Volume 2, Number 3 March 1983
Three New Committees Replace Operations Committee
Europe Focuses More Attention on Government Concerns
Organization Changes in Low-End Engineering
Ulf Fagerquist To Focus On On 10/20 Products
Network Services Created
Digital To Use Company Facilities For Expanding Business Center Operation
Service For Small Business Equipment Gets Special Attention
Ken Talks To Finanical Analysts About Products
Pay For Performance Emphasized By Kevin Sullivan, Manager, Corporate Compensation And Benefits
Personal Computer Notes
With the expansion of the company, the Operations Committee members feel the need to have a greater number of managers participate in the review of Digital's plans, operations and policies. They have therefore established three new committees in place of the current Operations Committee.
"With wider representation of key managers in the company's highest decision-making bodies, we hope to open the way for upward movement of new and creative ideas," explains Win Hindle, vice president, Corporate Operations.
The new committees focus on Product Strategy, Marketing/Sales Strategy, and Management. They will hold their first meetings in early April. Their charters and membership are as follows:
The Product Strategy Committee will review product strategies, prioritizes product investments, approve product plans and review Manufacturing/Engineering/Marketing interfaces. Members:
Jack Smith, Gordon Bell and Ken Olsen, chairmen
European Engineering Manager
Bill Long (rotate Technical Group managers)
Jim Willis (rotate-Technical Volume Group managers)
Rick Corben, Secrtary
The Marketing/Sales Strategy Committee will review marketing strategies and programs and approve major product pricing, new terms and conditions, channel strategies and promotion campaigns. It will also review Sales/- Marketing interfaces. Members:
Jack Shields and Ken Olseng Chairmen
Dick Farrahar (rotate with dick Walsh)
Cliff Clarke, Secretary
The Management Committee will reveiw the two-year operating budget, integrate functions, approve organization and role changes and review and approve personnel, compensation and space policies and plans. Members:
Win Hindle and Ken Olsen, Chairmen
Pete Smith (rotate- Marketing Group managers)
Ron Smart, Secretary
Rotating membershihps will be on a six-month cycle.
Digital's continued success and increasing size have made it very visible in Europe. National and European Policies int he computer industry and markets, and trends in international trade require that Digital address strategic opportunities and relationships with European governments and major European companies.
Jean-Claude Peterschmitt will devote a major part of his activity to these critical strategic opportunities and issues. Therefore, he has asked Pier-Carlo Falotti to take the position of vice-president, European Field Operations. Don Zereski repladces Pier-Carlo as manager, European Field SErivce.
Subsidiary operations, Area Sles and Marketing staffs, and European Service managers will report to Pier-Carlo. European Personnel, F&A and Manufacturing will continue to report to Jean-Claude.
Jim Cudmore has been named vice president, group manager for the Low-End engineering organizatino. In making this announcement Gordon Bell and Jack Smith explained, "We are anticipating unprecedented, rapid growth in the Personal Computer segment of this organization where Bill Avery, over the past 18 months, has successfully built three strongly focused PC development groups: Professional, Rainbow and DECmate.
"To provide greater visibility during this critial growth period, these groups will report directly to Jim. The clear segmentation of responsibility of our Personal Computer development groups will allow each of them to inter.act easily with differing strategies and programs. This will also free Bill to concentrate full time on the video, hard copy and voice products, as well as the key integrative activities and support services for overall architecture and this entire space."
Reporting to Jim in the new organization are:
John Clarke Walt, DECmate Development Group
Walt Hanstein, Electro Mechanical Development & Support Group
Barry James Folsom, Rainbow Development Group
Avram Miller, Professional Development Group
Mike Gutman, PDP-11 Systems Development Group
Bill Avery, Printer Development Group, Video Development Group, PC and Terminals: strategic planning, architecture standards, common advanced development, support and administration.
In a related organizational move, Jeff Kalb, manager, LSI Group, and Don Metzger, manager, Process & Design Support Group, will now report directly to Gordon and Jack.
Ulf Fagerquist will concentrate all of his efforts on the development of DEC System 10/20 products in an attempt to give the products more visibility. He will report to Bill Johnson.
In a related move, Bob Glorioso, whose group focuses on future high end systems and technology, will report to Bill.
* * *
To support the major corporate thrust in the area of distributed systems and network products, a Network Support Group has been formed to provide: customer support, major proposal support. Sales support. Educational Services support, Software Services support and Field Service support.
Tom Karpowski has been named Network Support Manager. He reports to Jerry Montague, manager of Operations and Support Technology for Field Service and Software Services.
The group will be located in the New England area, but will have worldwide support responsibility. It will also be accountable for development of service products that complement our network architecture.
Digital has decided to convert some of the available floor space in Manufacturing and Sales facilities into Business Centers where products can be sold. The company will also expand its product offerings as it increases the number of retail outlets in the U.S.
"There is absolutely no reason we should construct or rent buildings if we have perfectly suitable floor space available in our Sales or Manufacturing facilities. We are looking at lobbies as well as other available floor space," says Barry Cioffi, manager, Small Business Channels Marketing. "This is a cost savings step as well as a way of subtly telling potential customers, who might not know very much about us, that we are a large company that can stand behind our products. People want to buy from companies which will be around for a long time. Whether they are at a plant or sales office, customers will get a sense of substance.
"In the past, we have only had DECmate I at our Business Centers (formerly called "stores") and just recently we started offering the DECmate II with MICRO/PDP-11 and VAX-11/730 to be offered in the immediate future. The plans call for us to offer an entire range of business computers which will meet the needs of the single user market as well as the multiple-user market. No other company offers this full range of products to the small business market."
Centers will also facilitate service when it is required. Some actually will include drop in centers. Others will send equipment brought into the center to the appropriate place.
Digital now has 24 Small Business Centers around the world. Plans call for this number to steadily increase over the next two years, with about ten Centers to open within the next six months. High population areas will be targeted.
According to Ken Senior, manager, Small Business Channels Planning, Digital has created several ways to meet any service requirements of customers who purchase small business computers. Traditional service contracts are available for customers who want service within a specified number of hours. People who do not opt for a contract, can have their equipment serviced on a "pay as you go" basis. In addition, mailers will soon be available for the more technically oriented customer who can identify which module needs replacement.
"We also have a hotline for customers with questions about software problems or procedures. Located in Atlanta, Georgia, the hotline number is (800) DIG-ITAL," says Ken.
Digital will provide any number of training courses to users who feel the need for personalized instruction on their computers.
At a recent meeting of the Boston Security Analyst Society, Ken Olsen stressed Digital's price and technical leadership in disk products. He specifically mentioned the RA60 and RA81 disks and related products, such as the HSC50 intelligent storage controller, which give Digital an edge in the area of networking and clustering computer systems.
The HSC50 connects to the new Computer Interconnect (CI) bus to support disks and tapes not attached to specific computer systems. This device makes it possible for several computers to have access to the same disk without the delays and file duplication of conventional networks, or for two computers to work in parallel, vastly increasing the speed of processing. In other cases, it can be used to record the same data on several disks simultaneously.
He noted that production of our new personal computers is going well. "We're now making about 500 a day, and before summer we plan to get to 1000 a day. With that number we'll satisfy quite a few customers. As you start going from zero to 1000 a day, any little thing can slow you down," he admitted. "But the problems get fixed quickly, and we're moving ahead well.
"The other area where there is a large push is in office automation," Ken added. "Here we're concentrating on the leading companies with sophisticated needs that want to tie large organizations together, and to exploit all the features of office automation. Some of the Fortune 500 companies are now our customers. In some cases, their research and other departments have been using our equipment for years, and we're now becoming a serious factor in many office applications."
As a general comment on Digital's approach to business, he reiterated, "Our goal is never to sacrifice quality. In the industrial-commercial area, quality is the most important thing. In the long run, that's what people want. Even though some may buy home-quality, television-quality personal computers to start with, we feel that in the long run, they will only want the utmost in quality and usefulness."
In answer to a question relating to the causes behind the upturn in Digital's second quarter order rate, Ken replied, "I think it's a combination of factors. The economy has turned around. We're a lot more efficient in selling now. And we have a lot of good products. Part of it comes about due to recent product announcements, such as those relating to networking, that showed people how they could use our equipment in the future. Some of the new products that we announce that won't be available for awhile encourage people to buy the old ones because they can see a future for them. Then, of course, our personal computers account for a good part of the new orders. And we have quite a few large orders in the office automation area.
"Also, our 16-bit computers are doing very well. For a couple years we didn't push them as hard as we probably should have, because the VAX was doing so well and it's such a great machine. But we've started to push PDP-lls aggressively again because for many applications they are by far the best solution and there is lots of proven software out there."
As managers complete their salary plans for the next 12 months, they will notice there are no guide charts to frame decisions about individual increases. In fact, except for average percent increases and six-month delay parameters, there are no guidelines, just goals and simple planning tools. This approach places the responsibility for pay for performance squarely on the shoulders of the individual manager.
Our primary goal is to reinforce pay for performance as a practice as well as a philosophy. All employees should be evaluated in relation to their contribution to the success of the company. This year's special emphasis is to recognize performance excellence with increases calculated to reinforce that contribution. We want our outstanding performers to be rewarded well. It's up to the managers to make this happen.
o One of Finland's largest insurance companies purchased a distributed data processing solution which includes 15 VAX-11/730S and VAX 11/750S as well as over 100 Professional 350s.
o Michigan/Wisconsin Pipeline, a major oil and natural gas supplier, has purchased Professionals for inventory control and other applications at each of its 71 field locations which stretch from Michigan to an exploration rig in the Gulf of Mexico. The Professionals will eventually be tied into an inter-office communications network of 11 VAXs. Michigan/Wisconsin Pipeline is a subsidiary of American Natural Resources,
o Gordon Foods of Michigan is implementing a statewide network of Rainbows to be used for menu planning and other applications.
o In the educational market, recent sales include New York Institute of Technology, Boston University and Case Western Reserve. Programs include quantity discount agreements so the schools can resell personal computers to students and faculty.
o The District of Columbia
public school system is installing Professional 350s
in each of its 200 schools for the administration of
test scores and computer science education.