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Volume 3, Number 2                                                                         June 1984


Business Computer Group Formed


Office And Business Engineering Groups Realign


Digital's Distribution License -- Working With U.S. And Host Governments On Export Compliance


Two Vice Presidents Undertake New Responsibilities


Making Digital #1 In Customer Satisfaction


Digital Raises $350 Million


VDT Legislation In The United States by Bruce Holbein, Government Relations Manager


VMS and UNIX Designed For Different Markets


Digital Rises To 84th Postion In Fortune 100 List


Digital Growing Strong In Systems, After Mid-Life Crisis, Says Forbes

Business Computer Group Formed


To accelerate its expansion in the small business computer market, Digital has brought a number of its business-related marketing efforts together in a single group.

The new Business Computer Group Business includes the resources of Commercial OEM, Small Busienss (which was part of Business and Office Systems Marketing), the Digital Business Centers and the retail marketing operation of the Small Systems group. It is headed by Ward MacKenzie, vice president, who also continues to head the OEM Group.


"Digital is a major force in delivering computing power to small business through such channels as retailers, OEMs, Digital Busienss Centers and Authorized Digital DEalers," says WArd. "By bringing these efforts together in one organization, we are aiming for more efficient penetraion of this market through better coordination of strategies, product offerings, marketing support and customer services. Also, to meet the needs of small businesses, marketing, sales and service need to work together more closely than in other markets. The Business Computer Group will bring a new level of management consistency from marketing to the field operations which deliver our products and services to the customer."


John O'Keefe, formeerly manager, Small Business Group, has been anmed marketing manager, and Jim Willis, formerly manager, COEM, is channels manager of the enw group.


With reetail marketing moving to this new organization, marketing of personal computers to end users will be done by other groups. There will no longer be a Small Systems Group. Joel Schwartz, vice president, who formerly headed that group, is a member of the transition team and will assume a new corporate position at the beginning of the fiscal year.

Office And Business Engineering Groups Realign


Digital's office and business engineering efforts have been more effectively meet the needs of targeted customer bases.


Bob Daley is the manager of BOS Engineering, reporting to Bill (B.J.) Johnson and Bob Hughes. He is responsible for Unified Office

Systems/Word Processing, which reports to Bob Dockser; Distributed Information Systems, for which Fred Howell is the acting manager; the Controller, Bob Cohen, and Personnel manager, Ken Kimball. The DECmate Program Office, which is managed by Don Young, now also reports to Bob Daley.


"Bob is responsible for ensuring that BOSE systems strategies and products are developed," explains Jack Smith. He will also provide the Engineering linkage with BOSE Marketing, which Bob Hughes manages.


In the small business area, three engineering groups now report to Ward MacKenzie. They are User Engineering, managed by Peter Conklin; COEM Soft­ware Engineering, managed by Gerry Hornik, and Business Systems Engineering, which Ollie Stone manages. (See the previous article about the new Business Computer Group.)

Digital's Distribution License -- Working With U.S. And Host Governments On Export Compliance


For the last few months, Digital has been exporting its products from the U.S. under a special distribution license. While there hae been no significant delays in shipments to customers, export issues are a matter of continuing importance. Through an industry-wide coalition, Didital is working closely with the government to resolve the complex questions that are involved.


Basically, the Export Administration Act, under which U.S. firms are enabled to ship their goods to foreign destinations, expired several months ago. Since then, companies have been shipping under congressinoal extensions of the old act and, currently, under presidential emergency powers, while the U.S. Congress is debating the contents of the new law. At issue is how to prevent commercail high technology products that might ahve a dual military use from getting into Estern Bloc countries, while at eht same time maintaining the competitive viability of U.S. technoogy exporters in the worldwide marketplace.


While new legislation was being debated, the two-year distibution license issued to Ditial expired. So for the interim period, the Commerce Department, which administers the law, has issued the company temporary licenses.


Several recent, highly ppublicized incidents of Soviet attempts to obtain U.S. computer equipment have involved Digital products. Apparently, the quality, functinoality and high reliability of VAX computers, in particular, have made them prime targets. Digital has been working with the U.S. government and other governments to put in place programs to identify and stop illegal movement of its products to the Eastern Bloc.


Digital's temporary licenses have included some special requirements. The company has been asked to provide a Certificate of End Use for all shipments of VAX systems and VAX-unique peripherals outside the U.S. For purposes of this certification, an OEM is considered an "end-user."


Cliff Clarke has been asked by Win Hindle and Jack Shields to head a task force to help coordinate and manage company resources while such a special kind of distribution license is in effect. "We're fully cooperating with the government — and doing so in a way that minimizes any impact on our customers," says Cliff. "We gather information about how customers intend to use the equipment from our sales people, who are normally responsible for understanding their customers' needs. Information is collected and consoli­dated by order processing people in Geneva (for Europe) and in Nagog (for G.I.A.), and then transmitted to Digital people in Washington. The infor­mation is then submitted to the Department of Commerce for review. Review by Commerce takes about ten working days, which does not affect our concurrent order processing and delivery cycle."


Cliff emphasizes that as the second largest computer company in the world, Digital will inevitably become involved in more such issues. "We have to learn to be very flexible in anticipating and living with the inevitable changes in policy that nations go through as they address their employment, defense and economic issues, as they implement social programs that are important to them, and as they try to balance the conflicting demands of various constituencies. We operate in a global economy.- Cooperating with various governments on issues such as this is just a part of doing busi­ness ."


Two Vice Presidents Undertake New Responsibilities


Ed Kramer and Bill Long have undertaken new roles within the corporation. Bill, who has been vice president of the Technical Group, will become res­ponsible for several special corporate-level assignments. Ed, who has been vice president of Corporate Marketing, will take charge of the Technical Group. Both individuals will continue to report to Ken Olsen.


Ed, who has been with the company since 1967, brings extensive sales and marketing expertise to the Technical Group, which consists of Education Systems, Medical Systems and Laboratory Products Groups. He will retain responsibility for Artificial Intelligence Marketing, and take on responsi­bility for DECUS and the Marlboro, Mass., site. On a temporary basis, the Corporate Communications function (A & SP) will continue to report to Ed, and the Strategic Planning and Marketing Finance functions will report to Win Hindle.


Bill, who has been with Digital for 21 years, will be responsible for developing a process to better understand the management issues facing Digital. He will also become involved in a special DECtalk application for the blind, and in the development of executive-level applications for personal computers.


Making Digital #1 In Customer Satisfaction


In his new position as Corporate Quality Manager, Frank McCabe is developing a process that will weave quality more thoroughly into the fabric of the company.


He and his staff are formulating a DEC-specific process for quality that incorporates the best learnings from people like Deming, Crosby, and Juran, as well as our own internal leaders. "We are building on the unique strengths and perceptions of Digital people and products that are not available in less innovative environments. The focus of our quality process is customer satisfaction," explains Frank.


"At Digital, we are now committed to be number one in the industry in customer satisfaction. Meeting this most most challenging goal requires the highest quality products, systems and services on a sustained basis, and the most responsive processes and people in day-to-day interaction with our customers," emphasizes Frank. "It isn't enough to just handle our internally-focused quality. Our plans, goals and daily actions really must add up to customer satisfaction... the customer will decide.


"When we clearly become number one is customer satisfaction, we calculate reward to the company is 20% of revenue. Half of this will come from preventing defects. The other half can will come from value our customers will place on our products and services, once we have a firm reputation for being number one in customer satisfactin.


"We can only achieve this ambitious goal if every employee understands his or her part in the quest. This will take tremendous coordination, collaboration and communication. It's an ambitious process of change. And it is essential to Digital's long-term success.


"We have historically valued our products. Now we need to put the same focus and rewards for excellence on our processes and systems," explains Frank.


Digital Raises $350 Million


In February, Digital raised $150 million by issuing five year 11-3/4% notes in the Eurodollar capital markets. An additional $200 million was raised in April in the U.S. capital markets through the issuance of $100 million of ten year 12-5/8% notes and $100 million of 30 year 13% debentures.


Much of the cash available to the company at the beginning of FY84 was used to finance asset growth during the year. The proceeds from the recent financings were used to replenish those cash balances.


VDT Legislation In The United States by Bruce Holbein, Government Relations Manager


Legislation to regulate the design, installation and use of video display terminals (VDTs) is now pending in over a dozen states. Moreover, a Con­gressional Subcommittee is holding a series of oversight hearings into health and safety issues involving VDTs.


With respect to health and safety, independent scientific studies conclude that there are no legitimate health and safety issues related to use of a VDT terminal: "There

are no legitimate health and safety issues related to use of a VDT terminal: "There is no reason for any person, male or female, young or old, pregnant or not, to be concerned about radiological health effects from VDTs." Investigation of Radiation Emissions from Video Display Terminals, Ministry of National Health and Welfare (CAnada), 1983, p. 27.


Moreover, the comfort of the VDT operator does not lend itself to legisla­tion. It requires knowledge on the part of the operator and the manager about adapting the workplace to individual needs (lighting, glare, adjus­table height levels, tilt adjustments, supportive seating). Office equip­ment and furniture companies are addressing these issues and are marketing ergonomic furniture. Indeed, government regulation would slow this rapid process of change and adaptation.


Third, businesses perform an endless variety of so-called "VDT work." Within the three broad categories of VDT use, (1) data entry, (2) data inquiry and (3) interactive communication, there are thousands of unique applications. It is impossible to regulate the functions of one type of terminal work without it interfering with the productive work of another type of office procedure.


Nevertheless, labor organizations continue to press vigorously for the enactment of legislation establishing mandatory VDT work rules, in the hope tht if they can persuade one state legislature to enact any bill which singles out VDTs, they will have gained legitimacy to press on in many states and at the federal level.


In Maine, the Board of Occupational Safety & Health last month voted not to issue rules to regulate VDT work among state employees. The Board was persuaded by the information presented to it by industry that there were no legitimate health and safety issues involved in VDT use.


At the same time, a coalition of manufacturers and users in Massachusetts bottled up VDT legislation in a study bill for the third year in a row. But with each succeeding year, supporters of this legislation have obtained more co-sponsors and have raised the profile of the issue.


Manufacturers and users of VDTs have come to understand that in addition to opposing VDT legislation, they must also communicate to public officials and to operators, through public information campaigns, about VDT safety, proper installation and correct use. This information is readily available, but it has not always been adequately communicated.


In response to this need, CBEMA and the Connecticut Business & Industry Association (CBIA) have recently persuaded Connecticut legislators that rather than enact VDT legislation, they should accept an industry-sponsored public information campaign.


Digital has been very active in opposing VDT legislation. At the same time, the company has been leading industry efforts to develop and communicate accurate and useful manuals for operators and managers about VDT design, installation and use.


VMS and UNIX Designed For Different Markets


Confusion occasionally occurs about Digital’s position on VMS and UNIX, two major operating systems for minicomputers. As a result, MGMT MEMO talked with Bill Heffner, manager of Systems Software. Bill spoke about the subject at the February State of the Company Meeting, which was featured in the last MGMT MEMO.


"We are talking about two very different markets when we think about VAX/VMS and UNIX. VMS is Digital's proprietary operating system, which means it only runs on the VAX. UNIX is the operating system, which was developed by AT&T, and is being touted as the industry standard operating system. Indus­try standard simply means that it can be used on many different minicompu­ters.


"At Digital, we sell both VMS as well as our versions of UNIX (ULTRIX-32 for the VAX and ULTRIX-32M for MicroVAX), which support customers already using UNIX. We also have VNX, which is based on VMS and provides UNIX-like capabilities in a VMS-operated setting."


Bill explains that "90% of our sales are based on VMS, but we recognize the importance of the industry-standard market.


"In reality, VMS offers more capabilities than UNIX. It has integrated networking, a full set of languages and tools, as well as information management capability. It supports VAX clusters and brings with it the full benefits of the full VAX architecture.


"We sell VMS unless a customer specifically wants UNIX or one of our UNIX- like products. The latter two are often preferred in the research or academic environments," concludes Bill.


A new simultaneous annoucement program gives the sales force the materials to run a seminar to present major new products to customers as these pro­ducts are announced to the outside press. It means sales people will be better able to answer customer questions in a timely manner, and they will be able to discuss overall strategies and support products that might be slighted in the press coverage of the announcement.


"The trade press reports what they think is important. The simultaneous announcement program enables us to get the full story to a vast number of our customers. Since the program encourages the greatest possible involve­ment of local sales organizations, it makes it possible for the sales force to respond to customer requests for product information, and for them to quickly qualify customers," says Dick Mollin, Corporate Sales Office.


The simultaneous announcement program includes training identified sales and software people about the products, sending support videotapes, slide presentations, and written reference and promotional material to identified "announcement" locations around the world.


This program was started with the VAX 11/785, videotex and relational data base.announcements in early April. The major press conference took place at the World Trade Center in New York City. At the same time, key customers in 27 U.S. locations and two Canadian locations learned about the products at the special announcement sessions. Earlier that day, sales representatives were given the opportunity to view the same program.


"We were very pleased with the results and learned a lot of ways to improve the process. We reached about 3,000 customers with a consistent message and quickly qualified prospects for the new products," says Dick. He notes that this announcement program will be expanded to include more worldwide sites, but that it will only be implemented for major product releases.


"We don't want to overuse this program because we want to ensure its posi­tive effect on our sales force and customers," explains Dick. The next simultaneous announcement program is expected to reach some 15,000 customers at more than 100 locations.

Digital Rises To 84th Postion In Fortune 100 List


Digital increased its standing to 84 from 95 in Fortune magazine’s annual listing of the nation's largest corporations. This is the tenth consecutive year that Digital has improved its position in the list.

Digital Growing Strong In Systems, After Mid-Life Crisis, Says Forbes


In its May 21 issue, Forbes magazine concludes that Digital's recent troubles were "growing pains." "In this new era the real product is the system, not any one of the parts," notes the article, entitled "Mid-life Crisis." And systems -- a wide array of computer products and easy and efficient ways to link them together — are Digital's strength.


Referring to the office market, which reportedly is doubling every year and could reach $5 billion in three years, Forbes says, "There is high-powered competition: IBM, Wang, and smart smaller companies like Data General and a lot of would-bes. But DEC does have advantages. IBM has numerous product lines that still don't link well --  it has been slow at this."  privacy statement