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Volume 3, Number 5                                                                                 October 1984


Customer Satisfaction As Digital’s Number One Priority


Government Validates Digital's Ada Compiler


Announcing DECWORLD ’85


Investor Interest Expands Convertible Bond Issue


Digital’s Software Development Strategy by Bill Heffner, Manager, Base Systems Software Engineering


CAEM Reorganizes To Focus On Engineering & Manufacturing


Storage Systems Reorganizes


GIA Manufacturing And Engineering Formed


New Industry Marketing Group For Telecommunications


F&A Changes Announced


Dick Farrahar Named Engineering And Manufacturing Personnel Manager


John Mccredie Named Director Of External Research Programs


What Happened To The R&E Tax Credit? By Bruce Holbein, Manager, Government Relations

Customer Satisfaction As Digital’s Number One Priority


Northeast Area regional and district managers attended a recent cross­-functional meeting, formally launching a Customer Satisfaction Program.


"About 15 years ago, when we put together a corporate philosophy statement," Win Hindle, vice president, Corporate Operations, told the audience, "We stated that our primary goal is not growth, but to be a quality organization and do a quality job. As we achieve quality, growth and financial perforamce come as resutls. Today, I think I'd change only one thing from the words we wrote 15 years ago: On the top line, I would write, 'Quality equals customer satisfactin.' That remains our philosophy.


"We are elevating customer satisfaction to the number one priority of the company. The customer set that we are targeting for the future demands an increasing level of service and satisfaction. That's brought about by the increasing competition and by the realtive inexperience of these customers, in such areas as the commercial, office and small business markets.


"our challenge is to meet the needs and expectations of those customers, and to provide the kind of satisfaction that will allow us the same degree of penetraion and quality that we have achieved in technical markets.


"Surveys have shown that in specific areas, such as operating systems and field service, Digital ranks as the best int he industry. However, in terms of overall satisfaction with all aspects of customer relationships, we rank behind Hewlett-Packard and IBM. In two or three years, we want Digital to be recognized as providing a higher degree of customer satisfaction thatn anybody else int he indsutry. In situations where a tradoff is necessary betwen profit/growth and quality/customer satisfactino, quality and customer satisfactino must be our top priority.


"Waulity/reliability is the battlefield of today's economic war," added Frank McCabe, Corporate Quality manager. "The challenges are just as much cultural as they are technical. There is only one person who decides how successful we are, and that's the customer. Focusing on the customer ensures we ahve the right strategies and programs and processes across the company. Customer satisfactin is by far the fastest way to grow profit margins today.


"Competitively, carrying the perception of being number one in customer satisfaction is a tremendous advantage. Once you have clearly established that reputation, it can last for many years.


"We have the reputation of well-engineered products. If we can translate that into a perception of customer satisfaction leadership, by focusing on excellence in our processes and systems, we could then ratchet ourselves into a premium price situation.


"The Corporate Quality organization is committed to directing an intense focus across the company to ensure that all the strategies, programs, actions, measuements and results, supported by the right education and structure, involve all 85,000 employees in the goal of being number one in the industry in Customer Satisfaction.


"Customer satisfaction has its own meaning for every individual function. In Manufacturing, the traditional focus is on the metrics within the plant. But as each plant throughout the company focuses on its own narrow metrics, the chances of them ultimately focusing on the larger customer satisfaction metric are very low. In the future, the measurement criteria in Manufac­turing will focus in on areas like warranty costs. Instead of ’assemble, test, fix, change,' the emphasis has to be on getting it right the first time. In terms of the quality of our vendors, we are moving toward expecting and demanding parts per million instead of inspecting parts per hundred.


"In Engineering, the main interest has historically been in the performance of the products. Now, Time to Market, Systemness of Products and Systems Reliability are even bigger issues. In the past, the approach was to design, breadboard, test, change. Now Engineering is moving to simulation: build and be right.


"Besides having the most direct day-to-day impact on customer satisfaction, the Field can also help in the area of order administration, customer interaction and feedback of data from customers. The number of changed orders per system must shrink. When an order changes multiple times during its cycle, not only does it have a significant impact on the customer, but it also has a large impact on us. We may end up with a system sitting on the shipping dock, having to be reconfigured. That represents a dissatisfied customer and, also, very high cost to us.


"Encouraging progess is being made in many areas of the company, as indivi­dual managers take hold of the processes and drive for quantum improvements in performance — as evidenced by recent gains in the VAX problem install­ation level and order administration cycle times."


Government Validates Digital's Ada Compiler


Digital's VAX system Ada* compiler has been fully validated by the U.S. government. It will now undergo testing at selected sites throughout the country before public release.


The Ada programming language, mandated by the U.S. Department of Defense (DoD) for mission critical applications, suits a variety of computing needs, including systems, computational and general programming, and real time.


"Two or three other companies have been validated, but nobody with a com­piler that can generate code as efficient as ours. This will be the indus­try leader," boasts Bill Heffner, manager, Base Systems Software Engineer­ing. He explains that a compiler is software that takes instructions written in a programming language and converts them into machine instruc­tions .


IBM's compiler has not yet been validated. Data General's has been vali­dated, as have been those of a few independent software houses. "Our version is much more complete," says Bill. "A typical program will run far faster on a VAX system than on anyone else's hardware. No one has validated a compiler of this magnitude."


Official validation of the Ada compiler for VAX systems culminates Digital's efforts in a project that began in the late 1970s. Internally funded, the development of this compiler represents Digital's commitment to and belief in the future of the language and in the importance of the government market.


Why another language?


"The government was spending an inordinate amount of money trying to get their applications to run on different machines and, as technology changed, to move up to new machines," Bill explains. "First they said, 'Let's move up to a higher level language as opposed to machine language.' So they moved up to languages like FORTRAN and COBOL. Then they found that every vendor had a different dialect of those languages. So the government decided to put together a massive effort to define a language that could serve as a standard throughout the world for anybody who sells computers to the government."


In 1973, DoD software costs were $3.5 billion and rising, and DoD was using more than 450 languages on more than 200 different computer models. To put an end to this "Tower of Babel," they formed a High Order Language Working Group (HOLWG) to:


o formulate requirements from each service area,


o evaluate existing languages, and


o make recommendations for a solution.


HOLWG's goal was to develop a single language for software for embedded (realtime) applications. Ada was the result of the program they initiated.


Now, according to DoD Directive 5000.13, the Ada language is required for all mission critical systems entering advanced development in January 1984. It is also required for all programs entering any engineering development in July 1984. And DoD also encourages Ada use in other applications to help reduce overall development and support costs.


"Everybody who gets a contract to produce any kind of software for the government will be expected to write their applications in Ada," explains Bill. "In other words, this is a product that Digital has to have."




To prevent the proliferation of multiple versions of the language (which would undermine the goal of uniformity that led to its development), the government has instituted a rigorous validation procedure. " An Ada compiler has to pass about 2000 government-mandated benchmark tests to make sure the software implements everything that it is supposed to and to check to make sure you didn't implement anything extra," says Bill. "First you have to run these tests on your compiler yourself and mail the results to the government for certification. If they like what they see, they send a validation team to your site to run those same tests again. Then and only then do they officially "validate" your Ada compiler.


"Validation of our Ada compiler was an important landmark," says Bill. "Much of our government-related business depends on this. And our compiler is, by far, the best around. We have a good opportunity to be industry leaders in this field."


The government wants to make sure that there is only one version of the language — that compilers developed for different computer hardware all support the same language, not just a subset of it, and that they do not add features to the language. The goal is total consistency.


"In the case of FORTRAN, for instance, companies compete to 'enrich' the language, adding to it and improving it," notes Bill. "With Ada, that approach is impossible. Here vendors will compete on the basis of the compiler that translates the language for their machine."


* Ada is a registered trademark of the U.S. Government (Ada Joint Program Office) .


Announcing DECWORLD ’85


Digital will hold a sales exposition called "DECWORLD '85" for Digital's existing customers and sales prospects. "The trade fair will demonstrate Digital's computing style and capabilities and will showcase new products," says Ed Kramer, vice president, Technical Marketing. Ed has named Mark Roberts, who is Operations manager for Western and Central Area, to be Senior Marketing manager for the event. Mark and Ed will co-chair the DECWORLD '85 Strategy Committee.


DECWORLD '85 will be held December 5-11 at the Hynes Auditorium in Boston. An Employee Day will be scheduled sometime over the intervening weekend.


Independent Survey Rates Digital Field Service #1 In Industry


Digital's Field Service organization is considered the best in the industry by customers, according to the results of a recent independent customer survey.


International Data Corporation (IDC), an independent industry survey organi­zation, asked customers to rate their current service suppliers on a scale of one to five (five being the best) in several areas. Among the 10 major vendors included, Digital was rated as having the best overall field service organi zation.


Digital also had the best overall rating in the area of "critical service factors," coming out on top in nine of 12 individual categories: hardware repair; rapid service response; preventive maintenance program; service of field engineer; service of field management; quality of service; telephone diagnostic capability; emergency repair during contract hours; and emergency repair during non-contract hours.


The results indicate an improved position in customer satisfaction. A year ago, Digital's Field Service was consistently rated third in independent surveys, behind Hewlett-Packard and IBM.


"Our improvement in the area of customer satisfaction, as reflected by this survey, is extremely encouraging," says Dick Poulsen, vice president, Field Service. "It shows our ability to continually assess our performance, set goals for ourselves and achieve those goals. But there is room for still more improvement towards the goal of having the most satisfied customers in the industry, hands down."


Investor Interest Expands Convertible Bond Issue


Digital recently raised $400 million by selling convertible subordinated debentures. The company had initially planned a bond issue of $300 million, but investor interest prompted Digital to expand its offfering to $400 million.


The double-A rated bonds at par ($1000 each) essentially sold out the same day they went on sale. The bonds are due Sept. 1, 2009, carry an interest and are convertible into common stock at $114 a share. That 21% conversion premium over the Sept. 6 closing price.


Net proceeds of the sale will be added to working capital, and together with internally generated funds will be used to finance capital expenditures and additions to inventories and accounts receivable, as well as other general corporate purposes.


Digital’s Software Development Strategy by Bill Heffner, Manager, Base Systems Software Engineering


Software is the part of the computing system that the customer uses every day. And our software strategy has to ensure that we give customers the performance, compatibility and ease of use they need.


On the PDP-11, we didn’t have an overriding strategy. As a result, we had multiple offerings which included the RSX, RSTS, and RT operating systems.


When the time came to do the VAX family, we decided on a three part program. First, we would have a single hardware architecture so we could build a hardware family, giving customers choices — like the 780 and the 750 — to meet their needs in terms of cost, capacity and performance.


Second, we would have one and only one operating system, namely VMS; and based on that operating system, we would develop one and only one version of each language compiler. So today there is only one FORTRAN compiler that runs on every one of our family members. And there is only one VMS operat­ing system for all of our family members.


This design discipline gives us something that nobody else in the industry has — including IBM. The user can move an application from the bottom of our VAX line to the top and be assured that it will not change. So, the customer who wants to grow can do so in two different ways — by buying a larger VAX system that can run the same software, or by buying more small VAXs and distributing computing power around the organization.


The third part of the strategy is the interconnect. We will tie our com­puters together with one protocol, namely DECnet, so all our computing systems can talk together. That means companies that distribute their computing among many machines can share data among those machines, when appropriate; and computers can serve as a means for company-wide communica­tions, through applications like electronic mail.


Since developing our original strategy, we have made a few minor changes. When it was time to put the VAX architecture on a chip, we found it wouldn't fit. Therefore, we had to define a subset architecture, which we call "MicroVAX." So, we really have two VAX hardware architectures; but to the user there is no difference. Essentially, an application in VMS will still run on a Micro VAX system, although part of it is emulated in the software (MicroVMS) as opposed to being executed in the hardware.


Also we have gone more into heterogeneous networks than we thought we would. Originally, we thought everything would be 32-bit. We have now concluded that we must not only include our 16-bit family and 36-bit family, but even other computers, such as IBM. So our DECnet architecture has expanded to be heterogeneous.


Another major change is that we are now selling ULTRIX, a version of UNIX*, as a standard operating system for VAX computers. There are people who would like to learn one and only one operating system -- UNIX — no matter which vendor's hardware they buy. To meet their needs, we are taking UNIX and repackaging it to run on our hardware. So we now have two operating systems for our VAX family.


*UNIX is a trademark of AT&T Bell Laboratories, Inc.


CAEM Reorganizes To Focus On Engineering & Manufacturing


Computer-Aided Engineering & Manufacturing (CAEM) is reorganizing to focus its activities around two main strategic business groups: the engineering and manufacturing areas. Bill Steul has been named manager of the Engineer­ing Systems Group (consisting of electronics, mechanical design and earth resources engineering), and Jim Dale is manager of the Manufacturing Appli­cations Market Group (consisting of manufacturing management and factory automation).


A new CAEM group marketing function will concern itself with integrating the efforts and messages of those two application groups, and developing strat­egies and programs to promote applications that transcend the engineering/- manufacturing boundary. Technical Marketing reports to Fred Smith, and Dave Copeland manages CAEM*s technical development activities. This development includes Computer-Integrated Manufacturing (CIM) and a variety of other efforts underway elsewhere in the company and through sponsored university programs. Dave will also manage the program for joint development activi­ties between CAEM and Digital's Manufacturing Information Systems. The CIM engineering group reports to Steve Gutz who reports to Dave.


"A little over a year ago we brought the old Engineering Systems Group (ESG) and Manufacturing, Distribution & Control (MDC) together," explains Peter Smith, vice president, CAEM. "We did this to develop a consistent marketing theme and to develop a computer integrated manufacturing (CIM) strategy. We wanted to focus on the applications that our customers need when they move their products from engineering design into manufacturing.


"Now we want to put renewed business and applications focus on engineering and manufacturing. In other words, we want the best of both worlds -- to work together as a team and yet to provide enough individual focus on engineering and manufacturing to make sure we have the applications our customers need.


"We spend a lot of time working on outside partners so they can bring their applicatinos together with our systems. We also spend a lot of time with Central Engineering, working with them on future product direction. Our goal is to provide our customers with the best centrally engineered computer products for their engineering and manufacturing requirements. CAEM's direct development activity focuses on products which integrat the engineering and manufacturing applications developed by our cooperative marketing partners or Digital OEMs. For instance, a customer may be using a design applicatin from one third party softwaare house and an analysis application from another. Our strategy is to use VAX Information Architecture products to develop an engineering data manager for all the data produced by thse separate but closely related applciatins. In this way, we combine the strengths of our corporate products with the application expertise of our coooperative marketing partners and Digital OEMs.


"We have about 45 cooperative marketing partners providing applications, and a number of Digital's OEMs are active in this area as well. We want to support them rather than compete with them in the area of applications. So our development efforts focus on providing the glue — the integration tools that customers need to tie their whole automated engineering and manufactur­ing efforts together," concludes Peter.


Storage Systems Reorganizes


Storage Systems has reorganized part of the group to more effectively manage process-intensive parts of the business, to integrate the manufacturing organizations, and to insure the improved integration of strategies and plans.


A Process Technology group, headed by Charlotte Frederick, has been estab­lished to manage the development and manufacturing of process-intensive key components of storage technology that are shared by multiple products. This group will initially include heads engineering and manufacturing, and plated media development and manufacturing. At a later date, it will also include thin film head technology.


Greg Plakias will be manager of an integrated manufacturing operations group designed to create a worldwide manufacturing strategy and plan, achieve customer satisfaction, and interface with Manufacturing. The group consists of all product manufacturing units and their support functions (materials, quality, and manufacturing operating finance).


Storage Systems includes manufacturing facilities in Shrewsbury Springs, Enfield, Springfield, Tempe, Kaufbueren, Singapore and The group's Engineering sites are in Shrewsbury, Colorado Springs (the Reseach and Development Center) .


A new committeehas been formed to insure the integration of plans and strategies within Storage Systems. Called the Storage management Committee, it will focus on storage systems technology and worldwide product/business plans.


"I believe all of these changes will enable us to more effectively meet our manufacturing and finance objectives, and integrate our approach to the process technologies key to our future. The Storage management Committee strengthens the international dimension of our organization," explains Grant Saviers, vice president of Storage Systems.


GIA Manufacturing And Engineering Formed


Due to rapid growth of business int he General International Area (GIA), Digital is integrating its Manufacturing and Engineering operations to better suppoprt that increasingly important market area. Under Dick Yen, vice president, the new organizatino, GIA Manufacturing and Engineering, includes manufacturing operations in Kanata, Puerto Rico and the Far Est and the GIA Business Office. GIA Engineering alignment is being reviewed an will be announced at a later date.


New Industry Marketing Group For Telecommunications


Digital has formed a Telecommunications Industry Marketing Group to focus efforts on strategic worldwide telecommunications companies, equipment manufacturers, and newe network services companies. Such companies include European PTTs; U.S. telephone operating companies; telecommunications manufacturers like Northern Telecom and Rolm; network services companies like GTE Telenet, MCI and Western Union; and larger telecommunication conglomerates such as GTE, ITT, Siemens and AT&T. Digital has long been a elader in supplying products and services to this industry.


This new group has responsibility for defining product and application requirements, and for marketing and promoting all appropriate Diigital products and services to this industry. It also has the task of analyzing and proposing new marketing opportunities for Digital in the fast-growing telecommunications services market.


Until a manager is named, Bob Schmitt, manager, Communications Marketing, will serve as acting manager of Telecommunications Industry marketing. The new group reports to Bob Hughes, vice president, Busienss and Office Systems (BOS) Marketing.

F&A Changes Announced


Bill Helm, Treasurer, has been given additinoal responsibilites as manager of Field Operations Finance and Administratin. He will report to both Al Bertocchi, vice president, Finance and Administration, and Jack Shields, vice president, Sales and SErvice. In his new position, Bill will have worldwide F&A responsibility.


Ilene Jacobs, Assistant Treasurer, has been appointed Group Treasury manager, replacing Bill Helm in that capacity. She will continue to be Assistant Treasurer and continue to report to Bill.


Ivan Pollack has been named to the position of Marketing Finance and Administration manager, reporting to both Al Bertocchi and Win Hindle, vice president, Corporate Operations. He replaces Bill Steul, who has accepted a position as group manager of Engineering Systems within Computer-Aided Engineering and Manufacturing (see realted article). Ivan is currently Field Operations Controller. He will assume his new duties in mid-October.

Dick Farrahar Named Engineering And Manufacturing Personnel Manager


Dick Farrahar has been named Personnel manager, Engineering and Manufactur­ing, responsible for all Personnel activities in these organizations. He reports to Jack Smith, vice president, Engineering and Manufacturing, and John Sims, vice president, Personnel.


Dick has been with Digital since 1970, including six years in the Field and six in Manufacturing. For the past two years, Dick has been Personnel manager for Marketing and Finance/Administration, and has served as a member of the Personnel Management Committee.


John Mccredie Named Director Of External Research Programs


John McCredie has been named director of External Research Programs, re­porting to Sam Fuller, vice president, Corporate Research and Architecture. In this position, John will be responsible for identiying critical research areas within Digital and matching them with appropriate external research institutions. Resulting contracts should benefit both the corporation and the educational community. He will also serve as a member of the Education Investment Review Board and staff member for Joel Schwartz, vice president, Educational Marketing.


What Happened To The R&E Tax Credit? By Bruce Holbein, Manager, Government Relations


The high technology industry's first appearance in high stakes tax lobbying ended on a disappointing note on June 18th when Congressional conferees failed to extend the 1985 expiration date of the R& E tax credit.


R& E tax credit was born as part of the political war that gave rise to the great tax cut of 1981. This year, however, the R&E credit wason its own at $2.1 billion, it was the largest revenue loser in a revenue bill.


The goal of the high technology indstury was either, at best, to make the credit permanent or, at worst, to hae its expiration date extended past 1985. Neitjher goal was attained, and the credit is still schedule to expire at the end of calendar 1985.


What can the high technology industry do to extend the credit next year?


We need to establish a broad base of support within Congress for the credit. Only 150 of the 435 members of the House of Representatives co-sponsored the bill to make the credit permanent. Many of these co-sponsors were junior members of the two parties, and 40 of them resulted from Digital's direct involvement. Republican leadership was neutral; the Democratic leadership remains hostile to the credit.


The leadership of both parties allowed only a handful of "revenue losers" to and our industry came up short commodity brokers, life insurance companies, the securities industry and the tobacco industry. Each of these successful gruops had a legistlator int he tax conference who was their chapmion with the political clout necessary to protect their issue.


In contrast, most of the high technology companaies allowed thir trae associations to manage the effort to extend message to Congress about the importance of the credit to corporate R&E was diffused. If our industry wants the credi to survive a major tax increase in 1985, many companies will have to treat credit not as an incidental lobbying matter, but as a priority corporate project.


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