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Articles about DEC
Volume 5 Number 4_________________________________________________________________ June 1986
Ken Olsen’s Address To The New York Society Of Security Analysts
The Challenges Of Servicing Today’s Customer
Digital Adopts Corporate Process Strategy
Taking Advantage Of New Opportunities In MIS by Pat Mullen, marketing manager, Information Management Group
Digital's Office Strategy by Henry Ancona, manager, Office and Information Systems
IEEE Computer Society Presents Computer Entrepreneur Award To Ken Olsen
Mahendra Patel Named Corporate Consulting Engineer
Digital Adopts Zip+Four Mailings In U.S.
(On April 28, Ken Olsen addressed the New York Society of Security Analysts. Ken's speech focused on Digital's strategies and structure.)
While we were getting ready for lunch, someone asked me why Digital was so unpopular two or three years ago and so much loved today. Well, back then, we said we had a dull, disciplined, organized approach to computing. We didn't see personal computers as being important except as part of the overall picture. I said that you didn't need hundreds of personal computer makers and thousands of general electronic mailboxes that couldn't talk to each other.
Today we find the same message -- we are still disciplined, organized, planned, scheduled, maybe dull. But it pays off better today because customers better understand what we are saying.
Digital is not a company that is picking out weaknesses in IBM and trying to fill the void before they do. We do not try to make things cheaper than IBM. We, instead, like to think we have a mission and a dream. This mission and dreajn mean years of preparation -- they require tremendous time and patience.
We don't sell the cheapest equipment. In fact, often ours is the more expensive equipment. But we like to measure ourselves by the efficiency of the total solution. This usually means the motivation of the people doing the work, the efficiency of the workers, the enthusiasm, and then the ease with which the solutions work.
Motivation of workers in the computer industry is tremendously critical. Our motivation is to make the work fun, exciting, interesting and to get the job done. And we think we offer, with obr computers, the most useful, efficient software tools.
We used to be criticized for naive attitudes about marketing. Marketing, in the public's eye, is selling something that the customer doesn't need or want. Our view of marketing is to systematically learn what the customer wants, define the product, and then afterward get the message across. In computing, this often means selling ideas that are strange to people.
The mission we had, when we started Digital 28 years ago, was to introduce interactive computing. It was something we had demonstrated at MIT, and we felt the world needed it. We did interactive computing with very fast, powerful computers that were small and relatively inexpensive.
One of the by-products of that work at MIT was time-sharing. There were two computers in the room that students could use 24 hours a day. They discovered that when one person was using the computer, another user could use the computer, and both thought they had a computer full-time. Out of that came time-sharing. Our mission expanded from single interaction to computers with many users, each thinking they owned the whole thing.
In the early '70s, we saw a change coming, that eventually anybody could make the kind of computers we were making. We had to have a mission which was bigger, harder and more challenging. By the late '70s, our strategy was very well defined and organized.
The first part of the strategy was to lay out a protocol for a network.
DECnet, our protocol for organizing communications, became the first product in our grand strategy. Over the last 14 years, it has become the most popular product of its type in the world. The discipline involved in a product like DECnet is tremendous.
The next bit of strategy was to develop our VAX computer architecture. Each piece, each interface was spelled out. The first VAX was announced in 1977 and, because of the layers and interfaces, each piece can be improved over time without upsetting the whole machine. The VAX was a unique idea and no one else did it. We’ve spent 12 years on the same VAX architecture, and it's getting to be good.
The next bit of strategy was to have one software system on the VAX. The VAX comes in many sizes — from quite small to very large — but it's the same computer using the same software system throughout the whole range, from the tiniest one to the biggest one. You might ask that if the idea is obvious, why hasn't anyone else done it? Well, it's probably because the discipline involved is extreme and unusual in our kind of industry.
The next piece of formal strategy was to decide on Ethernet as an interconnection between large numbers of computers. Ethernet was first invented by Xerox. It was technically complex but the problems were defined, and it was seven years ahead of any other interconnect system. Ethernet is a simple, elegant way of networking and today we have many thousands of systems in operation.
The fifth part of our strategy is called "clustering." I must admit that sometimes our grand strategies are an excuse for elegant sophistication and this is probably one of them. We were not about to make it a simple redundant computer, or a simple parallel computer. We had to take five years to define everything in one, magnificent piece of clustering. In those five years, I must admit to no end of frustration, but now most VAX computers we sell are made to go in a cluster. This way we tie VAXs together and, in effect, make very large VAXs.
Now what we have to offer to a customer is the opportunity of tying together a whole organization. There is a central data-processing system, the large clusters on a backbone, Ethernet. Each department has its own Ethernet hooked to this backbone, and in the office, there are a large number of MicroVAXs tied to that Ethernet. Each one has 16 terminals or a large number of personal computers. In the factory, MicroVAXs run machines or transfer lines and in the laboratory, there are MicroVAXs running the experiments, test equipment, or analyzers. In engineering, it's the same system. In each case, computation is done by large VAXs. The workstations are MicroVAXs, and the terminals are run on MicroVAXs. All are tied to Ethernet, and the whole thing runs together.
The ability to tie the whole organization together is a dramatic break with business traditions, which often encourage holding onto data. Power used to mean holding onto all of the data. In the modern world, we want everybody working at peak efficiency. In the factory, orders don't come down from the top. The factory is fast becoming something interactive where changes can be made immediately.
The system that we offer -- indeed the system that almost every company is trying to develop — is a system which hooks everyone together. Anybody can talk to anybody; it is democratic in that sense. You can protect some people from some calls; you can protect some information. But you lay it out that everybody can talk — that's networking in the modern world of computing. This is quite different from traditional computing where you find out in advance who can talk to whom and what he or she can get. Any change to this approach to networking requires reprogramming that can take several days. We add about 500 nodes to our network at Digital each month, and we don't have to completely shut down the systems.
There is always a conflict in how you organize the company, just like there's a conflict with children — discipline and freedom. Let them learn by getting into trouble, yet keep them safe. There are always the paradoxes and the conflicts in a company where you are dependent on creativity. We solved it for a long time by giving people freedom. But, as a result, a lot of groups followed their own goals. Now we still give them vast amounts of freedom, but there is one set of goals. Now, the efficiency we enjoy comes partly because the goals are understood, and doing "your own thing" isn't as important as getting the main job done.
We are today a completely different company than we were a few years ago. We have evolved from dozens of product lines -- each competitive with the other, each going its own direction — to one company, with one strategy, one plan and one set of goals.
(The following are excerpts of the keynote speech by Dave Grainger, vice president*’, Field Service, delivered to the CBEMA Service Management Council on May 13.)
Throughout our industry, service managers have a special role to play in helping their respective companies face current and future challenges. Over the past year or two, the growth of our industry has slowed. While there have been some signs of business improvement recently, I don’t think anyone expects a quick return to the good old days of the late '70s and early '80s. I believe this new world is good for all of us because it creates opportunities. The key is to understand the new reality, accept it, and aggressively pursue the changed environment.
We are fortunate to have a group of excellent teachers — our customers — who will help us understand this new reality, provided we are willing to listen.
Customers are the true experts of their own needs. And recently they have been assuming more and more responsibility for making sure these needs are heard and met. In the long run, rising levels of customer education, knowledge and expectation are better for both them and us -- providing, of course, that we take the time to listen, to really hear, and respond accordingly.
Customer trends in distributed data processing, multi-vendor solutions in most cases, and the demand for networking define the reality of doing business in today's computer industry. In the short term, these factors are partially responsible for the slowdown in computer sales; the marketplace is looking for a complete solution.
First, that means making our products easy to connect in networks. We at Digital have accomplished this by creating a common hardware and software architecture for our computing systems.
Just as important, however, we have built our products so they can be networked with other vendors' systems. We do this by providing gateways between our network architecture and those of other companies. We also participate in the development of industry standards for networking, so all vendors' systems can one day talk to each other.
The issue of standards is a good illustration of the increasing importance of customer input. A few years ago, when Digital and some other vendors got together to establish a standard for local area networks, it was very much a case of manufacturers taking a leading role.
Today, that standard -- Ethernet -- is well established, with about 80 percent of the total local area network market. One of the basic success criteria for Ethernet is the ease of interconnect for the 100+ authorized manufacturers. It promotes the multi-vendor environment.
Now, however, customers are taking a pro-active leadership role in developing standards for networking and computer integration. As customers link their computers together in networks, the network itself becomes the system. All areas of the organization rely on it, so it simply has to work. D.F. Blumberg, a well-known analyst of the network market, has cited cases where the cost to customers of network failure has exceeded $1 million per hour of downtime.
The fact that most networks consist of several vendors' equipment complicates this service challenge. Analyzing network faults and coordinating timely and effective service in this multi-vendor environment is beyond the ability and expertise of most network users.
This multi-vendor structure requires a service response which involves much more than just hardware and software support. We must deal with inter-system data access, data protection, maintaining the most cost-effective data paths, and other communication issues.
Today’s environment necessitates three service dimensions: the first, traditional dimension incorporates planning and implementation support services for one's own equipment. The second is the recognition of and response to the mixed-vendor system. And the third dimension is a response to local and wide-area interconnects involving a mix of other vendors' systems.
We at Digital have been grappling with the problems of servicing multivendor systems for quite a while. We began, like other vendors, by servicing only our own products. About 14 years ago, mixed-vendor service activity by Digital Field Service started on an ad-hoc local basis — driven by customer requests.
In 1982, we made the strategic decision to formally establish a multi-vendor product service capability for systems which are part of a Digital system. Today, under this program, Digital Field Service supports more than 175 products manufactured by other vendors. Many of these vendors have no on-site service capabilities. These other vendors' products are part of systems and networks which represent hundreds of millions of dollars of Digital-installed equipment.
Network service was driven by customer demands. Blumberg and other analysts have identified a strong customer desire for, in his words, "one organization to be responsible for all customer service requirements." Users are looking to their primary network vendor to provide this "one-stop" network service.
One of Digital's multi-vendor network services, which we call Netcare, is designed to give customers a single service contact for all multi-vendor networks which include Digital systems, regardless of the mixture of hardware, vendors, or technologies involved. Initially, the services offered by Netcare include fault identification and isolation, vendor notification and response tracking, and post-service verification, to insure that each repair is successful and that network availability has been restored. We are now piloting this package at a number of customer locations.
Our Customer Support Centers will also play an enhanced role in network service strategies. In fact, we will invest over $1 billion throughout the next five years in these operations in order to meet customer demands.
All of us have made major investments in people, processes and technology to position our companies' uniqueness in the marketplace. Through organizations like ADAPSO and CBEMA, we must protect these investments in diagnostic systems, software, and proprietary tools, as well as other intellectual property from unauthorized loss and use.
Additionally, we need to develop service strategies, policies and procedures that break down barriers between vendor service organizations and that allow us to cooperate together in solving the needs of our mutual customers.
Effective, coordinated network service is more cost-effective for the vendors involved. Multiple responses to a single problem, unnecessary service calls, and other expensive duplication of effort can be minimized, helping us all to improve productivity.
If we, the service management of this industry, commit to work together to solve multi-vendor environment problems for our customers, we have the chance to inject new life into the industry — to be the cornerstone of its recovery.
(Key managers from Engineering and Manufacturing met in Marlboro in Q3 to refine and ratify the Corporate Process Strategy. The following excerpts from several of the introductory presentations provide an overview of this important new direction for the company.)
"Most people think we need a product strategy so we can tell people what to do and so people won't change," said Jack Smith, vice president, Engineering and Manufacturing. "They look at product strategy as if it were cast in stone. But I look at product strategy differently. To me, product strategy is put in place so you can make changes. It's extremely difficult to change something when you don't understand what it is; when it's not within a framework that's understandable.
"We're in a very complex environment. We deal with very complex issues. Anyone who doesn't think that things are going to change daily is sadly mistaken. So look at product strategy as a tool for change, not a tool for non-change.
"In the past, the area of 'process' — which includes cost-saving devices, communication devices, methods of communicating with one another — was thought of as a set of tools to help you get your job done. They were useful, but sooner or later you'd get the job done anyway. Today, the systems we build are so complex that without process -- not just engineering process or manufacturing process, but process in general — you're not going to be able to get your jobs done at all.
"We also have to realize that many of the processes that we're involved in today are going to have to be almost perfect," Jack observed. "We can no longer tolerate processes that allow slippages of even a month. As we all well know, the windows of market opportunity are becoming very tight.
"Half a dozen years ago if we had a product slippage of six months, we could still have a viable product. Today a time-to-market slippage of one or two months can make the plan completely invalid.
"But our process strategy is running behind product strategy. The emphasis has been on product because we are a product-oriented company. But now we have to put equal intensity and attention on process because we're not going to get the product without the process; or it's going to be so late that it's useless."
"Digital has two primary strategies," added Bill Strecker, vice president, Engineering Product Strategy & Architecture. "The first talks about what products we wish to build; and the second, the process strategy, talks about the tools that we can use to design the desired products and introduce them to the marketplace.
"The product strategy is addressed toward our customers, who depend on it. When customers decide to put their businesses on information systems products manufactured by Digital, they are committing their businesses to our products —- present and future.
"The process strategy, on the other hand, is addressed toward our own engineers and manufacturing people. And they ought to be as concerned with our process strategy as our customers are with our product strategy.
"Process strategy relates to how we are able to do our jobs internally," explained Bill. "If we have a good process strategy hopefully we're willing to commit our business to that strategy and live by it. If we have a poor process strategy, that's going to adversely affect our ability to do what we have to do.
"The strategy states what you want to accomplish. For instance, you want to avoid obvious overlaps and duplication. Equally important, you want to identify obvious holes.
"Also, investments require large amounts of money over long periods of time clearly require that you understand where you want to be some number of years out. In the absence of a strategy, you'll never make those investments .
"A strategy also gives you a mechanism to measure progress. It enables you to periodically review where you are and whether you're getting where you want to go.
"Process is important for the efficiency and productivity of Engineering and Manufacturing. And, it relates to time-to-market in today's competitive environment. Because of advances in technology, a delay of a year in a product typically reduces its competitiveness by 30 to 40%. Time is all-important.
"Having a process strategy should help our predictability," said Bill. "Digital's overall corporate product strategy depends on delivering a broad base of integrated product capability at the time we say. If one of these products doesn't come out on time, there's a ripple effect which means that the overall product capability we promised is not deliverable. We are delivering to the customer a complex set of integrated products. All of them have to appear when they are supposed to appear if we're going to deliver this overall set of products.
"Process strategy also promotes quality. Quality corresponds with customer satisfaction and therefore with our ability to collect revenue from our customers.
"Quality is an attribute of an entire organization, not just a single function or a single group. Our customers don't buy single products -- they buy systems. It doesn't make sense to deliver a quality CPU and a poor quality communications device. Everything has to work together. So no single engineering group can aspire to deliver a quality product. Quality has to be an attribute of the entire organization.
"Similarly, it would be impossible for an engineering group to deliver quality products without quality manufacturing. And even Engineering and Manufacturing together would not be able to deliver quality products without a quality service organization.
"In other words, when we talk about attributes like quality, no single group or single function can deliver it alone," concluded Bill. "If we want to deliver these attributes, they have to be broadly agreed to by the entire organization and supported by a corporate process strategy."
"A strategy is a set of actions, not just a list of tools," observed John Manzo, manager, Systems Development Process, and chairman, Corporate Process Task Force. "In developing a corporate process strategy, we are looking at a set of actions needed for us to achieve competitive advantage.
"In developing a preliminary or 'pro forma’ strategy we had several basic assumptions and goals in mind.
"First, we had to acknowledge the strength of many of the tools and methods we already have today. These tools need to be increasingly integrated so they can communicate and inter-operate, for efficient use. As new tools are developed they should be able to be easily added to the existing set. They should either complement or replace an obsolete tool. We want to keep our tools up to date without invalidating the use of other tools.
"There must be a streamlined link between Engineering and Manufacturing. The process needs to facilitate work across organizational boundaries. If we are really going to produce total systems in the future, we need to take full advantage of our strengths and inter-operate one with the other.
"Basically, we need to establish a homogeneous data medium with an agreed- upon set of interfaces across Engineering, Manufacturing and Field Service to provide the ability to integrate and share our current excellent tools as well as new ones.
"We have to develop technology-independent design tools and flexible processes, where appropriate, to reduce the effects of rapidly changing technology," said John. "Also, we need to provide an evolutionary pathway for those tools to exploit future directions of technology. And we need to synchronize the evolving design of physical technology tools and processes.
"We have to make it easy for tools that have been developed independently to be incorporated into this total environment. That includes tools developed by outside vendors and also tools developed locally that turn out to be very useful over a wider spectrum of use."
In other words, the increasing complexity and interdependence of Digital's products and the importance of time-to-market have made it essential for the company to focus on "process" -- the methods and tools used to design, build, deliver and service its products. And the Corporate Process Strategy will help promote the efficiency and productivity, the cooperation and teamwork needed for continued success.
As a result of the discussion, three points were added to the Strategy: the call for a Process Architecture across Engineering, Manufacturing and Customer Service; identification of a core set of preferred tools (building blocks); and empowerment of local groups across Digital to develop specific layered strategies, in the context of their needs, from the general strategy.
"Although every attempt was made to develop a strategy that will serve our needs for the foreseeable future," concluded John Manzo, "we recognize that rapid changes in technology and shifts in the competitive climate will require us to adjust this strategy. We therefore believe it is important to view this strategy as a 'living document,' under 'ECO control,' and encourage suggestions for improvement and refinement over time."
(Details of this meeting, in the form of a proceedings, are available from Cathy Ward at DTN 223-9791, MLO3-2/E84, VAXMAIL MODEL::WARD).
Today, many companies are recognizing the strategic importance of information systems within a corporation -- that they can be used as competitive weapons and can change the cost structure with which they do business. So the metrics companies use to evaluate a computer vendor are changing. They are looking for a long-term relationship — not just products. And the corporate director of Information Services (IS) is being given expanded authority, with influence over most, if not all, computer purchases.
Historically, information processing fell into three categories. The part known as IS, MIS or EDP consisted of custodial systems (payroll, order processing, billing, etc.) — the automation of mundane, repetitive tasks. Technical computing consisted of labs, engineering and manufacturing, where the department that needed equipment bought its own. And the end-user computing area included office and decision support applications. IBM owned the MIS area. Digital was very strong in the technical area and had success with time-sharing in the end-user area and office automation.
In the last few years, that environment has changed because more people have recognized the strategic importance of information. Companies are now doing more planning, and information generated in one part of the company must be transported to other parts to help in decision making. So instead of every department buying whatever computer equipment it thinks it needs from a variety of vendors, there is a need for company-wide control and standardization. Companies need an infrastructure that enables information to flow smoothly in the directions they need it to go. So they create standards within the company so everybody is using the same definitions of common terms like "sales call" and "mean time between failure." And they put together a preferred vendor list, so the equipment they acquire can all plug together. Typically, the MIS director is given responsibility for the success of the company's entire computing strategy.
In the past, Digital sales people never talked to the corporate director of IS. IS directors were viewed as being totally committed to IBM. Therefore we sold around them.
Today, about 95% of all networks and 90% of all office automation decisions are under MIS directors. About 65% of all manufacturing floor systems are coming under the influence of the MIS director, about 50-60% of CAD systems, and about 45-50% of lab systems.
So all of a sudden, to protect Digital's existing market base, we have to at least educate MIS directors so when someone from the lab says, "I want to buy a system from Digital," they don't ask, "Digital who?" So in some cases, we need a two-pronged sales strategy — selling to the people in the lab who will use the system and at the same time educating the MIS director so that when the request comes through for approval, it gets approved promptly. At the same time, we want to participate more heavily in the rapidly growing MIS segment of the market.
While the scope of responsibility of MIS directors has increased, a new kind of person tends to fill that job. In at least half the Fortune 500 companies today, the person who is MIS director is not a data processing professional by trade. Most are general business managers, and many have spent some time
These people are concerned about how technology can help business, rather than technology for technology's sake. So we have an audience that is more receptive to a business-relationship sell.
Our strategy is a "Trojan Horse" augmentation strategy. If you were to walk into ABC Manufacturing Company and say, "Let us replace all your IBM equipment and run your systems on Digital," you would have no credibility. They would kick you out. So rather than go head on, we want to put in a system that shows off the strength of the Digital product set without being threatening. We have to help them solve their immediate problems.
The biggest problem most MIS directors face is making corporate data readily available to managers in a timely fashion without disrupting the order processing, billing and other systems that can provide this data as a byproduct of their normal operation.
We suggest building an infrastructure analogous to a wholesale distributor -- one that obtains data in bulk from corporate mainframe machines, checks the quality, and repackages and delivers information to the consumer. The MIS director can offer this information service as a utility, separate from the ongoing production operations. This kind of system is commonly called an "information center." This is the fastest-growing part of the MIS market. The information center snapshots data from the larger machines and applies a level of quality assurance to it — such as combining data that may have been entered in different but equivalent ways (such as "VAX-780" instead of "VAX-11/780"). It also can acquire and distribute external data.
Digital's information center demonstrates our ability to interconnect with IBM, our networking and the modularity of our architecture. So after we successfully solve their problem of getting data to end users, MIS directors are likely to invite us to help them, as partners, solve other business problems.
In the U.S., one of our strategies is to hire former MIS directors to serv^ as resources in the field. We call these people "MIS consultants." One we hired was a vice president of IS for an $800 million conglomerate for three years. Another was vice president of International Technology and Information Systems for a major bank and worked for IBM for 20 years before that. In other words, these are highly qualified people. Their job is to go in and open a door, to build a relationship, to educate IS managers on the Digital style of computing.
In the MIS market, we're dealing with a long order cycle -- probably six to nine months. The customer is building an infrastructure to use information strategically. There's a whole new set of criteria to look at. They have to feel that as they evolve over time and their needs change, we will be able to match those needs. And we have to give these accounts the special attention needed to establish a long-term relationship.
In support of this effort, U.S. Sales is putting together Large System Selling Teams to help reduce the selling cycle of complex projects and to ensure that we win such projects. Teams will consist of resources that were already in the Field, organized under a team leader. Teams will include the MIS consultant, networking people and sales people. Then, based on the project, experts in such areas as office, CAD, and technical computing could be added to the team.
Our goal is customer satisfaction. We can't be hit-and-run. We have to build that long-term relationship. Remember, customers "buy a relationship and then order products."
When the Office and Information Systems Group was created in 1982, Digital had been in office automation for a long time and had had success with the DECmate word processor; but in this marketplace the company was still an unknown quantity. The perceived leaders at that time were IBM, Xerox and Wang.
Since then, Digital has made considerable progress. Now, many industry consultants see us as the leader in this marketplace. In the office, in terms of product capability, we are now second to none. From a market-share position, we’re number two and catching up. IBM is the competitor we deal with most of the time.
When we began to focus on the office market, we found that most people wanted to do word processing, electronic mail and personal computer applications, such as spread-sheets, in a single easy-to-use system.
So in 1982 we introduced ALL-IN-1. Today, it remains a key element in our strategy and according to the latest Dataquest survey, is the leading integrated office system on the market, by any measure — number of licenses, number of users, or revenue. In fact, according to Dataquest, ALL-IN-1 is used by almost 40% of the million people in the U.S. who use integrated office systems.
We also offer specialized ALL-IN-1 systems that go beyond word processing and electronic mail and other office-type applications to provide business solutions for particular departments, such as sales, marketing or finance. In addition, we are working with the new industry marketing organizations to provide ALL-IN-1 solutions tailored for specific industries. These products by their very nature must be capable of being used in local language around the world. ALL-IN-1 is available in over 10 languages today.
Digital's strength in networking is probably the most important factor in making people see Digital as the leader in office systems. The backbone of any office system is the network that enables people in offices to communicate with one another. With Ethernet and our DECconnect wiring scheme, we can now provide customers with an easy, fully integrated, complete set of network capabilities to allow them to wire their offices. Digital is the only vendor to offer electronic mail systems running on many network nodes which grow from one to many thousands of users.
Multi-vendor environments is another area of strength for Digital. Almost all of our customers also have equipment from at least one other vendor -- usually IBM. So our strength in interconnection with IBM is important.
We know that our customers have millions of PCs installed. Therefore, we are making the connection between PCs and VAXs even tighter. We already offer our WPS-PLUS word processing not only on all our VAX systems but also on the IBM PC. So customers that already have IBM PCs can run WPS-PLUS on those machines, and with Digital networking products can interconnect those PCs with VAXs, Rainbows, DECmates and Pros, for fully compatible word processing and document transfer.
We want to make our office network even easier to use. We'll build systems that can be taken out of the box, plugged into the network and are ready to go to work. And these ready-to-run systems will require no systems generation, no technical management, and no professional systems management. We are taking our word processing beyond words and incorporating both text and graphics to meet the needs of high-growth for the technical and documentation market. We are also responding to market demand for easy-to-use information management systems, so managers can more readily access and manipulate information in distributed databases.
In the last few years, we have made significant inroads in the white-collar office. Now roughly half of our office business is in Digital's traditional areas of strength - engineering, the lab and manufacturing. The other half is in new areas — the front office and white-collar business departments. That's been a very successful, high-growth area for us.
In the past, Digital's strength in technical applications gave us a path into the white-collar office in basic industries. Now we're finding that ALL-IN-1 and other office products help open the doors for sales into new accounts. An increasing percentage of our office business is now with first-time customers.
This trend is due, in part, to the fact that many new markets on which Digital is focusing are in service industries which don’t have engineering departments or labs or factories. So, as we increase our penetration ii) government and service industries, we are increasing our business in office information systems.
The Institute of Electrical and Electronics Engineers (IEEE) Computer Society has presented the 1986 Computer Entrepreneur Award to Ken Olsen.
The award, presented this year for the first time, was established to "recognize and honor technical managers whose outstanding leadership developed the growth of some segment of the computer industry."
According to the society, Ken was chosen for "having pioneered the development of small computers, and for his foresight in the founding of Digital, which began with three individuals in 1957 and has grown to become the world's leading manufacturer of networked computer systems." The presentation was made by Dr. Ming T. Liu, vice president, IEEE Computer Society, at the International Conference on Distributed Computer Systems, held May 20 in Cambridge, Mass.
Mahendra Patel has been promoted to the position of Corporate Consulting Engineer. In this position, Mahendra reports to Bill (BJ) Johnson, vice president, Distributed Systems Engineering/Marketing, and is responsible for the company's advanced development and architecture efforts in communications networks and local area systems.
Mahendra joined Digital in 1982 as Technical Director, Software Engineering Group, and was soon named Technical Director, Systems and Communications Engineering Group. It was in this position that he led the development of a "Digital Standard Relational Database Interface" for the convergence of two developments in relational database products, Rdb/VMS and Rdb/ELN. He then was named Technical Director, Systems and Clusters Engineering Group, where he led the development of multiprocessing options for the company. Most recently, Mahendra led the technical planning and architecture efforts that culminated in Digital's highly successful networking products.
Prior to joining Digital, Mahendra was employed by International Computers, Ltd., as chief technical consultant. He holds a B.S. degree in mathematics from the University of Manchester, England, and a Ph.D. in electrical engineering from Cambridge University, England. The author of numerous technical publications, Mahendra is a member of the Institute of Electrical and Electronics Engineers (IEEE) and the Association for Computing Machinery.
Robert Horne has joined Digital as Process Industries Group Manager, reporting to Jerry Witmore, vice president, Basic Industry Marketing. Robert has 25 years’ experience in marketing and general management. During the last eight years, Robert has held several senior management positions with Stauffer Chemical Co. of Westport, Conn. Prior to Stauffer, he had spent 11 years with I.C.I., one of the largest chemical companies in the world. He holds an M.S. in chemical engineering from Cambridge University and an MBA from Harvard Business School.
Digital can realize substantial savings in postage and distribution costs by converting its address records to use the new Zip+Four code developed by the U.S. Postal Service.
The new system is more accurate and cost-effective than mechanized or manual sorting methods. By using Zip+Four, postal costs and other postage rates paid by businesses will be reduced. The additional four digits identify city blocks, rural routes, post office boxes, individual buildings and, in some cases, firms and floors within buildings.
The Postal Service processes mail that is carrying the full nine digits first, then pre-sorted mail, and five-digit mail. Presently, only two percent of all outgoing First Class Mail from Digital uses the expanded zip code.
Besides postage discounts of 4.5 cents per piece, Digital could benefit from:
o identifying incorrect addresses of new inquiries and/or customers by reducing late and non-delivery problems and associated costs;
o eliminating inaccurate addresses from promotional mailings to reduce unnecessary literature manufacturing, postage and distribution costs;
o pinpointing specific demographic categories for promotional efforts; and o reducing costs for bulk mailing to carrier routes.
In addition, if Digital assigns unique Zip+Four codes to departments such as Accounts Receivable, Customer Services, Accounts Payable and Purchasing, in-house processing of incoming mail will be automated and more efficient.