction to the evening news, but rather with contin­uous monitoring of political and economic events in a global context.


All of Digital’s international trade activities are interconnected. These aren’t just trees with ripe fruit to be picked one after the other. We are dealing with complex societies, and we deal with them in parallel and on a long-term basis. We work as a strategic partner with the countries where we do business, not just as a merchant who comes and then goes. And as we evaluate new opportunities, we do so in a global context.


Digital To Open New Subsidiary In Czechoslovakia by Alberto Fresco, vice president and country group manager


Digital will open a full subsidiary operation in Czechoslovakia by June and already has signed agreements with three Czechoslovakian companies in an ambitious program to sell and service computer systems and solutions in Czechoslovakia. This is the latest in a series of investments by Digital to establish a lasting presence in the emerging markets of Central and Eastern Europe. This began in 1990, with the formation of a joint venture company in Hungary and a multi-faceted strategy to address the opportunities created by the unification of Germany.


With the addition of Czechoslovakia, Digital now operates in 83 countries. In Europe alone, we have 11 manufacturing plants, five major Digital Competence Centers (DCCs), numerous centers of technical expertise, and over 270 sales and service offices in 20 countries. Today, Europe contributes more than 40% of Digital’s overall business and has 25 % of its total employee population.


Rapid change is taking place across Eastern Europe - change that is completely altering the economic face of the continent and, which will, with commitment and hard work, bring a better life to each member of Europe’s wide and diverse family of nations. During the last year seen many clear proofs that there is no quick road to a problem-free global situation. We represent just one brick in the large project of resetting and re-estab­lishing the Czechoslovakian economy. But the hard work of that large project has already started.


Our intention is to build a long-term presence on a solid business-base in every country in which we operate. We have a balanced plan for investments and growth in Czechoslo­vakia. We will start very carefully, with a relatively small organization, but with clear direction in mind. The outstanding success of our local subsidiary in Hungary is a good example of how we intend to build our business base in Czechoslovakia. As in Hungary, in Czechoslovakia we will work with local partners, academic institutions, and government departments; understanding and responding to the needs of local customers — and providing


the most up-to-date network and workstation technology and local software applications. Business growth in Hungary has far exceeded our expectations. We now have 60 employees there and expect to have 80 after just a year of operation.


This announcement means Digital is returning to a market where our products were quite popular in the 1970s. Business in Eastern European countries was growing steadily before 1980, when the "Afghanistan" embargo went into effect. During that embargo, Digital jokingly became known as "the preferred vendor to copy" throughout Eastern Europe. The cloning of Digital computers unintentionally built a large installed base of customers and users who are familiar with Digital’s style of computing. That installed base represents a great opportunity for us. The Czechoslovakian DECUS (Digital Equipment Computer User Society) already has 800 members, who will be important as discussion partners as this market reopens to us.


Now the relaxation of CoCom (Coordinating Committee for multilateral export controls) restrictions will make available the best quality, the best price/performance and latest products to help solve critical needs for effective communication and information manage­ment. Rather than copying Digital’s technology, they will be able to buy the original, and get service on it.


Digital Czechoslovakia’s headquarters is being established in Prague. Digital also plans to open an office in Bratislava in the fall. The new subsidiary’s strategy is based on the marketing of Digital’s families of systems and solutions, in full compliance with all applicable export laws.


The three Czechoslovakian companies with whom Digital has signed agreements all represent software and hardware skills as well as considerable experience operating in the local computer market. Besides selling Digital’s products, they will be key partners in Digi­tal’s future development of local applications and support. Started in 1951, Kancelarske Stroje in Prague is a company with more than 5,000 employees. Datasystem SOFT in Bratis­lava was established in January this year and now has 140 employees, all of them former employees of the company Datasystem. VUVT in Zilina employs 270 people. We expect to add more local companies to our list of partners. And we expect many international software companies to follow our entry to Czechoslovakia.


In addition to serving the local market, we will support Digital’s worldwide customers as they, too, move into the Czechoslovakian marketplace. Therefore, this announcement also is important to all our customers operating on an international basis.


Digital-Kienzle Begins Operations


In December, Digital announced that it had reached agreement with Mannesmann AG to acquire 65 percent of a new company to be formed from the Mannesmann Kienzle Computer Systems Division, and the PROC AD GmbH and PCS GmbH divisions of Mannesmann Kienzle. That agree­ment has now been approved by the European Economic Community.


The new company, Digital-Kienzle Computersysteme GmbH & Co. KG, is headquartered in Vil- lingen, Germany. It is managed by Hans Dirkmann, who also continues to manage Holland and Belgium as vice president, country group manager. In both assignments, Hans reports to Pier Carlo Falotti, president, Digital Europe. This was the largest external investment in Digital’s 33-year history ($230 million). Mannesmann AG owns the remaining 35% of the new company.


Mannesmann Kienzle’s Computer Systems Division had already established a prominent po­sition as the second-largest domestic computer supplier in Germany. The new company has sales offices in 28 German cities and in other European countries and benefits from ten years of experience in the computer business. It also has one of the premier UNIX* soft­ware development organizations in Germany. Operating as an independent company, it employs about 3,900 people and has an installed base of over 12,600 customers.


The customers are small and medium-sized enterprises - most of them with fewer than 300 employees — primarily in Germany and other German-speaking countries, but also elsewhere throughout Europe. The products include UNIX-based applications for such vertical markets as manufacturing, retail, banking, insurance, public administration and printing.


Digital Kienzle also has potential for marketing in what was formerly East Germany and other countries of Central and Eastern Europe. Its products are particularly well suited for the types of industries and companies operating there, many of which are small opera­tions that need complete solutions running on small systems. The ease of translating German-language applications into other Germanic languages represents an added advantage in that region.


Gary Eichhom, vice president, General Systems Business, emphasized, "We’re forming a strategic alliance with people who have some expertise in an area where we don’t. It’s a complementary relationship. They have a sales and service organization focused on small and mid-sized companies, while most of Digital’s sales and service organization is focused on large companies. They’re moving from a product portfolio that was basically designed to build their own computers to a portfolio where they use industry-standard computers and open systems. This is the strategy Digital is pursuing in the small and mid-sized business area as well.


"There are obvious synergies. We will supply products and technology to Digital Kienzle. They will supply applications as well as sales and service expertise to complement Digi­tal’s. And we have complementary channels of distribution. In addition to Kienzle, we will continue to recruit Value Added Resellers (VARs) around the world as we have been doing over the last 15 months, particularly in small and mid-sized business to complement the areas where there are additional needs for applications."


*UNIX is a trademark of UNIX System Laboratories, Inc.


Europe’s ‘Network Of Entrepreneurs’ by Pier Carlo Falotti, president, Digital Europe


In November, we announced a new organizational direction for Digital in Europe called "A Network of Entrepreneurs." We are going back to small units where there is a team spirit, unity of intent, clear goals, clear management, and where everybody works towards the same set of objectives and feels that they are more than just a part of a large organization.


We emphasize the network part because we cannot lose the validity of the network and the resources we have throughout the company. Also, we have to operate internationally for many of our customers and that requires consistency of message and consistency of approach at a basic level.


We emphasize entrepreneurship because smart people quickly understand that the only way to make profit is to spend less than you earn and if you want to earn a lot, then you have to sell a lot of products and services.


We have a tradition of entrepreneurship in business functions like Customer Services, EIS and others. Now we are extending this to Sales and to other functions that have never before been asked to perform at a profit level.


This doesn’t mean that everyone goes off and "does their own thing." It doesn’t mean that everyone opens their own profit line. Nor does it mean that to be an entrepreneur you have to be in Sales. You can be an entrepreneur in Personnel, for example, if you spend less than planned and provide more than expected. You can be an entrepreneur in Manufac­turing by offering better quality than demanded and spending less money to achieve it.


You can be an entrepreneur in anything you do as long as you think as though Digital is "your own company."


We are still still working on these changes, but I already feel the different atmosphere already in many places. By next year we want everybody to be able to identify with a goal. That way everybody will end up being a winner.


Building Market Share In Production Systems/Mainframes by Bob Glorioso, vice president, Information Systems Business


The first task of the Information Systems Business (ISB) group is to help identify and close VAX 9000 and Fault Tolerant business.


To capitalize on the selection of the VAX 9000 system as "Mainframe of the Year" by read­ers of Datamation magazine and our increased capability to deliver systems in quantity, we will put cross-organization programs in such areas as:


o advertising;


o VAX 9000 pre-sales technical and marketing support;


o competitive migrations — to coordinate the resources which can help customers move their data and applications to VAX/VMS systems;


o worldwide benchmark center coordination - to assure timely turnaround of benchmark requests;


o announcement of new VAX 9000 packages and new VAXft systems;


o success information — including a list of more than 40 VAX 9000 reference sites world­wide, our new leadership market position in supercomputers and major wins in Fault Tolerant and High Availability Systems; and


o High Availability/Fault Tolerant campaign.


In order to maintain our marketing, sales and integration focus we are completing the transition of High End Engineering and Manufacturing out of ISB. This last step is the transition of VAX 9000 managed by Sultan Zia, to VAX Systems and Servers, under Bill Demmer.


Production systems capitalize on our wide range of hardware, software and services that help customers solve their mission-critical or "bet-your-business" problems. In this market, the customer has a certain kind of expectation not only from the computer system, but also from the vendor who delivers it. That combination calls for a new set of behav­iors on our part. An important part of our job is to get Digital into a "mainframe of mind," where we are successful only if our customers are successful. One way of putting it is, "if the customer’s system is down — we failed — no matter why they are down." We have to make our systems easy to buy, easy to install, easy to operate, east to support, and if servicing is needed, easy to service.


With the VAX 9000 system, we are building a base of Production Systems customers. In dealing with them, we are encountering all the main issues in that market and establishing priorities and models for appropriate levels of investment — in such areas as systems management, storage management, networks, transaction processing and data base — to meet future customer needs and build market share. Based on this experience, we are creating a business plan identifying the programs and resources needed across the company to optimize our market opportunity and assure that the needs of these critical customers are satis­fied.


We face the added hurdle that in a recession, customers tend to buy things that they can get approved with only one signature and higher priced systems suffer. That’s why we must put added effort into closing VAX 9000 sales. But at the same time, we are establishing new models, acquiring new customers, and learning about new markets and buying behaviors. And it is new business of this kind that will lead to important growth in the future. Rich Whitman is leading the VAX 9000 marketing effort working with IBUs, Services and Sales.


Our group also includes engineering development projects that are important to our success in this market. These include Systems Planning & Management Software and Services and the Supercomputer Technology Center under John Manzo and our High Availability/Fault Tolerant Systems & Services under Fernando Colon-Osorio.


The production system customer requires high availability, robustness, recoverability and fault tolerance. And here we have the most powerful message in the industry. We offer well-designed, good high-quality components, systems and software in our range of VAX 3000, 4000, 6000, and 9000 series computers. Then we can cluster them to increase the availability. In addition, we build fully fault-tolerant systems without requiring the customer to change his or her application or training.


Some customers have applications that they want to partition so that one critical part of it is fault tolerant. In many cases, doing this makes the whole system fault tolerant - a real competitive advantage. For example, Avon bought fault tolerant machines for order entry. In other words, in those parts of their operations where they can’t afford to lose data because it would cost them money, customers are electing to use fault tolerant com­puters. The demand for fault tolerant systems grew rapidly this past year. Our High Availability/Fault Tolerant marketing, led by Bill Lynch, will make a major announcement on this in March.


We are also working with Customer Services to develop a set of services to meet the spec­ial requirements of our set of customers.


Production Systems is a cross-organizational Digital effort. The actual work is being done by people in many different groups across the company. We carry the flag and help these pieces of the company work together in a single direction, with focus and enthu­siasm.


Datamation Magazine Readers Name VAX 9000 System 'System Of The Year'


The readers of Datamation magazine have chosen Digital’s VAX 9000 system, a series of mainframe computers and supercomputers, "System of the Year" in the magazine’s first product awards competition.


Finishing ahead of nominated mainframe and supercomputer offerings from IBM, Cray, Amdahl, Hewlett-Packard and Hitachi, as well as systems from other vendors, the VAX 9000 system was voted the top systems product of 1990 by more than 179,000 DATAMATION readers world­wide.


Datamation readers were asked to select products based on value and effectiveness. The results of the voting appear in the February 15 issue of the magazine. The awards are particularly significant since they represent the choices of information systems profes­sionals around the world who manage, implement, specify and purchase computer systems, products and services.


All products in the competition were introduced between June 1989 and June 1990, They were listed in the magazine’s October 15 issue according to five categories: PCs and Workstations, Networks, Software, Systems and Peripherals. The VAX 9000 system competed in the "Systems" product category along with other leading mainframe, supercomputer and systems products from other vendors.


Bob Glorioso, vice president, Information Systems Business, noted that the VAX 9000 sys­tems have "posted strong sales" in their first year with some 200 systems installed, and he praised the dedication of "all those Digital employees who brought this series of products to market and are working today on the our customers will see in the near fu­ture. "


New Business Unit Formed To Develop Products And Technology For Image, Voice And Human Interface


To focus on an important new direction in computer technology, Digital is forming a new Product Creation Unit (PCU) — Image/Voice/Human Interface — under the leadership of Bill Heffner, vice president.


"Originally computers could only recognize characters," explains Bill. "In the 1980s the added capability to recognize graphics led to rapid growth of a variety of important applications, such as CAD/CAM and desktop publishing. Now the industry is on the thres­hold of another major advance - the ability to process whole images and to use voice for


both input and output. We have formed a new Product Creation Unit (PCU) to focus our efforts to develop the enabling technologies and also a wide range of applications based on them."


Bill, who reports to Jack Smith, senior vice president of Operations, will be the focal point for all corporate activities involving image, voice, and other human interfaces. To begin with, the new group will include the Image Systems Group (IBU) and the Voice portion of the EIS Integration Business Unit.


Bill joined Digital in 1975 as Group Software Engineering manager, and was named vice president in 1985. "Bill served as the head of the Digital’s 32-bit software development effort, which has given the company its base software leadership in VMS, DECnet and many other software products," noted Jack.


Three Elected To National Academy Of Engineering


Three members of Digital’s Corporate Research Group have been elected to membership in the National Academy of Engineering (NAE). The three are Sam Fuller, vice president of Cor­porate Research; Bob Taylor, director of the Systems Research Center (SRC) in Palo Alto, Calif.; and Leslie Lamport, a member of the research staff at SRC. They join Digital President Ken Olsen, Butler Lampson (also of the SRC) and Bill Strecker, vice president, Engineering, as Digital members of the NAE.


Election to the Academy is among the highest professional distinctions accorded to an engineer. Academy membership honors those who have made "important contributions to engineering theory and practice, including significant contributions to the literature of engineering theory and practice," or those who have demonstrated "unusual accomplishment in new and developing fields of technology." The U.S. membership of the Academy now numbers 1,580 and the number of foreign associates is 132.


As vice president of Corporate Research, Sam Fuller is responsible for managing the re­search performed at Digital through its four internal laboratories, university research, research consortia, and technology exchange. The Academy is honoring Sam for his "contri­butions to computer architecture, performance evaluation, and creative leadership in research management."


Bob Taylor joined Digital in 1983 to help develop the SRC. Under his direction, research­ers at the SRC are currently working on prototypes for local area networks, a distributed file system, a fast turnaround program environment and a system to facilitate managing the evolution of large collections of software. NAE cited Bob for "innovative management of research leading to major advances in networks, user interfaces and workstations."


Leslie Lamport has been a member of the research staff at SRC since 1985. His research has encompassed most areas of concurrent processing. After early work on array and vector processing, he is now concentrating on asynchronous concurrent systems. He is being honored for "contributions to the theory and practice of concurrent and fault-tolerant computing."


NAE is a private organization established in 1964. With the National Academy of Sciences, it advises the U.S. federal government on questions of science and technology. NAE also recognizes distinguished engineers, sponsors engineering programs aimed at national needs and encourages education and research.


Ed Caldwell Promoted To Semiconductor Operations Vice President


Ed Caldwell has been promoted to Semiconductor Operations (SCO) vice president, reporting to Bob Palmer, vice president, Manufacturing. In this capacity, Ed is responsible for the SemiconductorManufacturing&TechnologyGroup(SCMT),SemiconductorDesignandEngineer- ing Group (SDE), and the Semiconductor Business Operations (SBO) organizations across the U.S. (Hudson, Andover and Franklin in Massachusetts) and Europe (South Queensferry and Ayr in Scotland, and Israel). This embraces all facets of the SCIT (Semiconductor and Inter­connect Technology) business except the operations in Cupertino, California, and Green­ville, South Carolina, which will continue to report directly to Bob.


Ed has been with Digital for a year as the SCMT Group manager. He brings to this position twenty-four years’ experience in the semiconductor industry. He has held a number of senior management and development positions with United Technologies, Fairchild Semicon­ductor and Motorola, Inc. His most recent position prior to joining Digital was as the senior vice president and general manager of the U.S. Semiconductor Group for Siemens Components, Inc.


Charlie Christ Promoted To Mass Storage Systems Vice President


Charlie Christ has been promoted to Mass Storage Systems vice president, reporting to Grant Saviers, vice president, PCs & Systems Peripherals. Since Charlie joined Digital in July 1990, he has been group manager of the Mass Storage Product Creation Unit, respon­sible for Mass Storage U.S. Manufacturing operations in Colorado Springs, Colorado; Tempe, Arizona; Enfield, Connecticut; and Springfield, and Shrewsbury, Massachusetts; and world­wide tape, disk, optical and storage subsystems engineering and product marketing.


Charlie joined Digital last year after a successful 20-year career with Xerox, and most recently as a partner with Coopers and Lybrand Consulting. At Xerox, Charlie was pre­sident of the Reprographics Group, responsible for the worldwide manufacturing of copiers, personal computers, disk drives and word processors. He was heavily involved in Xerox’s business recovery in the 1980s. Charlie consulted with Digital’s Storage organization for 16 months prior to joining the company.


Mancuso Appointed Executive Liaison Between Digital, Mass Software Council


Mike Mancuso, Group Manager of the Independent Software Vendor (ISV) Program, has been selected to act as the Executive Liaison between Digital and the Massachusetts Software Council. The Software Council was founded in 1985 to promote the Massachusetts software industry, domestically and internationally. It sponsors programs and activities designed to help its membership of 200+ chief executives manage and grow their companies. The Software Council works to generate greater understanding of the uses of software, foster an attractive economic climate for software investment and development, and attract qual­ified people and customers for the state’s software industry.


Raj Jain Promoted To Senior Consulting Engineer


Raj Jain has been promoted to Senior Consulting Engineer, reporting to Bill Hawe, Senior Consulting Engineer, who is managing the Telecom & Networks LAN Architecture Group.


"During his 13-year career with Digital, Raj has been one of the industry’s leading per­formance analysts," said Bill. "His work here has spanned many areas of technology, including networks, distributed systems, traffic analysis, error behavior, reliability and availability, modeling tools and performance analysis methodology - both experimental and


theoretical. His many contributions include helping improve the performance of VAXclus- ter, DECnet, Ethernet, and FDDI products.


"Over the last few years, Raj’s original work on network congestion control, congestion avoidance, network workload modeling, timeout algorithms, address caching, and ACK with­holding have helped improve the performance of Digital’s networking products. His analysis of FDDI performance, multicast address recognition, link transmission coding schemes and errors, and congestion have resulted in industry-wide recognition for Digital."


Raj joined Digital after receiving his Ph.D. from Harvard University in 1978. He spent the 1983-4 academic year on sabbatical at Massachusetts Institute of Technology. Since then he has taught a graduate course on computer systems performance techniques at M.I.T., and is author of the book "The Art of Computer Systems Performance Analysis" published by Wiley-Interscience, NY. Raj consults on performance modeling issues throughout the cor­poration.


Plans For AIDS Information Videotex File


A videotex file of AIDS-related information is now in the pilot stage and should be gen­erally available soon as part of the Corporate Videotex Library over Digital’s network.


Sponsored by the AIDS Program Office, this is part of a broader employee education stra­tegy. Seminars are still the focal point for AIDS education. While such seminars are thorough and personal, videotex will help get information to employees quickly and pri­vately.


While much has been written, broadcast, and said about AIDS over the last few years, most people don’t listen very carefully or remember details until someone they know has been touched by it. When that happens, they suddenly need all the support and references and other resources they can find. In those cases, even people who have already been through the seminars will find the videotex file helpful.


The file will also help promote and encourage participation in AIDS-related community events and will let employees know about volunteer opportunities.


Reference information, updated only occasionally as needed, will include:


o charter, goals and mission of the AIDS Program Office,


o basic medical information,


o Corporate Contributions’ strategy for health care, and


o listing of community-based AIDS support agencies which are available to help employees and their families.


More topical information, updated at least once a month, will include:


o medical news,


o listing of Digital grants to AIDS programs, and


o listing of community events and volunteer opportunities.


The videotex format is modeled after that used for the Personnel Policy and Procedures Manual (Orange Book).


There will be a feedback loop so users can indicate what’s helpful to them and what’s not, and also to let them provide information about additional community events and volunteer opportunities for possible inclusion in the file.


For further information contact Paul Ross, manager, AIDS Program Office (DTN 223-9580, @MSO).  privacy statement