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Volume 4 Number 8__________________________________________________________ December 1985


One Advertising Message — 'Digital Has It Now’ By Henry Heisler, Manager, Corporate Advertising


What Does IBM’s Token Ring Announcement Mean To Digital? by Bill Strecker, vice president, Engineering Product Strategy and Architecture


Becoming Number One In The Eyes Of Our Customers by Win Hindle, vice president, Corporate Operations


Report Names Digital Most Comprehensive Software Supplier




Educational Services To Report To Don Busier


Taxation Of Education Reimbursement In Question


Digital Introduces New Salary Management System (Sms) For Supervisors


Digital Has It Now Is Theme Of DECWORLD '86

One Advertising Message — 'Digital Has It Now’ By Henry Heisler, Manager, Corporate Advertising


In the U.S., all advertising is going to use a common format with a common message.


In the past, many different groups ran their own separate campaigns. There was base product marketing advertising, service advertising, channels adver­tising and corporate advertising — all with their own separate messages.


Now we have "company advertising" serving the needs of many different groups — such as Applications Marketing, Industry Marketing, Channels Marketing, Services and Sales — with a common format and message.


The four words on the left side of each print ad read: "Digital has it now." Next to the word "it" appears artwork highlighting one aspect of Digital's offerings. The main text may highlight a particular product or leadership capability or be in the form of a testimonial from a customer. But in any case, the main text deals with business solutions and customer benefits rather than product specifications.


The repeated message "Digital has it now" responds to the claims of other computer manufacturers about what they will be able to do in computing and networking. What differentiates Digital is that we have been planning and developing the VAX family and our networking products for 10 years, and we already have what customers need to solve their business problems.


The campaign begins this December. The first testimonial ads highlight applications at Polaroid, Avon, Alcoa, the National Football League, Boston College and Bantam Books. Other ads are being prepared to highlight new products to be announced, and networking and service capabilities.


The copy won’t say, “Digital has given Polaroid Ethernet and wide area net­works." Rather it says, "Digital solved Polaroid's corporate-wide informa­tion needs." What did Digital do for Avon? "Digital gave us an office solution that allows all of Avon's computing systems to work together."


In the past, Digital has put about three-quarters of its print advertising budget into publications aimed at technical management and users, and the rest into business publications and newspapers aimed at middle and top


management. Now the company is reversing that emphasis, aiming the bulk of the advertising at middle and top management. We're not stopping the tech­nical advertising to the technical people, but we are definitely aiming higher on the organization chart. This campaign coincides with the new efforts that Sales is making to establish contacts higher in organizations and to sell total Digital capabilities. The advertising is intended to plow the ground and make it softer, so the job of sales people will be a bit easier and more productive.


Two agencies -- Schneider, Parker and Jakuc in Boston and Ketchum Advertis­ing in Pittsburgh — are working on this campaign.


What Does IBM’s Token Ring Announcement Mean To Digital? by Bill Strecker, vice president, Engineering Product Strategy and Architecture


Digital and IBM are the two main players in the networking arena. So any networking announcement by IBM is important to us.


On the positive side, IBM's token ring announcement is an endorsement of local area networking. It means that IBM has said that what we at Digital think is important is important to them too. And, since IBM is an influen­tial factor in the computing industry, when they say something is good, a lot of people suddenly get interested in it.


The negative for Digital is that some significant piece of the local area network business will go to IBM. So, it's difficult to say on balance whether the announcement was positive or negative for Digital.


Whereas IBM has very few products that work on local area networks right now, Digital has a very strong product set deliverable now. IBM's announce­ments are similar to what Digital was saying two to three years ago.


On the other hand, IBM announced their local area network at a significantly lower bandwidth than Ethernet — 4 Mbit vs. 10 Mbit. From that point of view, in terms of performance, I think it would be difficult to find any circumstance where a 10 Mbit Ethernet would not work a little bit or a lot better than a 4 Mbit token ring.


To some degree, IBM has done a disservice to its customers by introducing a different and lower-bandwidth technology in 1985. There is no particular reason why they should do so. They could just as well have used Ethernet — for which over 200 vendors already provide products.


The announcement indicated two major weaknesses of IBM:


o They didn't say anything about software supporting the local area network. They announced a component rather than a system.


o They only talked about how the token ring would connect their personal computers together. There was no mention ofhow they might tie to their departmental or mainframe machines.


In contrast, Digital's Ethernet products have always been an integral part of DECnet networks. That represents a difference in architecture capabili­ties. Ethernet fit right into DECnet. We didn't have to change the network architecture when we introduced Ethernet. We brought the advantages of local area networking within the context of the existing DECnet architecture.


It seems that the traditional form of IBM's network architecture, SNA (Systems Network Architecture) simply wasn’t suitable for local area net­working. SNA is based on a hierarchical scheme of large machines control­ling smaller machines and terminals -- a master and a bunch of slaves — whereas the problem of enabling large numbers of personal computers to communicate with one another is much better suited for the peer-to-peer approach which is the basis of Digital's networking architecture.


In general, IBM's product strategy is fragmented. They consider it per­fectly acceptable to introduce different kinds of networking into different product spaces and leave it up to the customer to figure out how they all work together.


People often ask if Digital will support IBM's token ring. We have no plans to do so at this time. On the other hand, Digital has a very strong stra­tegic commitment to provide a high level of connectivity to the IBM world. So if the token ring becomes an important element in the IBM world, we’ll develop the capabilities necessary to work with it.


We've defined the DECnet communication architecture to be media-independent. We could easily add another medium, such as IBM's token ring. Such an ef­fort would not significantly disrupt any investment that we've made in the existing DECnet and the existing media.


IBM is making announcements in local area networking because their customers want it. But they're making very preliminary, step-by-step announcements instead of announcing complete product capability, because they don't have a complete product capability. It's a delaying tactic. They want their customers to say, "IBM is coming along. Fine. We'll just wait a little bit longer till we see how it all turns out." They just want to to freeze the market or hold their customers' interest until they are in a position to become a dominant force in local area networking.


What is the difference between Ethernet and IBM's token ring? In a local area network, you have a communications channel shared by a number of different stations or nodes (computers), and you need some procedures (method of "arbitration") to decide which station can use the channel at any given time. There are various schemes for doing this.


In the token scheme, a "token" is handed from one station to another. If you have the token, you can use the channel. If you don't, you can't.


In the scheme used in Ethernet, if you want to use the channel, you deter­mine if anyone else is using it. If not, then you simply start trans­mitting. If it turns out that two stations decide to use it at the same time, you can get a "collision." Then you use a random algorithm to back


off and try again — an approach that makes it extremely improbable that a collision could occur again.


Some people, either deliberately or through misunderstanding, malign the arbitration scheme of Ethernet. They say, "Maybe this thing could get all locked up, and nobody could ever get through."


In practice, that problem never occurs. And one can support far higher levels of communication across a 10 Mbit Ethernet than across a 4 Mbit token ring.


As a human analogy, consider a meeting with a number of people sitting around a table. The Ethernet scheme reflects the way people normally manage meetings. If somebody's talking, you normally wait until that person’s finished talking, and then you start to talk. You can contrast that way of working with a classroom scheme where somebody at the top says, "It's your turn to talk."


This whole discussion around arbitration schemes is largely a ploy by vend­ors who don't have products, to focus on the most insignificant portion of local area networking. To the end user, the arbitration scheme doesn’t make that much difference.


It's like arguing to a user that the best car is based on a four-cylinder engine with fuel-injection or a six-cylinder engine with carburetion. The user just wants to drive to work.


If someone tries to sell you the virtues of his engine, and you find out that he doesn't have a car yet, and you have to wait for the car, you’d find that wasn't a very useful discussion.


That's basically what's happened in the local area network space. Many people want to talk about engines because they don't have any cars. Digital has a good engine and the cars, too.


Becoming Number One In The Eyes Of Our Customers by Win Hindle, vice president, Corporate Operations


Ten to fifteen years ago, Digital was organized into some 30 product lines, each managed like a separate business. That approach worked well at the time. The product line managers operated like entrepreneurs -- taking initiative and responsibility and creatively opening new markets. We grew rapidly. We changed the world.


Back then we were less concerned about the integration of our products. Computers were often used independently. And if our customers -- who were technically sophisticated -— needed products to work together, they could design that capability themselves.


Now our contribution to the computer industry is much different than it was then. Many companies today can do what we did before -- provide unique products to fill various niches and needs. But now we have a complete


integrated set of products, networks and services. We offer a range of compatible systems and communications capabilities that is unmatched. It has taken almost 10 years and enormous discipline to build this capability.


We now have the best product set and the best services in the industry. Our Field Service is rated number one. Software Services continues to grow faster than any other part of the company. Educational Services has grown to a size comparable to a 10,000-student university, with 500 courses in 18 languages.


Our task is now to take full advantage of these strengths and offer our cus­tomers total solutions — hardware, software and services — tailored and packaged to meet their needs.


So today, rather than autonomous product lines, each pursuing various market niches in its own way, we have different marketing groups that work together as teams to make sure that we provide integrated solutions for the important needs of major classes of customers.


Product (Applications) Marketing looks at our customers' needs horizontally -- in terms of job functions that many different kinds of companies have in common. These groups make sure we provide complete solutions and clear mes­sages tailored to meet the needs of Office, Manufacturing, Engineering, Science, Small Business and Management Information Systems (MIS) users.


Industry Marketing looks at our customers' needs vertically — in terms of the specific industries. The emphasis is on the needs of specific accounts. Here, an important part of the selling strategy is to show that we under­stand the business trends, competitive pressures and problems of these industries -- making sure that our marketing messages are written in lan­guage these people immediately relate to, and making certain that our products are packaged and configured to meet specific industry needs. To begin with, the industries we are focusing on include; Education, Medical, Telecommunications, Financial Services and Government.


As always, third parties — OEMs and distributors — are an essential part of our business. Our emphasis here will be to market to those OEMs that complement our end-user marketing strategies, so our efforts together with those of our OEMs fill all major customer needs. Channels Marketing ensures that we have programs, products and messages appropriate for these volume customers.


Area and country management teams are measured by orders, customer satis­faction, product mix, costs and revenues. Area and country marketing teams provide the support and programs to reach those targets.


We have to gain ground in our large accounts. That means meeting IBM head on, getting our message into corporate offices, letting them know that we can provide integrated solutions to solve their needs. Our systems solu­tions give us a significant advantage in terms of cost of ownership. But we have to communicate that message.


Our strategy is to introduce products that are competitive with the best available at the time of introduction. MicroVAX II is an example of the excellent products we have introduced in the last year and other excellent products will be introduced in the near future. We can sell what we have today with confidence in the strength of the next generation of products to come.


Growth has never been our objective — guality and customer satisfaction have been. Today, quality means more than well-designed and reliable products; it also means providing complete integrated solutions. And customer satisfaction requires careful attention to development schedules, on-time delivery and lowest possible costs.


We want to be number one in the eyes of our customers. The competitive environment demands that we meet this goal, and to succeed, every employee must be involved. For Sales this means working with customers as a business partner or consultant; helping to show them how our systems can solve their business problems.


In all our efforts, we must remember the importance of our people. To be an excellent company we need excellent people in all positions. We must hire the best for our unique environment, and further train and develop talent we already have. And one of the most important targets we have for managers is that they every manager should develop two qualified successors. That is a fundamental requirement for top-notch management.


We also must remember that financial strength is a measure of corporate excellence. Our corporate goal is a 16% return on assets. The investors, who provide us with the capital we need to grow, look very carefully at such numbers. We are not satisfied by our recent financial results. We must continue to contain our expenses, increasing our productivity by working more cleverly. This effort requires initiative from every individual, and we are counting on everyone to offer creative ideas on how to improve.


Altogether, we have made progress in making Digital easier to do business with. We are in the process of simplifying our business relationships and our discount structures. These efforts have a very high priority in light of our number one goal of satisfied customers.


We still have many challenges. We need better teamwork. Our integrated solutions strategy requires close coordination of Engineering, Manufactur­ing, Sales and all the Services. Our "Selling Services" program is a major step in that direction — presenting one face to customers. Also, guided by Channels Marketing, we have to re-emphasize the importance of our volume accounts in carrying out our complementary strategy.


But our strengths, in products and services and people, are great. And if we can get that message out — let customers know how we can solve their business problems today — our future is very bright indeed.


Report Names Digital Most Comprehensive Software Supplier


Digital has been named the most comprehensive supplier of software products and services in the industry for 1985 by the ICP Business Software Review.


The seventh annual ICP 200 report is primarily an independent analysis of the top 200 U.S. software product and service suppliers, as measured by fiscal year revenue derived from the sale of software and service. Its purpose is to provide an accurate statistical portrait of the industry in terms of revenues, growth trends and other data used to identify and track leading suppliers.


The information represented in the ICP 200 was compiled from annual reports, Dun & Bradstreet and Standard & Poors listings, and questionnaires completed by vendors. A list of 13 measurement categories varying from Application Software Supplier to OEM Distributor were used in the ranking.


Digital is listed as being the only company actively supplying products and services in every category ranked (IBM is active in just over half the categories). In the latest ICP 200, Digital replaced IBM as the industry’s leader in growth of software products and services.


U.S. Sales Operations Team Named


Harvey Weiss, vice president, has announced the members of his U.S. Sales Operations Team:


John Alexanderson, vice president, continues to lead the Peripherals and Supplies business, striving to maximze Digital's market share in the installed base.


John Buckley manages the U.S. Business Operations Group, with responsibili­ties including business policy and procedure, asset management programs and the Traditional Product Line (TPL).


Bill Gervais serves as Controller of U.S. Sales Operations, responsible for financial planning and analysis, internal control and decision support systems. He also reports to Tom Colatosti, manager, U.S. Area Finance and Administration.


Bob Gregorio serves as Personnel manager, providing consulting support to Sales Operations management on all human resource planning and development issues and coordinating the delivery of all day-to-day Personnel services. He also reports to Dick Walsh, manager, Field Personnel.


Mike Kalagher continues to manage Customer Administrative Services (CAS), striving to improve order cycle time and order management and to develop systems that free up sales time.


Bob Nealon manages End User Operations, providing business mnagement support to Sales and working with end-user marketing groups to implement their strategies and programs.


Frank Posey, manager of the Government Systems Group, continues to report to Harvey Weiss.


Mark Roberts and his group are responsible for doing business with COEMs, TOEMs, distributors and dealers. Their key mission for the coming year is to sign up competitors' major OEMs and Value-Added Resellers. In addition, Mark's new product consulting group will provide presentations and consult­ing to support complex sales strategies.


Bruce Ryan serves as manager of Product Operations, responsible for develop­ment of annual ship plans, managing the Field demand/supply process and managing the planning, proposal and implementation of corporate product announcements.


Abbott Weiss manages U.S. Manufacturing Operations, responsible for planning and assuring the delivery of all shipments to customers in the U.S. and forecasting on a worldwide basis. His group serves as a key link between Sales, U.S. Operations and Manufacturing. He also reports to Bill Hanson, vice president, Manufacturing Operations.




Earl Mason has joined Digital as Manufacturing Finance Controller, reporting to Bill Hanson, vice president, Manufacturing Operations, and George Cham­berlain, vice president, Manufacturing & Engineering Finance. He is respon­sible for all worldwide financial activities within Manufacturing. Earl comes to Digital from AT&T Information Systems, where he was Controller and, prior to that, Director of Finance Management. During 15 years at AT&T, he held various financial positions. He holds a B.S. in economics and an M.B.A. in finance from Fairleigh Dickinson University in Rutherford, N.J.


Jim Pitts has been named Field Operations Customer Satisfaction manager for the Corporate Quality Group, reporting to Frank McCabe, Corporate Quality manager. A Digital employee since 1964, Jim has held various positions, including engineering programmer, Senior Sales Representative, Sales Unit manager, Regional Sales Development manager, and most recently, Metro Boston District Sales manager.


Educational Services To Report To Don Busier


Pat Cataldo, manager of Corporate Educational Services, now reports to Don Busiek, vice president. The Ed Services organization will continue to operate and be managed as a separate business function, providing education and training to Digital customers and employees.


Don is now responsible for the Software Services (SWS), Computer Special Systems (CSS) and Educational Services organizations.


Taxation Of Education Reimbursement In Question


Education reimbursement payments made to employees for many external courses which currently are exempt from tax withholdings will become subject to withholdings beginning January 1, 1986, with the scheduled expiration of Internal Revenue Code Section 127 on December 31, 1985. Section 127 pres­ently allows up to $5,000 per year of educational assistance to be excluded from an employee's income. At this time, it does not appear that the law will be extended.


Some "career-related" courses and all "knowledge perspective broadening" courses will become subject to tax withholdings. Courses that are "job reguired" and some "career-related" courses" or those defined as necessary to meet "critical workforce needs" may not be affected.


During December, instructions and guidelines for interpreting and complying with IRS regulations will be sent to Personnel managers.


Digital Introduces New Salary Management System (Sms) For Supervisors


Digital is about to introduce a new computer-based system that will give salary managers a flexible, yet simple, way to plan salaries for employees reporting to them. This software, called the Salary Management System (SMS), will be available this year to about two-thirds of the supervisors who manage salaries . . . those with the equipment and other support needed to access SMS. The intent is to have all supervisors on SMS for salary planning in January of 1987.


Why is Digital offering SMS?


Digital is offering SMS because of its advantages to supervisors, Personnel and the corporation. On a company-wide basis, SMS:


o Saves significantly on the time it takes supervisors to do salary planning,


o Enables supervisors to do a better job of delivering salary based on performance, the foundation of Digital's compensation philosophy,


o Helps to ensure the accuracy of the data,


o Provides corporate-wide rollups and measurements, and


o Eliminates the expense of having many organizations developing their own salary planning systems.


What are the advantages to supervisors?


With SMS, supervisors will be able to:


o Know immediately through reports how a potential salary plan affects their spend number, their frequency, participation and promotion rates, and pay equity. This is especially helpful to managers of several peo­ple who supervise others. If the supervisors have their salary plans done, supervisors or managers will be able to run reports immediately on SMS with a few keystrokes.


o Revise salary plans until the final salary plan date set by each organ­ization. By having this flexibility, supervisors can try different ap­proaches to salary planning and see how those approaches affect the measurements shown in the results. If the results aren't satisfactory, they can revise their salary plans.


o Have more control over the salary data of employees who report to them.


o Plan with current information on the employees reporting to them, since the SMS contains data from the Personnel Master File, which is updated regularly.


o Experience fewer errors in salary planning.


o Be able to check salary plans at any time on the screen, provided their site decides to keep SMS up year round. In May of 1986, supervisors on SMS will be notified that they can access reports covering actual spend­ing versus salary plan and other measurements, and information about how to do that.


What are supervisors' responsibilities in using SMS?


As in the past, supervisors' primary responsibility in using SMS is to gen­erate a salary plan that supports the corporation's pay philosophy and pays appropriately based on the performance of those employees who report to them. With SMS, it should be easier to do that.


In addition to the normal responsibility of ensuring salary plan confiden­tiality, supervisors will have to ensure that their individual SMS account is secure. There are security features built into the system, such as pass­word control to access data and a special feature that will automatically logoff the SMS system if it is left idle for a few minutes. Even with these features, supervisors should change their password frequently and never leave their terminal unattended.


How to learn more about SMS


Supervisors will be able to learn more about SMS in a number of ways. With­in some of the organizations, Personnel departments have begun to introduce SMS to prospective users by holding demonstrations and information sessions. The primary source of information for supervisors will probably be the Per­sonnel person who consults with them during salary planning. To support supervisors during this transition to SMS, Personnel people are being trained on how to use the system and how best to help supervisors to use the system.


During the salary planning kick-offs, supervisors will receive a Salary Management Guidebook and an SMS Users' Guide, which will be distributed locally. A copy of this article will also be included to ensure that all supervisors see it. From January to March 1986, while salary planning is being done, each organization will also have a hot-line to handle SMS questions.


Once salary planning is complete, supervisors using SMS will be asked to describe what worked well and what didn't with SMS. Understanding what did and did not work will help to ensure a smoother salary planning process during 1987.


What will be done for supervisors who are not on SMS this year?


The supervisors who are not on SMS this year will do salary planning just as they have in the past. Information about that will be communicated through the compensation focal point within each organization.


Digital Has It Now Is Theme Of DECWORLD '86


Digital will hold its second DECWORLD sales exposition for customers Febru­ary 24-28. With the theme "Digital Has it Now," the goal of DECWORLD '86 is to demonstrate Digital's range of integrated solutions across industries.


"We will demonstrate Digital's leadership and uniqueness in computing archi­tectures, networks, industry solutions and services, for the large multi­national corporation as well as the small business," says Bob Hughes, vice president, and sponsor of the event. "These capabilites enable us to help our customers' operations be more competitive and productive. We want to communicate this advantage at DECWORLD '86," he emphasizes. Bob has named Pete Zotto, product group manager, as event chairman.


DECWORLD '86 will be held at the Sheraton Boston and Copley Place, Boston. There will be two exhibits - a solutions center and a technology center. Approximately 60 seminars will be held in conjunction with the exposition.  privacy statement