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Volume 3, Number 7____________________________________________________________
December 1984
Jim
Osterhoff
Named Vice President And Chief Financial Officer
Compliance
With
Export Laws Coincides With Efforts To Curb Brokering
Engineering
Realigns
To Implement ’Styles Of Computing’ Strategy
Jack
Mackeen
To Head Realigned OEM Group
VAX
8600
("Venus") - More Than A Mainframe
Field
Operations
Realigned In Europe
GIA
Manufacturing
And Engineering Organization
Steve
Bourne
Joins Digital As Senior Consulting Engineer
1985
U.S.
Salary
Planning Guidebook Arrives In January
Digital
Named
#2 In Software Products And Services
U.S.
Congress
Approves Tuition Refund Exemption
Jim Osterhoff has been appointed as vice
president and chief financial officer, reporting to Ken Olsen,
president. He will assume responsibility for the financial and
legal functions of the corporation, succeeding Al Bertocchi.
Since 1979, Jim has served as controller of
Ford Motor Company's Tractor Operations, managing their financial
and MIS functions. His responsibilities included business
planning, financial analysis, accounting and internal control,
systems development, and operations in North America, Europe, and
Brazil. Jim previously held a succession of financial management
positions at Ford, including vice president of Finance and chief
financial officer, Ford Motor Credit Company; and controller, Car
Operations, North American Automotive Operations.
Commenting on the appointment, Ken said, "We
are pleased to have an individual of Jim's stature and experience
join Digital. As chief financial officer, he will be building upon
the strengths of our finance function to meet the demands and
complexities of controlling Digital's expected growth in the
coming years."
Al Bertocchi, who has managed Digital's
worldwide financial affairs for the past 12 years, is stepping
down from his position as Digital's chief financial officer. "We
are sorry Al will be leaving day-to-day operations, but I am
please to report that he will be available to consult with us on
financial matters and other key corporate issues," said Ken Olsen,
president. Al joined
Digital in 1971.
Digital gained important insights from last
year's much publicized incidents involving attempted diversion of
VAX computer equipment to the Soviet Union This experience has
helped in developing business plans export situation and the
definition of 'OEM.'
"The investigations and audits we conducted
plus the investigations, and audits conducted by other agencies
involving other companies, all indicate that smugglers commonly
use individuals posing as legitimate OEMs to obtain embargoed
equipment," explains Cliff Clarke, manager, International Trade
and Policy. "So our efforts to ensure strict compliance with
export laws involved careful scrutiny of what we mean by the term
'OEM' and scrupulous and diligent attention in managing our
relationship with OEMs. It happened that at the same time the
company was examining those same issues relative to problems with
'brokers.' So the export experience helped us develop necessary
business plans.
"An OEM is a company that takes our product and
enhances it in some materiÂally significant way, adding to its
value by adding technical functionality and marketing activity. We
choose not to sell in quantity and at discounted prices to
'brokers' — people who will merely resell our products at
disÂcounted prices.
"Our concern about brokers stems from our
feelings of responsibility toward the final customer," says Cliff.
"Brokers tend to have no regard for their customers' needs.
Unfortunate situations arise all too often, where the wrong
product or an incomplete set of products is sold and the customer
is left with a total mish-mash of problems. Then the customer
comes to us for a solution, since the product was originally ours.
Such problems reflect on our reputation for customer satisfaction.
And, even though these customers have no legal or ethical recourse
to seek help from Digital, we often end up helping them and trying
to bail them out of their difficulties, sometimes incurring great
expense.
"In addition, brokers sometimes sell our
products in remote areas of the world, without making any
provision for support. In some areas outside our normal sphere of
business, it is extremely difficult to provide service because of
licensing problems, vast distances, and poor communications and
transportation. When Digital sells directly into such countries,
we do so with scrupulous planning and qualification and
preparation, so proper spares and support will be available when
needed. Brokers, on the other hand, will dump products
indiscriminately, merely for a fast sale, with little or no regard
to the eventual support of the product. Once again, the
irresponsiÂbility of brokers works to the detriment not only of
the customer, but of Digital and Digital's reputation.
"So business reasons as well as the export
issue led us to pay special attention to the intents and practices
of OEMs. As a result of this study, in July we adopted a new set
of terms and conditions for our contracts with OEMs worldwide.
These terms outline what we expect of OEMs and our
responsiÂbilities toward OEMs. In addition, we put together a
checklist to be used in completing those terms and conditions —
all of which should give us a comprehensive look at the business
intentions of OEM companies and give us better insights into the
stockholders and management of these firms — who they are, and
where and what they truly intend to sell," notes Cliff.
Each application for an OEM contract is
evaluated by a Digital management review board made up of
representatives from the geography, the law departÂment and, on a
rotating basis, senior management from the geographies. The US,
GIA and Europe each has its own separate review board. In the US,
it
meets once a week. There are uniform and
consistent rules, but they are interpreted by local people who
understand local conditions, customs and sensitivities.
Applications are rejected when it is unclear whether the applicant
is a legitimate OEM.
Different criteria apply in the case of
personal computers. "In that case, the distribution in and of
itself is something that we value," explains Cliff. "There’s
enormous competition out there, and you've got to move huge
quantities of these products over very broad geographic areas to
be successÂful in the marketplace. Our distributors fill a
legitimate need by covering broad geographies on a reasonably low
unit cost sales. To qualify to distriÂbute Digital products that
lend themselves to mass merchandising, companies have to
demonstrate, management acumen, and marketing and sales skills. We
look at their distribution network, what saturation they will be
able to achieve in certain market segments, and what kind of sales
and marketing literature they will develop to support the sale of
our products."
"During the past several months we've made
significant progress in refining and clarifying our product
strategy based on the 'styles of computing' model," says Jack
Smith, vice president, Manufacturing and Engineering. "It is
appropriate to realign our organization to assure achievement of
our goals in each "computing style."
"In particular, we want to better focus
attention on local area systems and on the development of a family
of workstations. In addition, we want development of low-cost,
high-volume systems, like personal computers, closely tied to LSI
development, because in that realm, improvements in functionality
and reductions in cost tend to be driven by advances in
semiconductor technology.
"We also need to focus on development of
multi-processor and clustered systems at both the high end and the
mid-range of our VAX family. And, of course, we have to pay
special attention to the 'systemsness' of our entire product line,
and to the software and networking products that help our systems
work together and communicate smoothly and easily with one
another."
Personal
computing, team computing and workstations
"'Team computing' (low cost, multi-user
systems), 'personal computing' (low , standalone systems), and
'workstations' (high functionality single-user systems) are under
intense competitive pressure," explains Jack.
"Over the last several years, we have made significant progress in
our semiconductor capabilities -- dealing with microprocessors,
architecture choices. Now is the time to capitalize on these
capabilities to maximize our opportunities for leadership in
workstations and low cost systems."
"So, in addition to his responsibilities for
the LSI Group, Jeff Kalb, vice president and group manager, is now
responsible for "team computing, "personal computing" and
workstation programs.
The following now report to Jeff:
o Dom LaCava, group manager of Micro
Systems Development (MSD), with responsibility for "team
computing" (including both MicroVAX and PDP-11 development)
o Barry James Folsom, group manager of
Rainbow Business Group, with resÂponsibility for "personal
computing";
o Cathy Learoyd, manager of Low End
Workstations;
o John Gilbert, acting manager of High
End Workstations;
o Ron Ham, manager of the PRO Group,
and
o Bill Picott, manager of Low End
Engineering Process Group.
"This organization will provide us with the
unique opportunity to bring our extensive experience in personal
computing, workstations, team computing and complex chip
development together into a powerful, competitive force," notes
Jack. To reflect this expanded role, Jeff's group has changed its
name to "Low End Systems and Technology" (LEST).
Local
Area Systems and Wide Area Networks
"We must put more emphasis on delivering
complete computer systems that can be effectively tied together in
local and wide area networks," says Jack. "It is critical that we
have a single focal point to assure the integration of
workstations, servers, interconnect, software and market messages
for our Local Area Systems products."
To assure that this very complex integration
task is effectively managed, Bill (BJ) Johnson, vice president and
group manager, is now responsible for Local Area Systems and
Networks/Communications groups in addition to his responsibilities
for CIM (Computer Integrated Manufacturing), BOSE (BusiÂness,
Office and Systems Engineering) , Image Systems Engineering and
EuroÂpean Engineering.
Mary Breslin, manager of the Local Area System
Program, now reports to BJ. A taskforce of Bill's current staff
will determine transition plans for their respective functions
from the Systems and Clusters (SAC) Group to the new
organizations. During this transition, these functional managers
continue to report to BJ.
Bob Glorioso, Bill Heffner and Bill Demmer, who
previously reported to BJ, now report directly to Jack Smith.
High
Performance and Mid-Range Systems
"We have segmented the VAX area from MicroVAX
all the way up to clusters by price band," explains Jack. "Today
we talk about high-end clusters. A year or two from now, we'll
also be talking about low-end clusters. Over time, the cluster
concept will permeate the whole VAX-family."
Bob Glorioso, group manager, is responsible for
the High Performance SysÂtems. He is also responsible for
supporting the needs of DECSYSTEM-10/20 customers and helping them
migrate new applications to VAXclusters.
Bill Demmer, vice president and group manager,
is responsible for the Mid-Range Systems. This includes expanding
multi-processors and parallel processors into the mid-range of
systems products as well as continuing to provide leadership with
current 32-bit Systems.
Software
Development
"Software systems provide 'the glue' to
integrate all of these capabilities into one cohesive family,"
emphasizes Jack. Reporting to Jack, Bill Heffner, group manager
for Software Systems, is responsible for VMS, ULTRIX and their
layered products development. His job is to assume visibility and
success in this critical area.
Product
Operations
"To assure we have the management systems and
procedures in place to sucÂcessfully execute our product strategy
and achieve our business plans, Jim Cudmore, vice president and
group manager, is responsible for the newly created function of
'Product Operations,'" adds Jack. "Jim will work closely with both
the Manufacturing and Engineering organizations to signiÂficantly
improve overall performance in the products dimension.
"These changes should significantly clarify
responsibilities and increase our effectiveness in providing
complete systems and carrying out our overall strategy," he
concludes.
Jack MacKeen has been named group manager of
the OEM Product Group, reportÂing to Ward MacKenzie, vice
president and group manager of OEM and the Business Computer Group
(BCG). Jack will be responsible for marketing activities focused
on Digital's technical indirect suppliers. This group now includes
the MicroComponents Product Group, the Technical OEM (TOEM)
Product Group and the newly formed Marketing Services Group. The
Commercial OEM (COEM) Product Group, formerly part of OEM, is now
part of BCG.
Jack, who joined Digital in 1961, has managed
both the TOEM and MicroComÂponents Product Groups during his
tenure with the company.
The TOEM Product Group will maintain its
traditional role of marketing products and services to indirect
suppliers of technical-application proÂducts and solutions. The
group's product focus will extend from personal computers at the
low end to the VAX 8600, networks and clusters at the high end.
This group will be managed by Eli Lipcon, who joins the OEM Group
from his current position as Operations manager of the U.S. Sales
Distribution Group. Eli has held various marketing and finance
positions with the TOEM and Personal Computer groups in the past.
The MicroComponents Product Group will also
continue its traditional market focus of chips, boards,
subassemblies and development tools for those customers who wish
to extend their use of Digital architectures below the level of
traditional systems. Dick Heaton will continue to manage the
MicroComponents Product Group.
The Marketing Services Group has been formed to
facilitate common activities between the TOEM and MicroComponents
groups. Since they market to similar customer bases, the service
functions of Marketing Communications, Market Analysis and
Planning, Program and Policy Development, Technical Support and
Management Sciences have been combined to achieve efficiency and
commonaÂlity. This group will be managed by Joe Arayas, who brings
extensive expeÂrience in the OEM business to this expanded role.
Joe has managed the planning, management sciences and policy
development functions of the OEM Group in the past.
Also reporting to Jack MacKeen are Leigh
Bodington, OEM Group Personnel manager, and Don Resnick, OEM Group
Finance & Administration manager. Leigh had been Personnel
manager for TOEM and MicroComponents. Don joins the OEM Group from
his previous position as F&A manager for the Small Systems
Group.
In addition to the above changes, parts of the
OEM Group have relocated. TOEM, Marketing Services (with the
exception of Technical Support), PerÂsonnel, F&A, and the OEM
staff (with the exception of Dick Heaton) have moved to Mount
Royal (UPO2) in Marlboro. The MicroComponents Group remains in
Hudson (HLO2), and Technical Support remains in Marlboro (MR03).
"The VAX 8600, Digital's new top of the line
VAX computer system, represents the first of a whole new
generation of VAX systems — a new generation of technology, a new
generation of performance and a new generation of quaÂlity," said
Bob Glorioso, manager, High Performance Systems, at the Oct. 31
product announcement.
The eighth processor in the VAX family, the
8600 delivers up to 4.2 times the performance of the VAX-11/780.
"With this new VAX, Digital is the only company to offer a single,
fully compatible computing environment from the desk through the
data center," noted Bob. "We have designed the VAX 8600 to serve
as both a high end extension to our VAX family and as a prominent
member of our VAXclusters. In fact, when you combine 8600s in a
VAXcluster system, the end result yields more power and more
capability than today's mainframe systems.
"A product of this magnitude requires the
contributions of many people with diverse skills, all committed to
achieving professional excellence," he emphasized. "The efforts of
people at 40 different engineering and manuÂfacturing facilities
made this product possible."
A full member of the VAX family, the 8600 uses
exactly the same 32-bit architecture and VMS virtual operating
system as every other VAX processor. VMS applications software
written for other VAX systems will run on this new system without
the need for any modification.
The VAX 8600 uses customized emitter coupled
logic (ECL) to achieve high speed CPU performance. "These
customized circuits, called "macro cell arrays," allow us to pack
more computing power into less space. By comÂ
pressing the logic into a smaller area, we have
been able to increase the basic speed of the processor, commonly
known as the cycle time, by a factor of 2.5 times that of the
VAX-11/780," explained Bob. "This means improved performance and
enhanced reliability for our customers."
Another factor which contributes to the
improvement in CPU speed on the 8600 is four-stage "pipeline"
processing. Pipeline processing, also found in other high
performance systems, overlaps the steps involved in executing each
processor instruction, thus reducing the number of cycles per
instrucÂtion executed.
Use of the latest 256K bit MOS memory chips
makes it possible to pack up to 32 million bytes of memory into
the main cabinet. As a result, for all of its added performance
and capacity, the VAX 8600 is very compact. It reÂquires only
slightly more electrical power and uses the exact same amount of
floor space as the VAX-11/780.
"As a standalone
system, the 8600 represents a major milestone in the growth of the
VAX family. And within a VAXcluster the 8600 offers truly
astonÂishing opportunities." And the 8600 can operate in a
VAXcluster configuraÂtion of up to 16 VAX-11/750, 11/780 or 11/785
processors and HSC50 intelliÂgent storage controller subsystems. A
cluster of about eight 8600s could provide greater performance
than IBM’s largest mainframe. "That's why we call it 'more than a
mainframe,'" concluded Bob.
Full systems will sell for from $576K to $970K,
and VAXcluster upgrade configurations for $450K.
To support the increasing strength, size and
capabilities of the European subsidiaries as well as the
successful decentralization of their work, all country managers
now report to Pier-Carlo Falotti, vice president of Field
Operations in Europe.
"This new phase of our organization will
further increase the speed and effectiveness of our communication
and the implementation of strategic programs," explains
Pier-Carlo. He plans to use quarterly meetings to discuss and
determine the actions needed to implement strategies. He expects
this to help ensure a synchronized and common understanding of the
direction of all of the European subsidiaries.
In addition, some changes have been made in
responsibilities. Specifically, Bruno D'Avanzo, country manager in
Italy, will return to Geneva as European Marketing manager, and
Pier Paolo Monduzzi will become the country manager in Italy.
Michel Ferreboeuff, European Marketing manager for the last two
years, will return to France as Sales and Marketing manager for
that counÂtry.
To help Pier-Carlo provide day-to-day
assistance as needed, share ideas and common needs, coach and
counsel;
Claude Sournac, in addition to being
country manager in France, will help support the country managers
of Spain, Portugal, SEENA and Israel.
David Barlow, in addition to being
country manager of Denmark, will help support country managers in
Norway, Sweden and Finland.
Don Frost, country manager in Holland,
will help support country managers in Belgium, Switzerland and
Austria.
Geoff Shingles will continue to manage
the United Kingdom, Ireland and the Middle East.
Willi Kister will continue to manage
Germany, and
Pier Paolo Monduzzi will manage Italy.
The General International Area (GIA)
Manufacturing and Engineering group, formed in October to
integrate the Manufacturing and and Engineering operations in that
geography, has been organized into two groups: Far East and
Western Hemisphere operations. Both groups report to Dick Yen,
vice president, GIA Manufacturing and Engineering.
Dick Yen is currently acting manager of Far
East Manufacturing and Engineering Operations, which is
responsible for Taiwan, Hong Kong, Singapore and the Japan vendor
management and purchasing office.
Western
Hemisphere Operations, managed by Ed McDonough, is responsible
for Kanata, Puerto Rico, and the GIA Business Center. Reporting
to Ed are Maurice Tavares, Kanata plant manager; James Bishop,
Puerto Rico general manager; and Bill Guilfoil, GIA Business
Center manager.
Ed will also
manage GIA Manufacturing and Engineering support, a domestic
unit responsible for supporting all GIA Manufacturing and
Engineering operations. Reporting to Ed in this group are Angelo
Farinelli, Computer Systems Manufacturing (CSM) Business; Earl
Ingalls, Micros and CSM Business; Bob Jones, Memories Business;
Joe Lombardo, Storage Systems Business; Jim Melvin, Technology;
Charlie Polay, Materials; Ed Shanley, Hybrids Business; and John
Sistaire, Low End Business.
Supporting the
GIA Manufacturing and Engineering group are Fran Barton, group
Finance & Administration manager, and George Borrero, group
Personnel manager. Both report to Dick Yen.
Steve Bourne has recently joined Digital as a
Senior Consulting Software engineer
reporting to Glen Johnson, manager of the UNIX Program Office. He
will manage a new group in Palo Alto, Calif., with specific
responsibility for developing software for a UNIX*-based graphics
workstation.
Steve
most recently worked for Silicon Graphics, Inc. and previously
worked for Bell Laboratories where he was a member of the group
that produced the seventh edition UNIX system. His contributions to the
system included the UNIX Command Language known as the "Bourne
Shell" and the debugging tool called ADB. He subsequently designed
an early RISC machine called the "Z Machine" and developed a set
of circuit design tools called UCDS is recognized as a standard
text. His 1983 book, "The UNIX System", is recognized as a
standard text.
UNIX* is a trademark of Bell Laboratories
Over the next couple months, supervisors in the
U.S. will be developing their salary plans for the April 1985 to
March 1986 time period. To
support this effort, a new Salary Planning Guidebook will be
distributed in January. It describes both the pay program's
objectives and the strategies for achieving those objectives. Any
supervisors who have questions after reading the guidebook should
consult their manager or their compensation or personnel
specialist.
Carol I. Burke has been named Personnel manager,
Marketing/Finance & Administration, reporting to the chief
financial officer and John Sims, vice president, Corporate
Personnel. She will also be a member of the Personnel management
Committee. Carol,
who joined Digital in 1977, has held several Personnel
management positions in Manufacturing, and most recently served
as Group Personnel manager, Systems and Clusters Engineering.
Dick Corley has been named Product Group manager
of the Medical Systems Group (MSG), reporting to Ed Kramer, vice
president, Technical Group. He will be responsible for all
marketing, engineering and other functions currently part of
MSG. Dick joined Digital as a Principal Marketing specialist in
MSG in 1980, and was named Product Line Marketing manager in
1983. He previously worked in sales and service management for
Baird Corporation.
Brian Deery has been named manager of Software
Service, Canada. Prior to this appointment, he managed Central
Canada District Software Services for ten years. Before joining
Digital in 1974, Brian was a nuclear physicist and held research
and teaching positions in the U.S., Europe and Canada.
Ralph Gillespie has joined the MASS Area Manufacturing
staff as manager of the Government Manufacturing Group, a
newly-formed unit responsible for planning and executing
complex, non-standard government projects for all areas in the
U.S. Ralph, who has been with Digital for eight years, and most
recently was manager of the Boston plant, will report to Abbott
Weiss, AMC Manufacturing manager, and Harvey Weiss, vice
president, Mid-Atlantic and Southern States Area.
Kevin Melia has been appointed
Manufacturing External Resource manager, reporting to Bill Hanson,
vice president, Manufacturing Operations. ReÂporting to Kevin are
Ray Michel, Distribution manager; Paul Mantos, MateÂrials manager;
Mike Ryan, Demand/Supply manager; and Frank After, Demand and
Supply manager. Pete Seuffert, manager, Inventory Purchasing, will
report to Kevin as well as to Ron Payne, manager, Corporate
Purchasing. Kevin has been with Digital, in various Manufacturing
positions, for 12 years.
In a related move, Dan Infante,
Manufacturing Controller, will assume additional responsibility
for Manufacturing Processes, which had been managed by Kevin
Melia, and the DIS organization in Manufacturing. Business Center
functions such as Management Information Systems, Finance, and
Personnel, which had previously reported to Kevin, will now be
handled by the Area Manufacturing managers. Dan has been with
Digital for 12 years.
John F. Mucci has been named Product
Group manager of the Laboratory Data Products group, reporting to
Ed Kramer, vice president, Technical Group. An employee for 14
years, John spent nine years in Marketing for LDP. For the last
five years, he has been with the Government Systems Group serving
as Product Line manager and most recently as Product Group
manager.
In a related move, Frank Posey has been
named manager of the Government Systems Group, reporting to Harvey
Weiss, vice president, Mid-Atlantic and Southern States. Frank has
been the Washington, D.C., District manager for the past three
years, and has held various sales and unit positions in the
Washington and Philadelphia districts. He has worked for Digital
for ten years.
Geoff Sackman has been named to the
newly created position of Corporate Standard Services Personnel
manager. He will report functionally to the Personnel Management
Committee and administratively to Ted Sares, Corporate Employee
Relations manager. Geoff, who has been with Digital for ten years
in various line and corporate Personnel management functions, will
be responsible for providing direction for and support to standard
Personnel services throughout the company.
Linda St.Clair has been named the
Manufacturing Personnel Programs manager, reporting to Bill
Hanson, vice president, Manufacturing Operations, and Dick
Farrahar, Personnel manager, Engineering and Manufacturing. Linda,
who has been with Digital for seven years, will be responsible for
providing PerÂsonnel focus to the Manufacturing Operations staff.
Digital is now the second largest supplier of
software products and services according to the 1984 report by
International Computers Inc. ICP
analyzes the top 200 U.S. suppliers of software products and
services to provide a statistical portrait of the industry in
terms of revenues, growth trends and related data. Information in
their report is compiled from Dun & Bradstreet, Standard &
Poor's and the annual reports of the top 200 U.S. suppliers
Digital was the only company actively supplying
products and services in every category ranked and was the largest
vendor to provide custom software programming. Digital's revenue
position moved from third to second place, passing Control Data
Corporation.
IBM was ranked as the largest supplier.
Although they are about eight times Digital's size, IBM's revenue
from software products and services is $2.81 billion; just double
Digital's $1.4 billion from software revenues.
Three Digital employees recently received the
Software System Award from the Association for Computing Machinery
(ACM). Butler Lampson, Senior Consulting engineer; Bob Taylor,
manager of the Systems Research Center, and Chuck Thacker, Senior
Consulting engineer, were recognized for conceiving and guiding
the development of the Altra system, which was developed at Xerox
and demonstrates that a distributed personal computer system can
provide a desirable and practical alternative to time-sharing.
The U.S. Congress has approved a continued
exemption from income taxes for reimbursements made to employees
for courses that Digital generally defined as Career Related or
Knowledge/Perspective Broadening.
The legislation, which ahs been signed by
President Reagan, reinstates, with some modifications, a law which
expired one year ago. The new exception covers the 1984 and 1985
tax years. While the subject reimbursements are not generally
taxable and will not generally be reported as income, the new
legislation provide a $5,000 cap per calendar year. Amounts over
this will be subject to tax and must be withheld and reported as
income on employee W-2 forms.