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mgmt memo


Volume 9, #7____________________________________________________________ Part 2 - July; 1990


"MGMT MEMO" was written by Richard Seltzer in Corporate Employee Communication for the Office of the Presi­dent. It was written for Digital’s managers and supervisors to help them understand and communicate business information to their employees. You can reach Richard at

State of the Company Issue

This is part two of our coverage of the State of the Company Meeting, which was held on May 3, 1990 at Merrimack, N.H. The first part dealt with the first two hours of the program, which were broadcast live over the Digital Video Network (DVN) and addressed matters of general employee concern. This issue summarizes the rest of the program, which dealt with strategies and markets and the need of "providing one voice to all audiences."


State of the Company Issue


The Role Of Public Policy On Digital’s Global Business by Martin Hoffmann, Vice President and General Counsel


General Systems Business Group Provides Focus For Growing The ‘Small And Mid Size Business’ Market by Gary Eichhom, vice president, General Systems Business Group


Client/Server Computing by Bill Demmer, vice president, Mid-Range Systems Business


Databases by Hans Gyllstrom, Manager, Database Systems


Transaction Processing by Dennis Roberson, group manager, Transaction Processing Systems Group


Workstations by Don Gaubatz, group manager, Workstations


ULTRIX by Kurt Friedrich, group manager, Open Software Group


One Powerful Voice To Customers by Peter Zotto, manager, Product Communications


A Worldwide Educational Vision by Pat Cataldo, vice president, Educational Services


DECWORLD ’90 by Pat Zilvitis, chairman of DECWORLD ’90

The Role Of Public Policy On Digital’s Global Business by Martin Hoffmann, Vice President and General Counsel


The public policy of governments is becoming increasingly important to the success of Digital’s global business.


Public policy is simply what a people of a country want or do not want, as expressed through their central government. Public policies are expressed in laws or regulations, as well as official policies, settled practices, unwritten laws, and customs. Basically, public policy is an expression of self interest on the part of a people, a country, and its government.


The major world changes that we read about in the news — the collapse of the Berlin Wall and the shredding of the Iron Curtain — signal a new era of more varied and intense relationships between governments and companies throughout the world as trade rivalries and alliances replace national security rivalries and alliances.


The forces that are shaping and driving governments in Central and Eastern Europe are affecting almost every government throughout the world. The major change is the accel­erating expectations of citizens. They want an elected government that is "user friendly", that can anticipate their needs, provide them with services, and empower them as indi­viduals.


Second, most people around the world — not only those in the Western democracies — are joining the "consumer revolution". Citizens of the emerging nations want a Western, free-market quality of life. There are dramatic changes in how consumers view their needs and in how governments view those expectations. In turn, these developments drive changes in world business patterns and in the dynamics of the global market. These changes are magnified and accelerated by the rapidity of technological change, particularly in the information technology business.


All of these changes in dynamics will drive increasing and more widely varied interactions between governments and global companies, each of which must act in its own self interest. How Digital responds to government policies in the many countries where it does business will be critical to its success in market areas around the world.


The rate of change will continue to be remarkable. One should remember that both govern­ments and companies like Digital are striving to serve the same people, the citizen/con- sumer. As a practical matter, consumers and customers want an information technology company that is "user friendly", that can anticipate their needs, provide them with ap­propriate services, and thereby provide them with enhanced productivity and empowerment.


Digital’s new joint venture in Hungary provides a front row seat at the drama of these major global changes. The Hungarian venture gives a glimpse of a great variety of govern­ment policies that impact Digital’s business.


A number of public policies — both of the United States and of Hungary — were helpful to Digital. Both countries are seeking to promote the institution of free-market systems and the privatization of industry. The Hungarian organizations with which Digital formed its joint venture had both previously been government-owned institutions. The public policy of privatization of enterprise in Hungary drove these two organizations to seek alliances with companies in the West. Intellectual property laws and policies in Hungary were also uniquely suited to help Digital form the venture.


Meanwhile, the sudden opening of Central Europe spurred the U.S. and Western European governments to adopt policies encouraging the alignment of Hungary with the West in order to neutralize the influence of the Soviet Union over them. But these policies conflicted with policies of denial of the availability of strategic technologies to the Soviet Union. Policies of technology denial remain. Although controls have been loosened, compliance with export controls must continue to be an important responsibility of all Digital em­ployees. On the other hand, in order to assure that Digital could be as competitive as other companies in these new markets, the U.S. endorsed Digital’s request that the export control regulations be redrawn to eliminate specific discriminations in the regulations against the VAX-VMS technologies.


Similarly, U.S. export rules and regulations were far more strict than other Western countries in regulating connection with and service of the installed base in Communist countries. The large installed base of Digital-type computers in Hungary - including clones and diverted equipment - makes Hungary a particularly attractive market to Digi­tal. Here again, Digital has been forthright in asserting its own self-interest in ser­ving the installed base. This interest parallels the public policies of the United States which seek to assure the competitiveness of U.S. companies in foreign markets.


To adequately assess the public policy and self-interest of a given country, it is im­portant to note the variety of roles that a government may play. A government may be a regulator of business, a purchaser from a business, a partner, or a competitor to a busi­ness.


Governments are, first and foremost, regulators. They tax and control. However, it must be remembered that these taxes and regulations not only affect Digital, but affect Digi­tal’s customers in that country.


At the same time, the government establishes and controls and infrastructure that under­lies many of the markets that are important to Digital. With respect to telecommunica­tions, transportation and health care, for instance, the government is a customer of information technology companies. The government can be a key customer, serving as a "lighthouse account". In many countries, local customers may look at the product sel­ections their governments make and elect to follow them. Particularly, organizations that are required to remain consistent with the government’s infrastructure tend to follow the government’s technological lead. And, of course, the best argument as to why a given government should adopt a particular technology is the success of that technology in the hands of another government.


Government invariably, though to a greater or lesser extent, is a partner of business. This partnership may be based on aggressive policies and a close alliance between business and government, such as that seen in Japan. Other governments take less activist posi­tions. But there are several forms of closer partnership between global companies and individual governments.


Partnership with a national government to provide a service to the people of a country can be sensitive and potentially uncomfortable for the company when the people regard the success of the project as reflecting on the capability of the incumbent government. The exercise of political judgments based on company performance is a vigorous marketplace test. Digital should not shrink from such challenges, since it has capabilities to sat­isfy both governments and citizens with respect to information technology. The parallel between public policy and Digital’s self-interest in these situations is identical — to provide the best for the citizen/consumer.


In a number of countries, Digital will be required to comply with public policies dealing with "local content" and "local participation". These policies are designed to encourage greater company presence within the boundaries of the country, and usually center on manufacturing. Digital works with these public policies in an enlightened way, recogniz­ing that Digital assets for these purposes are necessarily limited. Digital has suggested that, where appropriate, manufacturing plants might become obsolete, whereas engineering or software facilities would make a more lasting impact on the infrastructure of the country. As a practical matter, Digital is in a superb position to help countries build their infrastructures in more lasting ways than manufacturing, since in the information technology industry manufacturing jobs are becoming fewer and fewer. In bringing our self-interest into parallel with that of the countries seeking local presence, Digital is in a position to better serve the citizens of the country.


While many public policies compete with Digital’s self-interest, there are many more areas, particularly in the emerging countries, where Digital’s contribution can be pro­found. Digital values, particularly in countries that are trying to adapt themselves to a free-market system, can provide excellent examples of the efficacy of openness, honesty, fair dealing and respect and empowerment for the individual. Digital will have a front row in helping these countries appreciate and capitalize on the dynamics of the free-mar­ket system, as well as assisting with the structuring of relationships between government and business in Western-style democracies.


The policies and roles of government are many. The relationships between global busi­nesses and governments that will flow from these different policies and roles will some­times be confusing. It will always be helpful to recall that governments and companies both seek to serve the same public — the citizen/consumer.


We can expect that Digital will have many and more varied relationships with governments throughout the 1990s and into the next century. Digital must also be prepared to deal with the complexities of "super governments", such as the EEC under which the European countries are unifying, or regional trade organizations that will emerge in Central and South America and the Pacific Rim.


The public sector is a dynamic and growing market, and understanding of public policies are a key to success there. Digital must continue to build on its unique strengths and be prepared to find ways to take advantage of new opportunities that will open in the global marketplace. Digital must capitalize on public policies of governments to help meet the needs of customers.


General Systems Business Group Provides Focus For Growing The ‘Small And Mid Size Business’ Market by Gary Eichhom, vice president, General Systems Business Group


The mission of the newly-formed General Systems Business Group is to maximize Digital’s share of the small and mid-size business market. For our purposes, ’small and mid-size businesses’ is defined as companies worldwide with between 50 and 1,000 employees. Last year these companies spent $30 billion globally on computer systems and services.


According to industry consultants, this is the fastest growing market in the computer industry because many of these companies haven’t adequately computerized.


We found several characteristics that applied to these customers. The most critical is that applications drive the computer purchases. Also, since in many cases the money these customers are spending is directly out of their own pocket, they are very concerned about competitively-priced computer systems.


Service and support are extremely critical. Many of these companies don’t have the in­house expertise to do the kind of maintenance or training that they need to maximize their use of their computers. To do this, they need quality service, support and staff training.


These customers primarily buy their technology from what we call "value-added resellers" or VARs. The VARs have the expertise in the customer’s industry and particular application need. Thus the VARs have the customer’s trust.


To deliver solutions to small and mid-sized companies, we will be working primarily with VARs. In order to work with the VARs, a focused and streamlined sales organization in each geography will be created. As part of the geography plan, the sales organization will work with the VARs, recruiting and managing the relationship. We will selectively recruit the VARs who will provide the highest quality complete solution for our customers.


Essentially, we see Digital’s strengths in three major areas today. First, we have a broad and mature portfolio of VAX/VMS applications for small business. We must continue to work ‘with our VARs to market these solutions aggressively to our customers.


Our second clear strength is our service. Worldwide, our Customer Services, worldwide, are known, and respected, and are a major asset to our company. This will become one of the key differentiators for us in this market.


The third strength is the respect that people have for Digital as a company. We found that many VARs are enthusiastic about working with us, and being part of the quality associated with Digital products and service.


We have developed a strategy based on our strengths and which targets areas where we can grow. To win we need to:


o Offer a broad line of price/competitive products for these customers


o Make available the right set of applications, and


o Provide comprehensive sales and services.


Because applications drive the business, we surveyed independent software vendors who focus on this market, and learned that for this market they are making major investments in three operating systems: MS-DOS,[*] OS/2* and Unix.*


Of the three, Unix is the only true multi-user operating system. It has rapidly become extremely popular in small business operations. Many of these Unix-based applications complement our VAX/VMS-based applications.


We decided to work with a company called Santa Cruz Operations or SCO, which has a Unix operating system, Unix V3.2. The driving factor in choosing this system was the over 3,500 small business applications available today on SCO Unix.


We already have a number of Complementary Solutions Organizations (CSOs) committed to providing Digital solutions with SCO/Unix to expand our efforts in this area. In addi­tion, to expand our base or resellers, we are inviting a large number of VARs to attend DECWORLD in Boston. Almost all of these VARs are new to Digital. We are also continuing to recruit VARs through our field organization.


In the sales and service area, training is a key component of our strategy. Since an understanding of SCO Unix and Intel-based systems is key, we have developed an extensive on-going training program.


Our first Intel 386 based multi-user systems running SCO Unix were recently announced. VARs, customer, analysts, and the press were enthusiastic about this first step in expand­ing our product and services focus in small and mid-size business. There are many more products, services, and marketing activities well under way.


It is important to point out that Digital’s progress in implementing this plan for small and mid-size business is based on the hard work of many groups working toward a common strategy. In particular, Jay Atlas and Bill Armitage from the US Sales organization; Diane Fraiman from Europe; DickYen, Taiwanengineering/manufacturing; Henry Ancona, BOIS; John Rose, PCSG; and Don Zereski, Customer Services, have all been key contributors to this effort.


Client/Server Computing by Bill Demmer, vice president, Mid-Range Systems Business


Client/server computing uses a combination of hardware and software, part of which resides on the client and part on the server. We normally think of the desktop device as the client; and, indeed, that is generally the case. But, with Digital’s style of computing, any computing system can end up as a client or a server. A server is a system dedicated to deliver one or more functions needed by a client. The client requests the work, and the server does it.


The Gartner group believes that client/server computing will be almost universal by the end of the decade. Today the market is measured in tens of billions of dollars; but by the mid-1990s, it will be measured in the hundreds of billions of dollars.


In timesharing, we developed systems that could provide various services to users who connected to those systems. The design often focused on maximizing the number of users the system could support. In the client/server model, the balance of computing shifts to the desktop. Here the focus is on maximizing the services provided to the client.


Over time, users began to realize that not all of the functions they wanted were immedi­ately available from their timesharing system. They wanted access to data lying elsewhere in a corporate data base or access to some computing resource that wasn’t directly attach­ed to their system. Digital, along with the industry, began to work on that problem.


In the 1980s, as leaders in peer-to-peer networking, Digital created a large, complex network of systems that would allow users to gain access to remotely located data or other computing resources. In many cases, we also provided network system management capabili­ties that were used in such applications as automatic routing of messages and mail.


Today we have advanced the state of the art of networking to the point where our customers have very complicated multi-vendor network environments. Each department in an enterprise might have a separate and different set of computing resources for its own use. In addi­tion, individuals in these departments have a variety of personal computers (PCs) which may be tied together in various local area networks (LANs). With client/server computing we want to take all the functionality that exists anywhere in that multiple vendor complex network structure and make it available to any user. And we want to do that in a way that feels no more complicated than timesharing.


Our goal in client/server computing is to overcome the complexities of being able to interact and communicate with various architectures and various vendors systems. We want to make it easy for the user to access the functions that he or she needs, wherever they may reside on the network. Terminals will still play a major role in this computing scene.


For example, say we have five different kinds of desktop clients and five database sys­tems, and we would like each to be able to query any one of those databases. In that case, it would take 25 different combinations of hardware and/or software to provide the interoperability necessary for that query to take place across any combination of those desktop clients and those database systems. If you add on top of that the total range of desktop client architectures that might exist, and the range of databases and also the range of computing resources that might exist somewhere in the enterprise (such as super­computers or special kinds of servers or backroom office applications), the number of combinations required to provide interoperability is very large. As you can see, every enterprise in the world is going to be different, and we are still far from being able to provide the level of integration we need to achieve full enterprise integration.


Digital deals with that complexity within the context of our Network Application Support (NAS) activities. Our NAS program consists of an architecture, a strategy and a list of services that can be performed to solve each and every combination that Digital wishes to solve as it approaches the integration of an enterprise.


Today, we see three major classes of server. The majority of servers in use now are PC LAN servers. These are generally limited to simple file or print services across a small number of homogeneous architecture desktops. These have been one of the driving forces behind client/server computing technology, but I believe they will not be the dominant factor later in this decade relative to the overall client/server computing picture.


Workgroup servers support multiple workstations or personal computers with a more sophis­ticated set of services than PC LANs. These include database servers, compute servers and other capabilities.


Another new and important class we refer to as "integration servers." In this fast-moving area, we are just beginning to see some of the server functionality that we expect will become commonplace later in the decade. These servers work with other departments and other server systems to bring the client the capabilities it needs.


In the PC LAN and workgroup space, Digital can probably support more multiple vendor clients than anyone else in the industry. We can support five major desktop architectures as clients, ranging from Apple Macintosh* to MS-DOS and OS/2, as well as VMS and Unix environments. We support these across a family of VMS servers that range from our low-end MicroVAX systems to our high-end products. We also support them with our RISC/Unix family of systems


We are in a unique position in terms of the breadth of client we support in the industry at the PC LAN or workgroup server level. But our users tell us they need more than this.


They need access to bigger databases and larger installations. Some want access to their company’s supercomputer, or need to get into the backroom application area and interoper­ate with an IBM system there.


Digital has developed all of these capabilities over the last decade. We have proven strengths in networking, multi-vendor gateways and other capabilities required to bring functionality directly to the client from a remote system in the enterprise. Today’s users are just beginning to get comfortable with their PC LAN environment, and are be­ginning to see these additional possibilities. They are looking to Digital for help.


A recent PC Week survey showed that the VAX 6000 system was number one in "ability to support distributed applications on PCs, ability to function as a server in a PC network and multi-vendor networking and application portability."


We are fast approaching the point where the majority of our VAX 3000 and 6000 systems are being used as servers. In fact, we’ll soon see some of our VAX 9000 systems being used as servers.


For example, consider how our base system platforms are being used as servers at Chemical Bank, the customer for which I am the executive partner. MicroVAX systems are supporting the PCs and teller terminals at each of the branch offices. Each of these MicroVAXs systems feeds a VAX 6000 application server that does the branch consolidation work, and each of these servers can, in turn, act as a client to several of IBM databases.


If you look at the Chemical Bank world, the IBM databases, which were built up over a long period of time, are broken down by the functions that they support, such as demand-deposit accounting or loans. If you, as an individual, go into one of the branches and want information about each element of your business with that bank, it is up to Digital’s systems to integrate the IBM-based data and serve the information back to the appropriate branch.


In other words, today we have many instances where our base system platforms can work as either client or server depending on the needs of the moment.


You can expect to see our server development activity going through a series of functional increases over time. You’ll see database servers, compute servers, application-oriented server systems and integration servers.


The first task, of course, is to identify any particular area where it might be useful for Digital to provide server functionality. We might then announce a product that can pro­vide those basic services. Then we continue to make improvements to simplify their use by the client and the end user.


In summary, the client/server style of computing has evolved from the timesharing style at which Digital excelled. With this sytle, the system is the network, and Digital’s stra­tegy in this area leads to full enterprise integration.


* Macintosh is a trademark of Apple Computer, Inc.


Databases by Hans Gyllstrom, Manager, Database Systems


Many of our large accounts today have "islands of information" — separate computers systems that have evolved in separate divisions over the last 10-20 years. It is very difficult to integrate information across these islands, with their different hardware, operating systems, database systems and proprietary applications. In cases where the database system happens to be the same, the data is represented differently and there are different kinds of data.


Three issues are important to the customer in major integration projects like this: cost, quality and timeliness. Since the customer does not have the technology today to do this integration, we have to use people power to do it for them. That increases the cost and also increases the chance of errors, which is a quality problem. Timeliness is also difficult.


The solution we offer is a "distributed database system." That seems to be a contradic­tion in terms — using a distributed approach to do integration. But the role of a dis­tributed database system is to provide a uniform interface on top of the existing data­bases and, hence, to serve as the integrator of information in the enterprise.


That uniform interface is used by applications and users in accessing data. The interface must be tailorable so it can be configured for the individual needs of applications and users.


In addition, in the 1990s, we expect to see "individualizable" software on workstations and personal computers. This interface has to accommodate that trend as well.


The distributed database system separates the data from the users and the applications. This means you could roll out one of the local databases and roll in a new one without disturbing the applications and the users.


To illustrate our distributed database solution, I’ve chosen a specific project at McDon­nell Douglas, which involves three kinds of integration. The first example involves commercial data, consisting of numbers and words, for which we use relational technology. The second step involves integrating documents, image, voice and audio with data. The technology required is an extended capability on top of relational which allows us to deal with multi-media data. The third scenario includes graphical data, referred to as "ob­jects," and provides object-oriented capabilities as part of the overall distributed data base system.


McDonnell Douglas must report cost-of-data information to the government about this par­ticular project. But the project is supported by three different divisions in three different locations, and each division has its own information systems that evolved over time. The division in California has a VAX-based system using a Supra* database from Cincom. The division in Missouri uses an IBM system with DB2.* And the division in Ariz­ona uses a hierarchical system, IMS, an older type of database system.


The hierarchical system is totally different in orientation from the other two, which are relational systems. But the relational systems are very different from one another, too, because of individual choices made by the database administrators, who restructured the data differently. The DB2 database system presents the cost information in two columns: previous year and this year. And the California system has it in one column.


Today, a lot of people are involved off-line, doing "scratch-work" editing to integrate that data and come up with the necessary reports. Obviously they need a system to allow them to enter a single query from a workstation — "show cost data by task for this pro­ject" -- and get an integrated answer back at that workstation, without worrying about all the complexities that underlie those queries.


In the future, when the query comes in from a workstation, the distributed database system will break it down into a form that each of the three local databases will understand. The data dictionary helps in this task. The data dictionary contains information on the structure of the local databases and lets the distributed database system know how to reformat the request.


In addition, the distributed database system needs to deal with local dialects of lan­guages that are used to talk to those database systems. When the distributed database system is successful in sending the queries, the data comes back in three different for­mats from the three different database systems. The distributed database system restruc­tures that data so it can be merged and then combines it. Next, it looks in the data dictionary to see how the client expects the result to be presented. Then, it sends the result to the client.


From the user’s perspective, sitting at a workstation, the screen shows a menu; and with a click of the mouse, the user selects "query." A table of projects appears, and the user selects the right project. Then, the result comes back on one table on one window.


We are currently working on projects to extend our ability to both read and write to the foreign databases with which we interoperate.


In step two, we add the complexity of dealing with images, pictures, voice, audio and text. As part of the major Department of Defense project known as "CALS," McDonnell Douglas and other large government contractors are required to report detailed logistics information. We are now prototyping for them an Rdb relational database that is intended to include that logistics database.


Today, McDonnell Douglas uses two other databases. An Oracle system on IBM equipment contains part and assembly information. Since that Oracle database system cannot store images, the images are stored in a flat file system, also on IBM equipment, with pointers from the Oracle database to the flat file system. An engineer working on this project has to access separate databases and put the information together if he or she wants to find out which parts lack maintenance data.


The solution to this problem once again involves working with the individual structures of separate databases and bringing the information back. But in addition, we need to provide and show the requested drawings. In this case, the distributed database system is respon­sible for making sure the image gets delivered from the server, from the database system to the client. Dealing with multiple servers of various types and various hardware plat­forms and multiple clients, we have to be very flexible in terms of being able to map from different stored image formats to what the client expects to receive. Once again the data dictionary is the key, providing information about the individual formats.


The user view should once again be simple. As before, the user chooses a query, and the results come back in a window — in this case, maintenance data. Perhaps the last item has no maintenance data. Then a drawing of the part is accessed through an icon on this window. With a couple click of the mouse, the drawing is displayed on the workstation. Now, we need certain capabilities to interact with that drawing. Therefore, the menu bar on top now includes a new choice called "image." This choice provides the capability to highlight part of the picture, to annotate it with a text, etc. The distributed database system is responsible for making sure the annotation is connected to the pictures.


By the way, today the vast majority of the data at large defense contractors like this one is in the form of paper. CALS requires that they move to electronic storage, intercon­nected over a computer network. There is a tremendous opportunity for us with our multi- media offerings to be the storer of this vast quantity of information.


The third scenario involves "object-oriented" data. McDonnell Douglas, like many other large corporations, today uses multiple computer-aided design (CAD) applications. Various departments have different proprietary CAD applications, many of which have embedded file systems to store the objects on which the engineer is working.


Say. for instance, two parts were designed on different CAD systems, and you need to make modifications on both and relate them to one another. You could move the one object from one CAD system to another, but then you have two copies of the same thing, and if you update in one place, you need to remember to update in the other place as well. That becomes a cost, timeliness and quality issue.


The solution is to include an "object manager," or an object database system as part of the distributed database system. This object manager needs to have a standard interface and also needs to store information in a "neutral format" - a format that would be agree­able to the various application vendors for their CAD applications. Vendors are working on standardizing such representations. We expect that in the next 12-18 a standard will be agreed upon that can be used to implement such an object manager.


As in the previous example, the distributed database system now provides the interface between the application and the object data manager. When it’s time to deliver an object to the application, using the data dictionary, the distributed database system maps that object into a format that the application will understand and can use.


In this case, the engineer using the system from a workstation would find a part, click the mouse on the icon that represents the object, and the part would appear in the CAD application, available for manipulation and modification. After modification is comple­ted, the part design would be updated in one place.


We are working on a number of development projects to simplify this kind of integration.


We call these kinds of solutions the "Information Network." No longer are database sys­tems passive "bins" in which you store bits. Rather, they are active participants in making the network operate at a higher level, in terms of understanding the information and being able to translate the various formats between servers and servers and between servers and clients.


Our "Information Network" is inherently distributed. And it has capabilities that the competition won’t be able to match for a long time to come.


*Supra is a trademark of Cincom Corp. DB2 is a trademark of International Business Ma­chines Corp.


Transaction Processing by Dennis Roberson, group manager, Transaction Processing Systems Group


Transaction processing is a $37 to 40 billion market this year, and it is growing at about 13-1/2% per year — more than half again the rate of the industry at large. By 1995, we see a $70 to 75 billion opportunity in this area. Our participation in this business arena has seen significant growth over the past year.


Our history in transaction processing started in July 1988 when we announced our dedica­tion to this market with our distributed transaction processing architecture, and related DECtp products. Since then we’ve made a great deal of progress from both the Product and the Field standpoints.


From a hardware standpoint, the addition of the high end VAX 9000 and fault-tolerant VAXft 3000 systems has given us access to virtually all of the transaction processing market­place. With the additions to our hierarchy of storage devices, we now have a full range of disk and tape products to give us the capacity, performance and price/performance that we need to satisfy our customer’s requirements.


We have also continued to enhance the transaction processing performance of our VAX 6000 and Micro VAX systems. In May 1988 the VAX 6200 family offered a maximum of 18.2 trans­action per second. By December 1989, we had reached 50 transactions per second, in the same box. That’s tremendous growth that gives us excellent penetration in the market­place. We have similar growth at the low end, where the next MicroVAX system will offer more than 20 transactions per second. So we’re moving very rapidly in the performance domain, which has helped us make radical improvements in price/performance as well.


Probably even more significant for us has been the growth in our ability to support our software and hardware in the field. Transaction processing is a relatively new arena for us, and we’ve had to put great investment into this area to give us the ability to reach


our customers, help them understand our offerings, help them design Digital solutions for their problems, and to provide for their service and support needs. We’ve invested in education with Digital University Summer Session last summer, the Digital Institute of Technology in the fall and Winter School in Europe in February. Our DECtp University gives an intensive 2-1/2 to 3 year curriculum to provide solid Transaction Processing expertise in the Field. We have established a design consultant activity in engineering, and a network of expertise centers including the new US Centers in Chicago, Atlanta, New York and Los Angeles. To complement our internal EIS efforts we have also established important Service Alliance relationships with Anderson Consulting, Computer Science Corp­oration, the Arthur D. Little Group, Deloit-Haskins and Price-Waterhouse, and informal project relations with many of the major Systems Integration providers worldwide. These steps have greatly improved our ability to reach our customers with the skills they need, where they need them.


At the same time we’ve added greatly to our software capabilities, enhancing the breadth, function and performance of our offerings, improving the design capability, the ability to handle forms, the interface to the customer and system management related issues.


We recently introduced a key software enhancement to VMS known as "DEC Distributed Trans­action Manager" (DECdtm). This VMS service manages the important "Two-Phase Commit" protocol for our data-integrity-conscious customers. Prior to having this service, there were two ways of dealing with the complicated problem of databases that are physically or logically distributed and/or databases that use different methods to manage data. For instance, the customer might want to update in a single action Rdb, DBMS and RMS databases at three geographically separated sites. The first method, the "cross-your-fingers" approach, was to do three separate transactions in sequence and hope that nothing happened in between to disrupt what you wanted to occur as a single closed transaction. The sec­ond, much more commonly used approach involved a great deal of investment in application code to prepare for this kind of update. This code would check after each to make sure it was done successfully and to prepare for the next piece of the update. That was the state of the art in this arena.


With our DECdtm offering (and complementary database and TP monitor products), the so­lution has become very simple. If you want to update multiple databases, you can do so with a single transaction. The DECdtm software manages the complexity of the database updates for you while ensuring consistency. This is a significant enhancement to our functional capability and an important selling feature for our customers. Many compli­cated tasks that couldn’t be done or required time consuming, complex solutions are now easily resolved by this capability.


Our DECdtm offering also enhances our ability to handle cluster-based transaction pro­cessing with near linear scaling. This feature coupled with the availability of the VAX 9000 means we can now handle even very large centralized computing requirements, in ad­dition to our heritage of leadership in distributed computing.


We use the client/server model as a basis for our distributable transaction processing architecture (DECdta). We can build a transaction processing system on a single computer with the DECtp software logically separating the client and server functionality or on a wide variety of frontend/backend configurations using the full range of our VAX product offerings. A person uses the client software to handle his or her forms management, and menu selection, while the back end handles the mainline application, and data management. In this model the monitor software coordinates (ACMS or DECintact) the actions that occur between the database and the workstations or terminals, and provides support under the application. More generally, it works in conjunction with the VMS operating system and our DECnet support to provide the infrastructure for the overall transaction system.


Using this architecture, we and our customers can design applications on a VAXstation system, do prototyping on a MicroVAX 3000 system, do field test on a VAX 6000 system (using a MicroVAX 3000 as a front end if that’s desirable), and then, if it’s a large enough application, deploy it on a VAX 9000 or 6000 cluster. With all of this we’d still have plenty of room or grow into a cluster of VAX 9000 systems or even a distributed cluster, which could provide capability for over 1000 transactions per second. Using our DECtp architecture, the application doesn’t change from the point of inception on the VAXstation system.


From a performance standpoint, this means that Digital can now offer systems for even the world’s largest transaction processing applications.


Finally, we offer leadership in the area of development productivity and the integration of the enterprise, or the ability to integrate a variety of different applications on a single system; or through our Network Applications Support (NAS), even on multi-vendor distributed systems using a variety of Desktop devices. Customers buy our systems for transaction processing based on the fact that they can develop applications more rapidly with us than on competitors’ systems. They use our systems because of the flexibility we offer not only in transaction processing, but in the ability to handle the full range of the customer’s application needs.


Our challenge for the coming fiscal year is to continue to expand and enhance all elements of our transaction processing program, from our hardware and software products, to educa­tion including the important DECworld and DECville forums, to marketing and applications procurement, to our Sales and Sales Support activities, to our Enterprise Integration Services, to our Customer Service. Together we can continue to rapidly expand our base of satisfied Transaction Processing customers.


Workstations by Don Gaubatz, group manager, Workstations


On April 3, we announced the DECstation 5000, Model 200, system. To understand the impact of this product, we need to look at the evolution of workstation specifications.


In the 1980s, central processor speed was the workstations’ primary measurement. Vendors quoted MIPS (millions of instructions per second) as if they were comparing hot rods. But for the 1990s, workstations must now have more than just processor MIPS. Vendors must offer well-balanced systems, with performance in integer as well as floating point, and graphics performance in 2-D vectors, 3-D vectors, and 3-D polygons. The balanced system should also offer main memory expansion without arbitrary limits.


We have to redefine the desktop power paradigm so it is meaningful for users in the 1990s. A system that excels only in floating-point performance and is deficient in the other areas is unbalanced. It’s like those early hot rods. They go fast in a straight line, but otherwise they are very limited. IBM has announced RISC systems that are like this — they do one thing fast.


The DECstation 5000 system is an open workstation for the 1990s. At 24 MIPS, it’s one of the fastest workstations in the world. We’ve designed it to be balanced, flexible and expandable. We offer it in four versions: from the simple low-cost system, up to a spectacular graphics machine that provides the best desktop, 3-D solids performance in the industry.


The DECstation 5000 system provides ten times more 3-D polygon performance than IBM’s comparable system. It offers four times more 3-D vector performance than IBM, 20% better integer performance, and four times greater memory. Compared to the SUN SPARC 1 or SPARC 330, the DECstation 5000 system is faster in every area. Next to Hewlett-Packard’s com­parable model, it is anywhere from two to eight times faster over a variety of graphics measurements. The central processor is twice as fast as Hewlett-Packard’s fastest work­station, at a lower price.


These numbers come from systems running a real application through the X-window’s inter­face. We measure the graphics performance of all workstations through open industry standard interfaces.


The DECstation 5000 system is more expandable than any desktop system from the competi­tion. This system offers up to a 120 megabytes of main memory. That’s more memory than users can get in a desktop system from SUN, Hewlett-Packard, or IBM. In fact, to get a 120 megabytes of memory in an IBM RISC system, you’d have to buy a big desk-side model, the 520, which starts at over $27,000, twice the price of the DECstation 5000 system.


Users can scale the graphics performance of the entry-level system up to the top system simply by changing graphics cards. The box doesn’t get any bigger. If the applications


demand it, you can turn the basic CX system into a high-end PXG turbo model, with color 3-D solids. You simply add an option card. With this board-level technology, the upgrade path for customers is simple. They decide on the combination of graphics and I/O they need, and plug in the cards. It is "user-upgradeable."


We also support the new VME bus. Twelve vendors have already indicated that they will offer VME peripherals for the DECstation 5000 system. In addition, we introduced the Turbo Channel, a scaleable, extremely fast bus that we opened to the industry at no charge. That’s a real commitment to open computing.


The DECstation 5000 system offers performance, superior graphics, expandability, flexi­bility, storage, and open buses. But, most important, in this era of "open computing," it’s a system built on hardware and software standards. Digital has been driving and supporting open systems since the first version of Unix was created on a PDP-7 system, nearly 24 years ago. The DECstation 5000, Model 200, system incorporates more hardware and software standards than any other workstation today.


"Open computing" and today’s workstation market


"Open" is a relatively recent term in the computer marketplace. Customers who demand "open systems" are simply challenging us to deliver value to an expanding set of stand­ards.


Today’s requirements list for open computing often includes central processor technology that is available as a commodity or is licensable from the manufacturer. It also includes Unix as the operating system. Sometimes this requirement can be satisfied by a POSIX-com- pliant proprietary system. The rest of the list includes standard languages, communica­tions, graphics, and hardware buses.


Keeping in mind these requirements, let’s take a brief look at the history of worksta­tions.


Apollo started in 1980, with the Motorola 68,000 microprocessor and Apollo’s proprietary operating and networking systems. Apollo was alone in the business for almost three years. They offered an alternative to traditional timesharing. Later, Apollo designed its own RISC architecture for their highest performance model, Apollo was acquired by Hewlett-Packard in April 1989.


Hewlett-Packard first offered workstations in 1982. They introduced their RISC technology in 1986, in the form of a workstation. Hewlett-Packard now offers both 68,000-based workstations and RISC-based workstations. When Hewlett-Packard bought Apollo, it signal­led that they were very serious about workstations.


IBM made an attempt to enter the traditional workstation market in 1984 with the IBM PC-RT. This product was simply not a success as a workstation, but IBM did manage to sell it as a multi-user UNIX system. Outside the traditional single-user workstation space, IBM has for many years delivered workstation-like features by means of graphics systems connected to mainframes. In February of 1990, IBM introduced the RS-6000 AIX Power Ser­ies. This family of products includes four workstations and five servers, and claims to offer leading integer and floating-point performance.


Silicon Graphics, Inc. (SGI) started business in 1983. They set their sights on the three-dimensional graphics market and, until late in the 1980s, stayed focused on the high end of the market. SGI has adopted the MIPS microprocessor and, in 1989, they introduced the personal IRIS, which is their least expensive product. They retain a focus on the high end with their recent announcement of the Power Vision series.


SUN Microsystems started in 1982. Their first products, based on the Motorola 68,000, originated as a Stanford University graduate student project. "SUN" stands for Stanford University Network. They used Unix from the start and stayed with the 68,000 family until November 1987, when they added the first SPARC product. They have now established signi­ficant applications momentum for their SPARC architecture. After a two-quarter setback at the end of 1989, SUN is now reporting strong growth and has returned to profitability.


Digital’s workstation history starts a few years later than that of our competitors. Early products were the VAXstation I, VAXstation II and VAXstation II-GBX systems. In May of 1987, we delivered the VAXstation 2000, our first on-the-desk, complete-in-one-box, VAX workstation. This product, with an entry price of about $5,000, became the industry’s biggest selling workstation model, a distinction it yielded only to the VAXstation 3100 system in 1989.


In January 1989, at DECtop University in Littleton, Mass. , we announced two new VAXstation families and the beginning of the RISC/ULTRIX DECstation family. The VAXstation 3100 was the best-selling single model workstation in 1989. The VAXstation 3520 and 3540 models brought true color, 3-D graphics to the product line for the first time at Digital. The DECstation 3100 system held absolute leadership for workstation performance and price performance for over a year. The DECstation 2100 was the second point on Digital’s RISC/ULTRIX workstation product line, with a little lower performance and a lot lower price. In November, 1989, we upgraded the VAXstation 3100 central processor.


The March, 1990 International Data Corporation (IDC) Workstations Report includes a chart of worldwide workstation shipments in 1989. SUN is number one with just over 36% market- share; Digital is number two with 26%; and Hewlett-Packard, after their acquisition of Apollo, is number three at just below 25% market share. These top three vendors total 87% of the marketplace. The report shows SGI at 2.5% marketshare and IBM 1.4%.


In other words, before the announcement of the DECstation 5000 system, Digital found itself solidly among the top three workstation vendors worldwide, even though we started late and weren’t critically focused on workstations until very late in the decade.


Meanwhile, our VAX/VMS workstations are getting better. We have aggressive plans for their base-platform and graphics performance. We also have a complete family of RISC/UNIX workstations that set the standard for balanced usable performance.


Basically, with DECstation 5000 system and other products that are coming, we’re second to no one in innovation, packaging, advanced design and expandability. These are the most advanced workstations in the market today.


If you take all of that, and add Digital’s worldwide support, you have a winning package.


ULTRIX by Kurt Friedrich, group manager, Open Software Group


I have two simple messages: we can’t wait for the things to settle down to get serious about the Unix industry, and we need to invest resources today to get ready for the next ten years.


The Unix industry, by its very nature, is a merger of everybody’s business in the same place at the same time. Conflict is the nature of this business. We have to learn to sell in this environment of change — it won’t settle down. And we need to invest in this area now, even though money is scarce, because over the next ten years our major growth opportunity will be in this space.


The industry is undergoing rapid and major change. The hardware cycles, which used to be three years, are now down to nine months. The RISC revolution means computing power or "MIPS" cost very little. Central processors, peripherals, and systems software - which were Digital’s strengths for years — are becoming commodities. We are in a new industry, with tremendous pressure on cost and margins.


When General Motors was shipping big Chevrolets and Pontiacs with wonderful big fins, Volkswagen entered the market, quickly followed by Japanese car makers. General Motors did not react in time. They saw they could make the next quarter’s numbers by shipping their current cars; so they didn’t make long-term, basic changes. Consequently instead of riding with that change and taking advantage of it, they lost position.


Today, in our industry, customers’ values and perceptions are changing. "Open" is good. Customers expect price wars and require application and user portability.


The word "open" is often used as a synonym for Unix. Buying decisions are almost always based on applications. Customers know what work they want done and what applications can do it. They are looking for hardware that will run those applications with good perfor­mance.


Entire market segments are shifting to Unix. There are market segments that a year ago used 100% proprietary software, and now have shifted completely to open systems.


We have to embrace this fundamental change in the industry or have it force us into change.


The competition is fierce. Hewlett-Packard’s and SUN’s strategies are based 100% on Unix and RISC. IBM has arrived in a big way. And most of the has-been companies and many of the future start-ups are now all based on Unix.


There’s still a lot of confusion about Unix and open systems. OSF, which we strongly support, is defining "open systems" as the name of the game, while AT&T continues to defend the word "Unix." They try to use the word "Unix" to define open systems rather than an open process. This is the crux of the current conflict, and we must use that when selling to customers. We need to ask customers if they want Unix from AT&T, which is, in effect, yet another proprietary system, or if they want to be part of the revolution that Unix started, which is the open process.


There is a common ground. Everybody’s Unix today supports both the Berkeley and the System V fundamentals. The IEEE POSIX definitions are supported on everybody’s Unix. But, regrettably, it will probably take two more years before we move past these current wars over the definition of "Unix" and get to the more useful parts of the business.


Digital is a company in change. The corporate strategy has been based on leadership proprietary systems. That’s still a huge business, but it’s not growing at the industry growth rate anymore. We need to grow other parts of the company.


We cannot walk away from situations when Unix open systems are required. The Unix segment of the industry is growing at 26% a year. We must capture our fair share of the Unix business.


With our Network Application Support (NAS) strategy, our strengths in VMS products should help our Unix strategy, and our Unix capabilities should help our VMS strategy.


Our biggest problem is that many customers still don’t believe we’re committed to Unix. Independent Software Vendors (ISVs) still put us third or fourth on their list of systems onto which to port their software. That hurts us. We’ve got to get the volume in order to move up on their list. Volume is what they care most about.


Our Unix operating system, ULTRIX, has a poor quality reputation, partly because of side issues: we lack key software products to round out the product, and we have a severe shortage of trained pre- and post-sales software support people.


To succeed in this environment, we’re going to focus software engineering resources on ULTRIX development. We’re going to improve the quality and build key differentiators. We’re going to move past the kernels and build the best system management, CASE, commer­cial and networking capabilities.


To get the applications, we need to gain "mindshare." We all need to act committed and talk committed to Unix. We have to offer and attend the best training in the industry. We must be viewed as serious and very good at this business.


At the same time, we have to make the Unix layered software we build available on every­body’s platform. Customers will not buy our spread sheets or our word processing if it only runs on our platforms. That means we have to sell our software on the competition’s platforms. Sometimes, this is going to make our business easier; but other times it will work against us. It’s a double-edged sword, but we can’t get away from it.


Unix is in our accounts today. Retreating from the technical world into the commercial world won’t work.


In a survey conducted last November and December, IDC polled 129 commercial accounts. They found:


o 84% were using Unix for commercial applications;


o 85% said Unix is their operating system of choice to unite decentralized data resour­ces; and


o 69% said Unix is their operating system of choice for mission critical applications.


Four years ago, we never would have believed you would get that kind of endorsement for Unix in the commercial space.


Unix is everywhere. Unix is not the way to make next quarter’s numbers, but it is our growth for the 1990s. We have to invest time, people and training today to lay the foun­dation for that growth.


One Powerful Voice To Customers by Peter Zotto, manager, Product Communications


To increase our Sales "win rate" we must communicate to our customers by delivering clear, consistent information and messages through a coordinated set of Education and Marketing programs. "One Voice" means responding to a common set of customer requirements with the same messages — no matter where in the world that customer is located.


With the ’Digital Has It Now’ campaign, we built market momentum by differentiating our­selves from our competitors and making our uniqueness an important purchasing criteria. And we communicated our uniqueness consistently to every customer, every day.


Our worldwide communications template revolves around customers and account plans. We move knowledge and information from its source to our customers and the Sales organization. A source can be Engineering, an Applications group, a third-party software house or a Ser­vices marketing group. The channel which connects the sources to our customers must be fast and must provide timely feedback.


With its focus on connecting Marketing directly to our accounts, the new Application Business unit structure will facilitate implementation of this high-speed channel.


But that’s not enough. We need a vehicle, an engine to drive information and transfer knowledge down this important highway. Digital's Communication and Education Functions is the engine. The engine is driven by Digital’s strategies, our investments and the way we communicate this information in a clear and compelling way. And it’s the introduction of each product and service which fuels our engine and delivers on Digital’s strategies.


Senior managers in Sales, Services, Engineering, Applications Marketing and Communica­tions, defined several major marketing campaigns as the way to organize the activities to communicate and promote our uniqueness and help the Sales force win increased sales.


On a foundation of applications solutions and under the Network Application Support (NAS) umbrella, each campaign will have an integrated plan for product introductions, education and training, advertising and sales promotion and public relations. With the leadership of Barry Nay in Europe, Bob Schmitt in GIA and Steve Thomas in the U.S., area and coun­try-level plans will be organized for these campaigns.


The campaigns and their corporate sponsors are:


o Services — Don Zereski and Russ Gullotti,


o Office — Henry Ancona,


o Production Systems — Bob Glorioso,


o UNIX/RISC - Dorn LaCava,


o Client-Server — Bill Demmer,


o Software Development — Bill Strecker, and


o Networks — Bill Johnson.

These are areas of investment where Digital has a unique advantage or where we need to focus major marketing activities.


Each corporate sponsor will guide the overall program and ensure its scope is company­wide. For example, Russ and Don have asked that we have one integrated campaign for all services so we communicate "One Service" message to our customers.


For the account manager to feel the full force of these marketing campaigns, their account plans should reflect how they will sell these strategies and products into their accounts. For example, a manufacturing account plan might target sales of production systems like MRP and Order Processing, or target sales for CASE in the Information Systems Department. The strategies to win in this manufacturing account will be positioned and promoted by all communications disciplines — Marketing Communications, Customer Education, Sales and Support training, and demonstrations.


Communications has become as important to Digital as our activities in Manufacturing and Engineering. It’s not enough for us to design and build the best products anymore. We must communicate we have products and services that help our customers. And we must communi­cate in a single, powerful and unified voice.


We believe these campaigns, pursued aggressively by the entire company, will bring momen­tum and excitement to Digital. And the momentum and excitement that we all will feel will be reflected by our customers in greater sales.


A Worldwide Educational Vision by Pat Cataldo, vice president, Educational Services


Educational Services has been evolving in several directions. Whereas in the past, we functioned as a discrete business unit, today we are a key component of the Enterprise Integration Services (EIS) organization under Russ Gullotti. This alignment ensures our focus on the overall success of Digital as a major solutions integrator. We provide the critical training element needed to win major projects.


Previously, our customer training organization was driven purely by bottom-line profits. Today, as an element of Appications and Industry Marketing under Peter Smith, we are implementing an education strategy that will ensure that customers and employees receive consistent messages from Digital.


In the past, we delivered education and training by audience, for example, to Sales and Sales Support, and relied on these groups to tell us the courses they needed. Now, each product, application and service business unit will assume the responsibility for identi­fying the training needs and course content for the education of both employees and cus­tomers.


We are repositioning our educational resources closer to the business units. For instance, we recently relocated 29 courseware developers to Littleton, Mass., to align them more closely with the Networks and Telecommunications organization.


Until recently, our primary customer focus was on tuition-based, end-user training; but we also delivered customer education at no charge in the form of Corporate Leader Forums, Business Fellowship Programs and Discovery Seminars. Now, we’re placing much greater emphasis on all phases of customer education.


Historically, the company has had many unconnected training organizations. Over the last six months, we’ve taken steps to achieve a higher level of collaboration and overall productivity among these training groups, through the Digital Training Consortium.


Our goals are:


o to help each business unit to expand and maintain the technical excellence and compe­tence needed to compete in the marketplace;


o to educate our customers so they understand, appreciate and use our technology and application solutions;


o to expand the knowledge base and encourage the personal development of our employees; and


o to extend our training to over 165,000 customers; and


o to operate as a profitable business unit.


Our educational vision is an extension of the company’s communication model. We will take corporate themes, messages and introductions and use them to influence our employees, customers, partners and the academic community. The result should be increased technical excellence and increased awareness of Digital and of our products and solutions. We will implement this approach through a series of activities and programs, targeted by audience, to produce a single, integrated, education plan for the company.


We’re positioning this extended educational vision for the company under the title of "Digital University." The model we are working on consists of three major schools: one for architectures and technology, one for industries and applications; and one for skills and management. Departments will be identified within each school, such as client/server and networks in the Architecture and Technology School, and manufacturing and financial services in the Industry and Applications School. These departments will develop content


to train all audiences, such as Sales, Sales Support and customers. Responsibilities for the ongoing operation of Digital University will be shared among the University staff, the business units and the target audiences.


The most significant example of this new model and partnership will be at DEC WORLD ’90. There we will show the integration of Digital’s messages, themes and introductions and how education and training is used to bring it all together.


DECWORLD ’90 by Pat Zilvitis, chairman of DECWORLD ’90


From UNIX/RISC workstations to fault-tolerant machines and hundreds of applications, DECWORLD ’90 is a demonstration of the value Digital brings to a customer’s business.


We will give customers the opportunity to learn by participation. They will choose a discovery center and flow from seminars to workshops to demonstrations. Our guests will listen, question, participate and, together with our sales people, explore solutions to business needs. We are all going to make discoveries.


The Manufacturing Discovery Center will feature 35 seminars and workshops addressing discrete and process manufacturing, laboratory and engineering applications. For example, in the workshops and demonstrations on concurrent engineering and computer-aided design (CAD), design teams will share data supporting a host of federal government logistic standards and using DECwrite software to combine scanned images with CAD graphics. We want customers to conclude that Digital’s style of concurrent engineering differentiates us from the competition and adds value because of improved development time and higher product quality.


DECBank is an example of our innovative solution to retail banking challenges. It is more than just branch automation. It is a platform that supports the teller, seller and cus­tomer service areas. DECBank integrates existing applications and allows retail banks to do the outbound marketing they need to do to compete effectively.


A major focus at DECWORLD ’90 is on information systems. That is the thread that knits together all of the applications, resources and services. It’s also part of the evolution of Digital reaching out to new customers. The information systems area will feature a command center, which will manage not only a multi-vendor network, but also a network of multi-vendor distributed data centers.


As a result of these experiences, customers will feel the strength of Digital. They’ll know we understand the multi-vendor environment. They’ll recognize that distributed systems are the best approach to their production requirements and that we have solutions from the desktop to the data-center mainframe. They’ll see that we’re committed to open systems, and that the systems integration capabilities to tie it all together are here today.


[*]MS-DOS is a trademark of Microsoft Corporation. OS/2 is a trademark of International Business Machines Corporation. Unix is a trademark of American Telephone and Telegraph Company.  privacy statement