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Volume 5 , Number 1______________________________________________________ January, 1986

 

State Of The Company Issue

 

THE STATE OF THE COMPANY MEETING held on December 5, 1985, emphasized Digi­tal’s ability to network computer products today, the evolving simplicity of selling these networks, and the organization and vital importance of market­ing at Digital.

 

After a summary of today's networking capabilities, Mahendra Patel described seven Standard Network Packages that had been designed to simplify the sales process. The audience of 550 then heard how the Standard Network Packages were used as part of the complete integrated solutions Digital offers to help our customers solve their business problems. The afternoon focused on how Digital has organized its marketing functions to better support sales and market penetration.

 

This issue of MGMT MEMO summaries the speeches made at the State of the Company Meeting. We start with Ken Olsen’s comments.

 

The Challenge Of Filling The World With Networking by Ken Olsen, President

 

The Customer Perspective by Peter Smith, vice president, Product Marketing

 

Digital's Networking Capabilities by Mahendra Patel, Technical Director, Distributed Systems

 

Networking In The Office by Henry Ancona, manager, Office and Information Systems

 

Networking In MIS Rose Ann Giordano by vice president, Large Systems Marketing

 

Networking In The Factory by Jim Dale, manager, Manufacturing Applications

 

Networking In Engineering by Bill Steul, manager, Engineering Systems

 

Networking In Science by John Mucci, manager, Laboratory Data Products & Artificial Intelligence Marketing

 

Networking Multiple Buildings And Sites by Bill Johnson, vice president, Networks & Communication

 

Product Marketing by Peter Smith, vice president, Product Marketing

 

Overview Of Industry Marketing by Bob Hughes, vice president, Industry Marketing

 

Channels Marketing by Jack MacKeen, vice president, Channels Marketing

 

An International Environment — Europe by Bruno d’Avanzo, vice president, Marketing, Europe

 

A New Customer Communication Strategy by Gary Eichhorn, manager, Product Marketing Programs

 

Ken Olsen Responds To Questions

The Challenge Of Filling The World With Networking by Ken Olsen, President

 

The company that fills the world with networking is the company that is going to be the survivor in the computer business.

 

Today, we have the products, and they work. The world needs networking. The challenge is to organize our products, our selling and our planning. In the last few years, we made big strides in getting the company to work together. Now, the challenge is to put together all of the pieces and fill the world with our kind of networking.

 

The goals we’ve laid out the last few years are starting to show results. We have, to a large degree, one message and one strategy. The results of our work show, to an amazing degree, that the whole corporation is working in the same direction. We've learned to use our resources and to work together to become powerful. It’s a most satisfying feeling.

 

Networking and our ability to market and sell it are key to our future suc­cess. We have, for a long time, spoken about our networking and what we can do for a customer's entire organization. We said the software was important and, when we had the opportunity, we talked about hardware. Now, finally, it seems that the outsiders, like the press, are beginning to understand that we have the software to network together all of the pieces.

 

We often talk glibly about the wonders of networking and all the things we can put together. But, the results of the way we talk often turn out to sound superficial because we skim over the details. We don't describe some­thing someone would buy. If you wanted to buy an automobile, you'd walk out if someone only used glowing statements about the wonders of driving, if they didn't tell you the simple things or tell you a price and give you a delivery date.

 

Also, because we’ve lived with the advantages of networking, there are things we take for granted and never tell anybody. I'll take somebody who is interested in networking through my office and never think to show them what we're doing because it's what we've been doing for years. But, there are things we should talk about. Some of them are complicated and they're not the sort of thing you expect the customer to buy immediately. But, if we'd document what we do have that's readily available, they'd fall in love with it.

 

The Customer Perspective by Peter Smith, vice president, Product Marketing

 

Customers are facing many problems related to the overall complexity of what and how they do their work, the pressures under which they must do it, and the specific problems related to how to best incorporate change and new technology into each of their operating areas. If they're in manufacturing, they're concerned with productivity — trying to get their product into the marketplace faster and at a lower cost. If they offer a service, they need to manage their assets skillfully and ensure that they're satisfying their customers with more convenience, quality and service.

 

Because different computer systems are effective for solving particular problems -- for meeting an individual task within a department -- and because they were acquired at different times and often from different vendors, chances are they weren't designed to work together. Often, the equipment from one vendor is not compatible with other equipment from the same vendor. These are some of the problems facing customers today.

 

Change doesn't come easily. Costly software conversions are often necessary to increase computing power. Sometimes a particular software package oper­ates only on a machine that's too small or too large for the desired task. And it's certainly not easy if one task cannot readily communicate with another task. Finally, it's clearly not easy if our customers have to live with the likelihood that today's solution will become obsolete tomorrow.

 

They need help. They need to protect their investments, incorporate change and take advantage of new technologies. They need to tie together those various automated tasks commonly referred to as "islands of automation" if they're going to achieve the productivity, service or quality gains that are necessary for them to maintain their competitiveness.

 

Digital's answer is complete integrated solutions. These are available today and expandable later. Our approach to complete integrated solutions is based on four important building blocks:

o the best networking — this means providing the most effective way of tying together those islands of automation while protecting the customers' investments,

o the best architecture -- this assures our customers that they can take advantage of new technologies by incorporating changes into what they are doing or maintaining family compatibility across an entire network, o the most applications (available from Digital, from Cooperative Market­ing Partners and from OEMs) — this includes a number of important integration packages which help any application take full advantage of the network

o the most expertise -- this means that Digital is in partnership with our customers because we understand their requirements. We have the ability to plan the network, and we have the appropriate computer systems, applications and services. To implement it all, we have the complete integrated solutions.

 

All of this equals a great degree of support for our networking, our prod­ucts, our application solutions and our services.

 

Today, we're taking the next step. We're introducing seven standard network packages. They form the platform to combine the strengths of those four building blocks. They simplify the selling and marketing of our complete integrated solutions.

 

Digital's Networking Capabilities by Mahendra Patel, Technical Director, Distributed Systems

 

I’m eager to speak to you today because I'm speaking from a position of strength -- Digital's great strength in terms of networking. Over the last three years, we have installed more than 3,500 Ethernet-based local area networks with over 35,000 computers connected to these networks.

 

By solving its own technical problems in getting PDP-lls, VAXs, DEClOs and 20s to talk to one another, Digital essentially solved years ago what other companies are just now coming to terms with. It's the same problem as trying to make equipment from different vendors talk to one another.

 

By incredible good fortune, or it may in fact have been some vision, the architecture that's the basic approach to the networking and computing that Digital developed to fit its own needs is exactly what customers now want.

 

Digital's approach to peer networking and distributed computing is an accurate reflection of the way people work together within this company. Networking has become an integral part of every one of our business and product areas.

 

At present we can support seven bridges in series between any two stations. So we can build local area networks which extend for 20 kilometers — far greater than anything you're likely to need in the near future.

 

The design of this product minimizes human intervention for management. You simply plug two Ethernet cables to it and plug in the power cable. The bridge will listen to the traffic on both sides, find out which addresses of stations belong to which side, form a table internally, and then forward the traffic to the appropriate side. No one has to to set up the tables for it.

 

Competitors' products currently on the market require an incredible amount of setup by humans to manage them. In fact, as soon as the configuration changes -- even moving a workstation or computer from one side to another -- somebody has to come back and alter those tables.

 

Another Digital product, the terminal server,connects computers and terminals. Typically, in the past, terminals were connected directly to computers. Through Ethernet, we can now offer a logical switch capability wehreby terminals connected to terminal servers will logically connect to any of the computers on Ethernet. This approach reduces by an order of magnitude the amount of wiring needed. It also provides greater functionality, allowing the person sitting at the terminal to decide dynamically which computer he or she wants to connect to. A terminal server that supports up to eight terminals is small enough to be located in an equipment room on the same floor as offices.

 

Another local network interconnect product, DELNI, concentrates worksta­tions. Up to eight workstations can be connected directly to the Ethernet through the local network. By use of the DELNI you can increase the number of workstations that can be connected to the Ethernet cable without running out of the number of drops.

 

A router permits interconnection of multiple sites, located far from one another. Typically the connection between the two routers would be through a leased line from a common carrier. Each router can support multiple lines to multiple site connections.

 

Ethernets implemented in different parts of an organization in different cities could be connected together using the router. Essentially that is our wide area network capability — the mechanism for bringing the total corpor­ate data sharing together. This is another product which has been specific­ally designed to minimize human intervention. IBM has a comparable product which requires an incredible amount of management effort to make sure that it will operate properly. In the IBM approach, static tables have to tell the router which traffic has to be directed to which location. When that configuration changes, in the IBM case, the router has to be reprogrammed to tell it which direction to take the traffic to.

 

In contrast, our router is adaptive — it will find the most appropriate route currently available between two cities. If it needs to go through multiple intermediate locations, it will do so without human intervention. The ease of network management with this approach makes it possible to successfully build and maintain large networks without large expenditures for the labor of network management.

 

Our X.25 gateway provides interconnection for those customers who want to use a packet-switching service for communication among multiple sites. Packet-switching services have been gaining some momentum over the last few years, particularly in Europe.

 

Another product, the SNA* gateway, can connect systems on a DECnet network with systems on an IBM* SNA network. A user on either network can access documents and applications on the other. In fact, Digital connects IBM to IBM better than IBM does. Somebody sitting at a Digital terminal can com­pletely access any document in an IBM machine, revise it, send it back, and then access it through an IBM terminal and not know the difference. No other vendor can provide that kind of integration today.

 

DECnet evolution

 

DECnet is 10 years old. It started as a means of interconnecting VAX, PDP-11 and DECsystem-10 and 20 computers. It supported VMS, RSX, RSTS, RT, Tops 10 and 20 operating systems -- an incredible array of different operating systems to be interconnected by one architecture. Since 1975, Digital has added ULTRIX and MS-DOS* to that list. Every operating system we support supports DECnet.

 

IBM today cannot support SNA on the IBM PC* with MS-DOS. Yet we have been able, without any significant problem, to support DECnet on the IBM PC with­in a fairly short period of time.

 

DECnet has also evolved to embrace Ethernet. That has made it more powerful than any corresponding network architecture by any other vendor, including IBM.

 

We've also embraced X.25 as part of DECnet, and we’re now about to embrace the Open Systems Interconnect (OSI) standards product from the International Standards Organization (ISO) as part of DECnet.

 

In other words, the DECnet architecture has been designed with flexibility, so it can evolve over time as changes in technology and standards occur.

 

Digital itself now has the largest private data network in the world, with several thousand CPUs connected. On an average day, individuals can reach 40,000 other users instantaneously.

 

In addition to DECnet, Ethernet can be ordered on any computer Digital cur­rently offers. Contrast that with the IBM token ring, which is supported only on IBM PCs.

 

In other words, our products are more competitive than anything else that's currently being offered. The reason is fairly simple. We have been making Ethernet products for three years, and we are at the second generation of those products, using the VLSI capability. So our products are more com­pact, more reliable and less expensive.

 

And we know that the corresponding IBM capability will not change for several years until the corresponding VLSI chips that go into those products have been redesigned. So we have an opportunity to exploit our strength that cannot be matched by any competitor.

 

Every implementation of DECnet that we make includes the ability to provide mail service among workstations and computers, file transfer capability between two computers, a virtual terminal capability whereby a terminal connected to one computer can log into another computer located somewhere else in the organization. Block access and record access facilities permit a portion of a file to be accessed remotely (without the need to copy over entire files). And DECnet offers program-to-program communication, which is only just being recognized by IBM as one of the capabilities required on the token ring.

 

How does DECnet compare in terms of architecture with IBM's SNA? The differ­ences between DECnet and SNA stem from the computing environments in which they were created. DECnet was designed from the outset in the early 1970s for distributed processing, to allow many autonomous computers to communi­cate and share resources. SNA derives from the traditional centralized and hierarchical IBM transaction processing environment. The user enters the data from the terminal into a CPU which processes the data. SNA is still primarily used in such contexts. That means SNA emphasizes interconnection of terminals to computers, not computers to computers.

 

Today, customers are demanding more networking capability from IBM. And we should be in a position of strength now to win those accounts.

 

DECnet has a peer-to-peer network protocol, in which all systems have equal network capabilities. This means access to open files on demand. And each system in the network has the software to exchange messages, transfer and receive files, and engage in program-to-program communication.

 

Our vision of distributed systems has evolved into connecting multiple sites and multiple styles of computing — as we do within Digital. Networking is now the central theme of almost all of Digital's products. It's a part of the Digital computing environment.

 

Standard Network Packages

 

Digital has now developed seven standard packages to make it easier to sell networks. You will be able to order any standard package with a single order number.

 

The first package addresses the needs of the work group using either ter­minals or personal computers. This package is a low speed interconnect wire (twisted pair wire) going from the desktop to the equipment room. And the equipment room contains from one to eight terminal servers, and a local network interconnect — all in the same closet.

 

The second package is for connecting to PCs and workstations through a 10 Mbits/sec. Ethernet thin wire cable. The thin wire cable will run between the offices and the equipment room. And within the equipment room there will be up to eight multiport repeaters and one local network interconnect. This setup will serve up to 64 offices.

 

Package three is for interconnecting between the work groups on the same floor, in other words interconnecting the equipment rooms on the same floor. It can handle up to 128 different closets.

 

Package four uses the fiber optic bridge. This would typically be used to interconnect between different buildings or between floors within a build­ing. It isolates the local traffic on each floor. And since the fiber optic cable is immune to electromagnetic noise, where the electromagnetic noise is a problem, for instance in buildings with elevators and heavy power equip­ment, this is the most appropriate solution.

 

Number five is a computer room package whereby several computers can be connected to the Ethernet cable by using the local network interconnect. It connects up to eight different computers to one another. It also isolates the traffic between those eight computers without propagating it to the Ethernet.

 

Number six permits inter-network connection between a Digital network and an SNA network or an IBM machine. With one order number, this package will cover all the software and hardware and cables needed for that interconnec­tion. This package would typically go either into a computer room or into a basement from which the leased lines would emanate to other buildings or to other sites.

 

The seventh package is a DECnet router or an X.25 gateway — both of which use essentially the same hardware. Either will connect to remote sites using a common carrier leased line between those sites. It’s also permis­sible sometimes to use the common carrier to interconnect two nearby build­ings, but we typically avoid doing that by installing our own fiber optic cable. So instead of paying the tariffs to the phone company, the customer pays the capital expenditure to Digital.

 

If we wanted to connect two buildings at one site together, it should be fairly easy to order one standard package and install it and know that it's going to work because we have already verified that that particular combin­ation works.

 

Typically, networking is fairly complex to engineer. But Engineering is responsible for masking that complexity from the Sales, Marketing, Service and customer environment. These packages provide the simplicity that Sales needs.

 

Digital's networking products have no peers at this point in time. Digital is the largest user of networks in the world, with the most experience. Networks are squarely at the heart of the technical expertise that has made Digital the company it is.

 

(Peter Smith introduced the next five speakers. "We've talked to you about the marketing strategy base behind our complete integrated solutions and Mahendra has pro­vided some technical detail. Now we want to show you how those seven standard network packages can lead to actual solutions for customers. Henry Ancona will talk about office, Rose Ann Giordano about MIS, Jim Dale about manu­facturing, Bill Steul about engineering and John Mucci about science and laboratory applications.")

 

Networking In The Office by Henry Ancona, manager, Office and Information Systems

 

Networking is the key to success in the office market. This fact relates to three trends in today's market. First, prices per user are dropping. Second, customers are looking at the IBM PC in a new and sometimes harsh light. And, third, our market is becoming increasingly high-touch, non­technical .

 

Prices per user are dropping at the rate of about 25% per year so we have to increase the number of users we sell to by 25% every year just to keep our revenues flat. And that’s not good enough. We have to address a whole new mass market and find easy ways to sell to them.

 

Meanwhile, users are discovering that standalone personal computers which aren't linked with the rest of the organization create rather than solve problems. PC users need to share documents, resources and mainframe data. This is why networking is critical to the office market. Networks can increase the number of system users and make PCs much more functional.

 

To sell networking in the office, we need to make it simple. We need to speak the language of this non-technical and very large mass market.

 

Digital networking is easy. All seven of the standard network packages play a role in office networking because people in offices must have total communications capabilities among departments, throughout the building, among buildings and with IBM mainframes.

 

But the three main packages for this market are:

o package one, which links terminals or low-speed PCs to MicroVAXs;

o package two, which links high-speed PCs to MicroVAXs; and

o package three, the floor environment package which links MicroVAXs to MicroVAXs.

 

What are the problems that people in offices need to solve? They write memos and reports — that’s word processing. They distribute these memos and reports — that's electronic mail. Sometimes they do budgeting or cost accounting — that's spreadsheet. All of these activities require data access capabilities. So through networking, we can help the individ­ual, work group, department, division or entire corporation to be more effective.

 

We have a product that’s easy to install and use. You take the module out of the box, wire it into the network, and you are ready to go to work. It

 

can expand from one user to tens of thousands of users with the addition of standard modular building blocks.

 

MicroVAX II is a modular building block which comes fully equipped with Ethernet and DECnet support. And for the office, MicroVAX ALL-IN-1 offers all the functionality of ALL-IN-1 in a compact under-the-desk package.

 

ALL-IN-1 is the most popular integrated office system in the market today. And we’ll soon be announcing a new version of the product which makes it even easier to offer customers networking capabilities. It comes complete with services and is easy to install. You don't need a systems manager to get it up and running. It's equipped with Ethernet support to simplify network configurations.

 

You can start with a MicroVAX ALL-IN-1 system and use package number one to link VT200s and low-speed PCs to it. Then you can add packages two and three to link to high-speed PCs and MicroVAXs. As you grow, you keep on adding. You can end up with a network that has tens of thousands of users.

 

In other words, our office networks consist of modular building blocks that are simple to sell, simple to order, simple to install, to use, to move, to expand. No other company is in a position to offer this kind of expand­ability and interconnectability.

 

Networking In MIS Rose Ann Giordano by vice president, Large Systems Marketing

 

Today we have an opportunity to win significant business in MIS applica­tions. The computer products and services that MIS directors buy account for about $50 billion a year. Digital has a small but rapidly growing share today in this marketplace; our goals are to become the leader in in­tegrated information systems, and to be recognized as the alternative to IBM for corporate-wide information systems. Our superior networking capa­bilities are a key strength for accomplishing these goals.

 

What are the major issues facing MIS directors today, i.e. what's keeping them awake at night? There is tremendous growth in end-user computing. Business professionals are demanding more capabilites and services from MIS departments. At the same time, the maintenance and need for more produc­tion systems continues to accelerate. With this double burden, MIS direct­ors have a great need for improved programmer productivity. Data must flow quickly and transparently throughout the organization. They have to merge their office automation and data processing systems. Their challenge is to help change voluminous amounts of data into useful information.

 

If you look at the mix of applications provided by MIS directors today, about 80% are production systems and 20% end-user systems. By 1990 that mix will shift to 50% production and 50% end-user. That shift in applications represents a big opportunity for Digital.

 

First, since the applications are new, no conversions are required. Second, the new end-user applications are interactive and on-line. They are the kind of applications that require the style of computing that Digital has been promoting for 28 years. Third, the viability of these end-user systems depends on data gathered from the production systems. The vehicle that makes this data available to the end-user systems is networking, and Digital has the best networking in the industry.

 

Digital has many solutions to satisfy the needs of IS. One example is the VAX Information Center, which is a complete Digital solution for helping IS directors satisfy the needs of their endusers. The VAX IC uses our standard hardware, software and services to provide a complete solution to a common MIS problem. The VAX Information Center allows the business professional access to corporate data in a manner that preserves the in­tegrity of the production data base. It allows access to internal as well as external data bases. It has tools for data analysis, query and report­ing. Now, our standard network packages are going to make it a lot easier to configure and order a VAX Information Center.

 

One good example of an MIS customer is the Mercedes Benz North American subsidiary, which runs all its administrative systems on VAX computers. They have different size VAXs distributed throughout North America, prim­arily running a parts distribution application. They have begun to install MicroVAXs in dealer locations to provide customer data for warranty and re­call. They’re also committed to wire their two subsidiary headquarters net­works with Ethernet. Theirs is a multi-vendor, worldwide application, be­cause they transmit parts replenishment information via satellite to their IBM data center in Stuttgart, West Germany.

 

In summary, our overall strategy for IS is to augment, not replace, IBM; to compete aggressively for the high-growth new applications, to compete se­lectively for production systems, and to gain leadership in networking and programmer productivity applications.

 

Networking In The Factory by Jim Dale, manager, Manufacturing Applications

 

Manufacturing productivity is one of the hottest issues for Digital's customers. Semiconductor customers in Boston, automotive customers in Europe, and aerospace customers in California all have this common need to increase manufacturing productivity.

 

They have four business goals: reduction of costs; reduction in time to market for new products; improvement in their services and delivery systems to their customers; and improvement in the quality of their products.

 

There are two ways to apply computers to help them meet these goals. To improve the quality, they will certainly use computers in machine auto­mation. To reduce costs and time to market and improve service and deliv­ery systems, they need free and easy flow of information for decision making within their manufacturing areas. In other words, they need to tie together the islands of automation and information within their companies.

 

Networks are key elements in accomplishing this integration -- networks that are simple to understand and to use.

 

There are three basic manufacturing areas: management, shop floor and distribution. In manufacturing management, most people use an MRP (Manu­facturing Resource Planning) system for plant capacity planning, scheduling products and maintaining bills of material. For this application, a com­pany would probably start with a couple of VAXs in a computer room -- one running an MRP system, and the other running an ALL-IN-1 system for general mail and for communicating the decisions made as a result of the MRP analy­sis. An Ethernet could link this area with people in capacity planning and material requirements departments. To let corporate offices know what's happening at the plant, they might add an SNA gateway to go directly to the corporate office. And they might add a bridge to the shop floor to let them know the results of the planning -- when and how many to build. Another bridge could go to the distribution area so the MRP system will know when something is shipped. Another bridge could extend to the engi­neering area to get updated bills of material.

 

In the shop floor area, where the products themselves are made, there’s a control room with a couple more VAXs running multiple applications, such as traceability, job costing, machine maintenance, quality management and shop floor control programs. To give shop floor personnel access to that infor­mation for better decision making, they could add a couple of terminal servers for the expediters, the quality control people and the shop floor people themselves. To that, they could add a MicroVAX II cell controller running a specific application, such as fault detection, and connected to various shop floor equipment such as programmable logic controllers or robotics controllers.

 

In the distribution area, a single VAX could be running a distribution management program to keep track of the inventory, produce requisitions, and plan for shipping and internal traffice. A couple of terminal servers here could give people in traffic and inventory control access to this information. They could add another MicroVAX II for inventory and provide a router out to remote warehouses, putting inventory information closer to the customer.

 

We can build these three systems and link them together using our standard network packages. A network like this would give a manufacturing company the free and easy flow of information for improved decision making between functions within a department, between departments, to remote warehouses and back to corporate.

 

Networking In Engineering by Bill Steul, manager, Engineering Systems

 

Digital has many systems in use today in engineering departments around the world. We've sold well over 15,000 VAXs to do engineering design and analysis. Many VAX engineering systems in use today are already networked. There are over 2,500 Ethernet networks in use in engineering today and 800 clusters.

 

A typical engineering network includes a large VAX or VAXcluster, terminals and terminal servers, MicroVAXs, VAXstations, printers and plotters con­nected by a DECnet Ethernet network. Often there is a gateway to an IBM or Cray machine. Applications typically include mechanical design, electron­ics design, analysis, software development, documentation, engineering data management, electronic mail, spreadsheets, and project and financial management.

 

Productivity is the overriding concern of engineering departments. How can they get their products from the idea stage to revenue-producing volume production in the shortest possible time? The company with the shortest product design and engineering cycle has a competitive advantage in any industry.

 

Digital's computing, data management and networking products provide the support that advanced engineering organizations need. With distributed computing systems, the functions of engineering can often be done in paral­lel rather than in sequence, speeding up the overall engineering process.

 

Typically, engineering departments have had computer rooms, to which design stations and terminals are attached over low-speed serial lines. The systems are often overloaded and unable to handle efficiently the number of users and the multiplicity of engineering and computing tasks demanded of them. To solve this problem, Digital could replace the processor with a larger one or add a cluster or could off-load the departmental system by distributing the computing to where the work is being done. Distributed MicroVAXs can provide the same VMS and ULTRIX computing environment and the same data and applications at the engineers' desks without losing access to the departmental system.

 

Let’s take a look at how a typical engineering department could use our seven standard networking packages to distribute computing power. Package number five could connect the VAXs in the computer room together. Packages six and seven could link this department to corporate IBM mainframes and to the company's wide area network. The floor package, number three, provides a local area network link to the low-speed package (number one) and the high-speed package (number two) distributed work group computing environ­ments. Where engineering groups are located on more than one floor, a building package, number four, can tie them together.

 

On a distributed software development system with Digital's networking utilities and high-bandwidth Ethernet, programs can be tested and downline loaded to users quickly and efficiently. They can be maintained easily. Revisions can be distributed across the network quickly and reliably.

 

Off-loading the technical documentation effort to a dedicated MicroVAX enables the technical writers to accomplish their work without impacting the design effort on the department system.

 

The network connection can also be used by the program management group. In other words, the program manager and staff can plan, schedule and con­trol engineering projects on a dedicated MicroVAX connected to the network and everyone on the network will have up-to-date project management information.

 

Application software like EDCS, our new engineering data control system, provides the ability to control and change an engineering drawing set. Our

VTX videotex software can provide the basis for an on-line standards library.

 

Engineering program managers can use ALL-IN-1 for departmental communica­tion, business plan documentation and financial planning. And wide area network links can enable purchasing, manufacturing, finance, sales and marketing to have access to engineering information and to work closely with engineering to improve the productivity of the whole organization.

 

These are a few examples of how Digital can provide highly productive, flexible computing environments for engineering. We have made the job of networking and sharing information easy. The beauty of these products is that they're available today and the network can grow smoothly as the needs of the engineering department and the corporation grow.

 

Networking In Science by John Mucci, manager, Laboratory Data Products & Artificial Intelligence Marketing

 

In the scientific and research business, customers have been networking for 14 years. Scientists and researchers take the need for networking for granted because the scientific method involves collaboration and the need to share data and resources.

 

Also, since scientific customers are innovators, they are often the first ones to purchase our latest products, field test them and then use them to develop innovative solutions to their problems. We've learned from their experience and learned how to take the best of what they do, commercialize it and create standard packages that we can sell in commercial markets.

 

For example, let’s look at the Central Scientific Industrial Research Or­ganizations in Australia. They started networking with Digital products way back in 1971, with five nodes in five sites. Over a period of five years they expanded to 47 nodes. Today they have more than 120 nodes and many thousands of users.

 

Another example is Brown University. They were designated by the U.S. De­partment of Energy to build a subsystem for one of the large accelerators near Chicago, a system to do data acquisition and analysis. They used our standard network packages to connect 50 MicroVAXs with lots of Ethernets to perform a sophisticated compute function that couldn't be done any other way.

 

The Lawrence Berkeley Labs was a field test site for the VAX 8650. They have an 8650 and all of Digital's standard network packages. Actually, they're so happy with their configuration that they now include the stan­dard network package concepts in their specifications.

 

In the area of "production science," the R&D operations in Fortune 500 companies and in government, where they're trying to get their data analy­sis and data reporting all integrated into one system, we have a strategy called "Integrated Lab Automation." We take the data from data acquisition

systems and data bases that have regulatory standards and reporting standards and communications and put that together into an applcation. Here, too, our new network packages are very helpful.

 

Basically, whether you're selling to the Einsteins of the world, the big science customers, or small commercial labs, Digital makes it easy to configure networks to meet the customers' scientific computing needs.

 

Networking Multiple Buildings And Sites by Bill Johnson, vice president, Networks & Communication

 

The seven standard network packages and the complete integrated solutions are intended to make objective and predictable the kind of sales that have been problematic up until now. With these packages, Digital can take care of about 80% of the sales that have to be made, without a lot of extra technical training.

 

For local area networks inside a building, the typical customer looks primarily at the cost of the equipment — which is a capital expense. But that changes as they consider wide area networks. Common carriers levy communications tariffs based mainly on the volume of traffic, and the customer has the problem of managing this cost.

 

With Digital's wide area networks, the customer has the ability to adjust to the current tariff structure without affecting current applications. This capability is based on the fundamental elegance of our network systems that no one else can even talk about. Because of our network architecture, applications investments can remain independent of the communications technology which is underneath.

 

For instance, let's suppose a customer who is using an X.25 gateway, which is highly cost-effective for file transfer, wants to add an electronic mail application. Then leased lines would be the better choice because the increased volume would mean a lower tariff structure. Digital offers the capability to change from the X.25 gateway to leased lines without changing the applications code. In other words, we offer a dramatically more flex­ible system enabling the customer to make cost-saving choices and changes.

 

Telecommunications managers are particularly concerned about tariff cost. Their job is to determine the most cost-effective means of running their network. They have to perform a cost/benefit analysis based on the pro­jected volume of the applications they need to run. But, typically, they presume the design of a network is a function of the application that’s running. They think that if you add a new application, everything changes. We have to explain to them that that is not true with Digital, that our networking software is independent of the medium that's being used for the transmission.

 

With IBM's SNA network, there's a paralyzing halt for new network genera­tions. IBM is very limited in terms of their function and the ability to change easily. Their remote terminal entry or terminal emulation is a much more complex scheme than our simple approach. They make telecommunications a customer problem. So all you need to do to convince a telecommunications manager to go with a DECnet-based network is ask how hard it is to change with IBM's SNA network and then show how easy it is to change with Digital.

 

We have solutions for everyone within a building and for multiple buildings — local or global. We can extend that same distributed computing environ­ment regardless of the location. In summary, we offer one highly flexible network on which you can run all your applications.

 

We have the most powerful capability in the industry. We have leadership products, services, and now complete integrated solutions built on system network packages which are easy to understand and to order.

 

Product Marketing by Peter Smith, vice president, Product Marketing

 

This morning we talked about customers, about their environment and their need to accommodate change, and about our complete integrated network solu­tions. Now we want to show you how we in marketing are organizing to help you capitalize on these opportunities.

 

The job of Marketing is:

o to provide complete, highly integrated solutions that meet worldwide customer requirements;

o to focus those solutions on real customer needs;

o to market all of the company's product solutions through appropriate direct and indirect channels; and

o to adapt those solutions to local geography requirements.

 

Each of these components needs to build on the others and reinforce the others.

 

To assure that we are building the complete solutions that customers need, we have strengthened the alignment between product development and applica­tions marketing, establishing a "Product Marketing" organization.

 

Secondly, we decided to enlarge, enhance, and strengthen our industry mar­keting focus -- to posture our complete solutions from an industry point of view and further strengthen marketing support for the Field. That's managed in part by Bob Hughes, Jerry Witmore and Harvey Weiss, reporting to Jack Shields.

 

Thirdly, to simplify and streamline our channels way of doing business, we have focused a channels marketing group on reinforcing and helping to imple­ment the strategic partnerships of both product marketing and industry marketing. That’s managed by Jack MacKeen.

 

As we do this, we want to continue to strengthen our geography and local marketing so they can take advantage of these corporate marketing functions. And we want to make sure that our traditional lines of field support stay intact as we evolve this product, industry and channels marketing approach.

 

I stress the word "evolve" because we've been at this for over nine months. Bob, Jack, Harvey, Jerry and I have focused on the details of how to support

the Field, how to work with Engineering, how to acquire applications, how to run trade shows and so forth.

 

Product, Industry and Channels Marketing are like three legs of the same stool -- reinforcing one another. Today, I'll describe Product Marketing, Bob will talk about Industry and Jack about Channels. Then Bruno D’Avanzo will talk about geography and, in particular, European marketing.

 

Product Marketing is really our nickname. Our formal name is "Complete Integrated Product Application Solutions Worldwide Marketing."

 

"Complete integrated" means that we care that all the pieces are there — the hardware, software, applications, networking and services. And we care that the programs and the support are there to help sell those capabilities.

 

"Product applications" means we don't just take the application and put it on top of a base product like frosting on a cake. Rather, the application is a key ingredient in the total solution. We build the base product to perform a set of applications. Those applications may come from Digital or they may come from a Cooperative Marketing Partner or from an OEM. But we design the product, package it, price it and then introduce it from the standpoint of how it solves an application problem.

 

"Solutions" means it does something for a customer. In other words, we have to work closely with industry marketing to understand customer needs. And we have to have a very tight conduit between ourselves and the Application Centers for Technology to understand how our solutions are being used and implemented by customers.

 

"Worldwide marketing" means we care that the complete products meet worldwide customer requirements. It also means we care about the marketing programs, support tools and programs that are available to help sell these complete solutions in the Field.

 

For example, packaged ALL-IN-1 systems which have been tested, tuned to and properly configured for MicroVAX II are complete integrated product applica­tion solutions for which you can expect worldwide marketing support in the form of comprehensive sales tools and support through our image advertising and through worldwide Office Solution Centers. The OIS group, along with all the other groups, are supporting and feeding these solution centers as our main conduit to demonstrate complete application solutions.

 

You heard from five application areas this morning -- Science, Office, Engineering, Manufacturing and MIS. The sixth major component of our product marketing focus is Small Business, which because of its unique distribution and sales focus requirements is in Jack Shields' organization.

 

All of these groups are building their complete integrated solutions around the building blocks we talked about this morning — our advantage in net­working, the consistency of the VAX VMS architecture, world-class appli­cations and product applications expertise.

 

Overview Of Industry Marketing by Bob Hughes, vice president, Industry Marketing

 

Industry Marketing starts with a few assumptions:

o The market for Digital products is totally elastic.

o We don't know our customers well enough to capitalize on the opportunities facing us, but we know pieces of them. We know the CAM piece, the office piece, and the lab piece; but we don't know our customers as total entities.

o It makes sense to focus some of our marketing on the total customer com­puting environment.

 

Industry Marketing is additive. It's an enhancement to the marketing that we continue to do around products, applications and channels. Jerry Wit- more, Harvey Weiss and I manage U.S. Industry Marketing. Our primary focus is in support of U.S. Sales. When asked for help from GIA and Europe, we'll give it. When U.S. international accounts require coordination across boundaries in a marketing sense, we'll give it. But our priority is U.S.

 

Basically, we are organizing parts of our marketing around certain classes of customers to learn their language. We want to package products by industry and promote them by industry. We want to put industry-oriented support teams, applications support, sales support and management tracking into the Field. We want to train the sales force by industry.

 

To the extent that we can train people on what drives American business, what issues keep our customers awake at night, we will be more successful.

 

We also want to influence Engineering. For example, with some relatively minor changes, could we turn our electronic mail product into an electronic funds transfer product? Could we turn our ALL-IN-1 system for Sales and Marketing into a loan officer's workstation or a telecommunications manag­er's workstation, thereby opening new opportunities?

 

Our objective is to sell more of what we have to more people. Obviously, we are concerned about doing things that increase the company's profit­ability, but we would like to drive market share as a corporate goal.

 

We believe that industry marketing is the only marketing function that sees all of the products and all of the marketing across the company and has a total-customer view of the world.

 

We need to better know our customers. In the U.S. Digital has 34,000 accounts. Of those accounts, 3,400 gave us 90% of our business last year. 460 of those were Fortune 1000 accounts.

 

There are 5,411,000 companies in the U.S. — partnerships up to large corporations. Eleven thousand of those companies represent 80% of all U.S. computer purchases and 80% of all U.S. employees. The focus of U.S. industry marketing is those 11,000 companies.

 

We categorized those 11,000 companies into 62 industry segments. And then we arranged those 62 into 12 industry groups and split those into Service Industries, Basic Industries and Government Industries for management purposes.

 

Service Industries include airlines, banks, broadcast companies, insurance companies, printing and publishing, data services, trucking and shipping companies, utilities, churches, newspapers, law firms, consultants, enter­tainment industries, wholesale and retail distribution, and transportation services. We are going to track our performance around all 29 industries in that category, and for the next year we are going to "focus" on four or five of them.

 

"Focus" means there will be at least five people with expertise on applica­tions in that industry putting together analysis, marketing programs, and support programs for that industry. We'll start with banks, telecommunica­tions companies and newspapers. We'll also put some effort into insurance, data services and airlines.

 

Basic Industries includes all the companies you've known and loved over the years. There are 32 industries in this group. We will track our perform­ance in all 32 and will focus on four or five, such as aerospace, automo­tive, electronics, petrochemicals, education, and medical. And we will begin to develop business plans for some of the other promising opportunities.

 

In Government, we will track four industries and focus on four.

 

About 50 percent of all computers and services installed in the U.S. last year were in what we’re calling Service Industries. Over 40 percent was in Basic Industries. The rest was in Government.

 

Service Industries are growing faster than Basic Industries in terms of their acguisition of computers and software. But in Digital only 31 per­cent of our sales go to Service Industries and 53 percent go to Basic Industries, with the balance going to Government. In other words, in Basic Industries we're growing faster than the market, so we're taking market share away from the competition. But we're losing market share in the fastest growing industries -- the Service Industries.

 

The top revenue-producing industries for Digital are:

o Federal Government, where we've had an industry marketing focus for several years;

o Telecommunications, where we've had an industry marketing focus for the last year and a half;

o Aerospace, some of which is a by-product of our government business;

o Education, where we've had an industry focus for a year and a half; and o Data Services, primarily because we've treated those customers as OEMs.

 

At the bottom of the list of Digital's revenue rankings in FY85 comes air­lines. We did just $7 million of business in airlines last year. As a company, we spent over $60 million on airline tickets. IBM got $1.2 bil­lion of revenue out of that industry.

 

Two up from the bottom of the list is food, beverage and tobacco. that happens to be the second-largest industry in the world. We did $28 million there. The largest supplier of food in the Greater Maynard complex re­ceived over $42 million from Digital last year.

 

You begin to get the feeling that there's a lot of potential out there. We just have to unleash ourselves and start thinking a bit differently to take advantage of these vast opportunities.

 

Channels Marketing by Jack MacKeen, vice president, Channels Marketing

 

We believe that the total worldwide market for every aspect of the computer business -- hardware, software, services, solutions, the after-market, com­munications, networking — might approach $600 billion in 1990. To deal with an opportunity of that magnitude, we have to leverage all the appropri­ate channels in a disciplined manner so that we truly support the company's total push for growth in the computer industry.

 

In the past couple years, significant changes have taken place in the market. The advent of powerful technology available at very low cost is causing both the vendors and the third parties to redefine value-added relationships, to re-think how third parties should be used and managed.

 

Base technology is now assuming many of the capabilities previously done by third parties. With overall costs rising, end users are seeking solutions from computer vendors in addition to or in place of the tools that have traditionally been provided.

 

Digital's response to these realities is the continuation of an evolution that began several years ago. It began with the expanded roles of subsidi­aries in Europe. It was followed by the movement of operational responsi­bilities in the U.S. from the product groups into Management Centers. And we continue it now by integrating our indirect marketing activities into the total corporate strategy.

 

The Channels Marketing role becomes one of mapping and leveraging our chan­nel partners and their skills and applications into our corporate strategies so they are complementary to our direct marketing thrusts. Today third parties are the source for more than half the applications needed by custom­ers in the specific industries we're focusing on. We think of these people as strategic partners.

 

In addition, we work with a variety of marketing partners -- primarily OEMs -- to insure penetration across diverse markets where Digital has no direct market focus and may never wish to focus. These represent the classic mar­keting partners which, in a number of cases, we have known for many years — typically, equipment OEMs such as GenRad, Teradyne, Cincinnati Milacron, Fluke, etc.

 

Our "all-channels strategy" simply recognizes that no company can afford to be all things to all people. It also builds on the fact that high volume leads to economies of scale, and the fact that channels have historically been an important strength for Digital.

 

In addition, an all-channels view of our business helps bring our marketing and sales efforts into strategic alignment.

 

We have an account base of well over 3,000 OEMs and channel partners that provide to the marketplace in excess of 6,000 application solutions.

 

There are about 550 Digital sales people calling on our OEMs. And those OEMs field a sales force approaching 12,000 sales representatives — or a leveraging factor of about 22 to 1. Those 12,000 people are selling Digital products or Digital-based solutions.

 

We in Marketing must lead the company in determining what mix of channels is optimum. And Sales must be involved in the final determination of suitabil­ity within their given geography.

 

For example, in real estate, it's unlikely that Digital would sell directly to small real estate agents. We would tend to reach those customers through one of our indirect channels, such as our relationship with Century 21 in the U.S.

 

If we look at the overall mix of business that flows through channels today, about two thirds of it we would identify as supplementary. About one third of it overlaps with the end-user thrusts as we have presently defined them.

 

Our goal is customer satisfaction. We’re moving from a focus on just satis­fying OEMs or channel partners to a goal of ensuring that the end users are satisfied with the solutions they receive from these channel partners. That causes us to have a much different view of and concern for the way our chan­nel partners run their businesses.

 

Years ago we only had two channels. We sold to OEMs and directly to end users. Now we have a multiplicity of additional channels, such as distribu­tors and dealers. We need to manage all our channels so we have satisfied end users regardless of how the product or service or solution got to them. That’s our challenge.

 

An International Environment — Europe by Bruno d’Avanzo, vice president, Marketing, Europe

 

We are in the worldwide market. No large international customer will ever talk to us if they don't see that there is a long-term corporate strategy behind what we do. So it’s important that we have one corporate philosophy which is very simply stated but very powerful: one company, one strategy, one message.

 

In Europe we operate in 18 different countries and have 12 major languages. In all those countries and all those languages we say:

o We are the second largest computer company. (That statement attracts attention — the curiosity and sympathy for the underdog. Especially if we do it in a non-arrogant way.)

o We are an open, friendly company. (And we prove that with our networking, which is based on an open architecture.)

o We are dedicated to providing systems and solutions to help customers increase their competitiveness. (We position ourselves as the partners for our customers.)

 

In Europe we operate according to a total industry plan which looks at the total application portfolio and says: this application we're not going to touch; that one we're going to do direct; and this we’re going to do with a partner* That industry plan is delivered to the sales force which then goes to the customers.

 

That’s very much the way U.S. Industry Marketing now works, only in Europe we started a bit earlier.

 

In the old days, the sales force used to do the integration work. Now the integration work is done by industry marketing. The whole idea is to make the sales force more productive so they can sell more.

 

In FY85, 55 percent of the total computer market was hardware, 19 percent systems maintenance and 26 percent software products and other services. At Digital the percentage of hardware sales is much higher. Historically, we've sold at the component level, at a low level of integration; and we've done very well with that. But the projections for the computer market in FY91 show the percentage of hardware going down -- still growing, but not as fast as the total industry. And we can extrapolate from that what Digital will look like in FY91.

 

In terms of customer needs in the total data processing industry, there's a natural pattern of growth beginning with a technology base, moving up into component level (CPUs, memories, disks, and terminals), then into systems and networks, then applications, then to services. Between FY85 and FY91, we anticipate a continuous move upwards of the offerings in the industry. You will still need components and the various elements, but the key to growth is the ability to migrate upwards in applications and services as well. The big money is going to move upward toward those growing customer needs. A big part of these new needs will be Network Services, where a big fight will take place between IBM, AT&T . . . and Digital.

 

At the same time, the product differentiation of suppliers will depend heavily on how much added value they can give to technology. The component level is going to be handled like commodities. It’s going to be much more pricing sensitive, with less profit potential. The profit will be higher in the services area.

 

To prepare for these coming changes, we have to build an infrastructure in the Field. One major program in Europe we call the "High Value System Program". With the help of MIS people in the U.S., we’re putting a complete marketing program in place for sales of large systems, which will address such issues as industry focus, application focus, and existing accounts versus new accounts. We'll talk about networks. We’ll address the applica­tion part through usage of Cooperative Marketing Partners. We're putting tremendous effort into this program, creating at the district level Large Systems Selling Groups which provide support to sales units. We'll also pro­vide support at the area level from our technology center in Valbonne, France.

 

We believe that our networking architecture is ideally suited for inter­national customers, who have a need to operate at personal level, at depart­mental level, at city level, at country level and worldwide. The more com­plex their business, the more need for highly integrated systems, connected via Local Area Networking (LAN), Metropolitan Area Networks (MAN), Wide Area Networks (WAN), International Wide Area Networks (IWAN). We have developed these capabilities in-house better than anybody else and we can now apply them to our customers' needs. We don't need to own all the components, but the ability to put it all together.

 

Basically, we've got the products, we've got the architecture. We've got the vision. We can do what our customers want us to do. The only limit is our imagination.

 

A New Customer Communication Strategy by Gary Eichhorn, manager, Product Marketing Programs

 

It is essential that we convey Digital's strategy and specifically our network message to our customers. To do this, we have enhanced our litera­ture, advertising and product announcements and have developed tools for the sales organization to help them communicate our strategy.

 

Historically, we took a menu approach to selling. We'd tell our customers about all of our products and services, and then ask them to integrate those products and services to develop their own solutions. Many times our cus­tomers, who were quite technically advanced, were able to perform this in­tegration. They were able to understand our products in detail, and were willing to do what was necessary to tailor our products to fit their needs.

 

Since that time, the marketplace has become larger and more complex. We're dealing with a lot of customers who are technically less sophisticated, and we're talking to people at higher levels of the organization. Now, in many of our accounts, it is the senior managers who are making very critical de­cisions about what systems and networks are installed. They want us to talk about products, not just in terms of features and benefits, but in terms of complete integrated solutions — how we can solve their business problems. To deliver a complete integrated solution, we have to talk about our custom­ers' applications, about networks to tie the applications together, and about the services needed to support the environment.

 

Our new advertising campaign emphasizes how we differentiate ourselves from the competition. Unlike other companies that promise futures, DIGITAL HAS IT NOW. Digital can deliver many complete integrated solutions today.

 

We've got to make that point at every opportunity with our customers, other­wise they won't be able to separate what's real from what’s only being promised. You'll see the "Digital has it now" theme in all of our advertis­ing. Initially we are using testimonials to get the message across. The ads describe specific examples of our customers' implementation of our computers as integrated information systems. "Digital has it now" is also the major theme for DECworld '86.

 

We have to be consistent with our advertising and literature messages. For example, to simplify our message to our customers, we will soon be publish­ing a single VAX brochure. It will clearly position each member of the VAX family and suggested markets and applications for which each VAX is particu­larly well suited.

 

In the past, we've had many different approaches to product announcements. We should remember that each announcement is an opportunity for us to talk to the press, analysts and our customers about our overall strategy and mes­sage, as well as to describe the features and benefits of a particular product. The Announcement Strategy Committee has been working hard to co­ordinate all of our announcements in the context of the Digital strategy message. For example, at the VAX 8650 announcement we stressed Digital's superior networking, computer architecture, world-class applications and experience, and how the 8650 fits into the strategy. We will continue to stress the overall Digital message at future announcements.

 

Our sales people hold the key to communicating the Digital message to our customers. To assist them, we are developing the tools they need to articu­late the Digital strategy message. The first of these sales tools is a presentation for senior managers on the Digital strategy. This has been delivered to the District Sales Managers.

 

We have also enhanced the Digital Sales Guide by updating the format of the Applications Roadmaps. The roadmaps consolidate information about where to sell our products in different markets and industries.

 

To improve the roadmaps, we made networking solutions an integral part of this sales tool. We also developed a decision tree format which makes roadmaps more concise and easier to use. Hardware, system software, net­working hardware and software, applications software, and services are recommended for each solution.

 

The enhancements to our literature, advertising, product announcements, and sales tools are all designed to help us to effectively communicate our strategy, our strengths as a supplier of complete integrated solutions, and best of all, that DIGITAL HAS IT NOW!

 

Ken Olsen Responds To Questions

 

What do we do when people want to use the copper wire they have in their office? What do you do when someone wants to put television and telephone on the same wire?

 

We have a system that treats data with respect and customers have to do this also. The system we sell — the backbone — is a piece of yellow wire or a piece of fiber glass. One message you must get across to customers is that nobody touches that cable except one person in charge.

 

This morning's message on networking was great. Now, if there’s a good story to tell, why not aggressively advertise it?

 

Once there were seven full-page ads for different companies advertising word processing. Our people would say, "We’ve got to advertise, too," so we would be number eight. By that time, all of the ads looked the same and people never even bothered to look at the name of the company. Just adver- tising isn’t enough -- we've got to figure out what we have to say . .         .

 

I have a list of things I thought of yesterday. Some fascinating things that we never told the world. But, we’ve got them, and this is what the customer ought to know.

o In our system, every terminal in the whole network can use any computer on the whole network.

o Every terminal in a network can exchange data or electronic mail with any other terminal on the network.

o The collection and processing and dissemination of data can be at different geographical locations.

o The resources such as printers can be used by any computer on the network.

o The application can be run on the least loaded computer.

o Some applications can even be divided between several computers.

o One common set of data can be shared by every terminal on the network, and this gives the organization — everyone in an organization -- a common view of the state of the organization, which makes possible common goals.

o Multiple computers and many individuals can work on the same problem on different parts of the same job.

 

Now, these are just a few of the things that we haven't mentioned today... what networks can mean to people. We take much of this for granted because we do it every day. We’ve never told much of the world.

 

What role do you see internal organizations playing in educating the Field and customers about our successful networking?

 

One thing we might do is show customers and people from the press what we have inside the company. Show them how we use it. Recently I was looking for someone and ended up on the wrong floor. So, I went into someone else’s office and said 'Where’s Jeff's office?’ He said, 'I don't know,’ but he was doing software and just logged into something else, typed Jeff's name, and out came the address. You see, we just take it for granted. We use our terminals for everything. So much so that we never think of saying any­thing. We ought to get that message across.

 

So, I think our employees can play a key part in selling networks by demon­strating how they use them. We've learned about networking by doing it and using it ourselves. We ought to capitalize on this as a sales tool.

 

I've heard that PDP-11 generated over $1 billion in revenue last year. How does ths fit into the One Strategy message?

 

Very well. When we say we have one strategy — and it's a corporate strategy -- we can say "VAX is a strategy and our investments are going there as we evolve toward it.' But, in addition, we support the 36-bit and 12-bit machines.

 

There is software we have on PDP-11 that will never be on the VAX, or not for a long time. Also, many OEMs want to stay on the 11, even though they feel someday they may need the addressing space or someday the 11 may not be there. So, they are also interested in VAX.

 

With our emphasis on a clear statement of strategy, and our emphasis on independent business units, the PDP-11 group is now making investments, proposing plans as a business unit and doing this with great confidence, great enthusiasm. It was a pleasant thing last week to hear what they're doing. Now, they still know that eventaully customers will go to VAX. But, in the meantime, we'll take good care of our PDP-11 customers. We'll simplify the product line, do a better job, and the 11 will go on for a long time.

 

Digital seems to be in a good position today. Our products are strong, our stock is up, our finances seem to be in decent shape, and yet many employees are in turmoil because of population issues. How do we balance this out? Cn we help employees £eel more stable, more proud?

 

I think this means that in certain areas we are overstaffed. There are several answers to this. One is that we're growing, and when we're going to need people in the foreseeable future, it's good business not to let them go no. It's also good employee relations and just the right thing to do to treat employees very well, and it’s very important to maintain loyalty. However, the nature of life is such that we all face the danger of losing our jobs. The CEO is the most vulnerable of all. It's just one of the pressures and concerns of life.

 

There is a phenomenon going on in our business; something we’ve promised for years. Now, it's really happening. And that is with the technology and with the use of computers, we use a lot fewer people to get done the things we have to do. It's only with great care that we avoid doing any massive letting go of people. We'll do what we do gently and with care.

 

In general, you know, we have a history of being much more stable in employ­ment and we'll try hard to avoid trauma in this area.

 

What are your predictions about the communications industry?

 

I don't know what's going to happen in the communications industry. I would predict rather strongly, though, that we do our job in offering what people should have. People will not mix up data and telephone, and data and video, and they will, after some experience, learn how to show great respect for their data. It’s important that we keep our goals straight and contribute to the things we’re expert in and not try to take over areas in which we aren't expert.

 

* SNA, IBM, and IBM PC are trademarks of International Business Machines, Inc. MS-DOS is a trademark of Microsoft Corp.

 

 

 


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