by Richard Seltzer, email@example.com, from DECWORLD, the Company Newspaper, March 1983
From its earliest days, DEC has been an international company. It set up its first foreign subsidiary in Canada in 1963. A year later, it opened offices in Australia and in Europe. Today the General International Area (GIA) consists of: Canada; Japan; the South Pacific Region (Australia and New Zealand); and the Country Development Region (CDR), which spans the globe, including Puerto Rico and countries in Central and South America, the Far East, and Africa. Not including Manufacturing, it now has about 4000 employees around the world, 320 of whom are located at area headquarters in Acton, Mass. It accounts for about 10% of DEC's sales.
In larger markets, DEC, through its local subsidiaries, sells directly to end users and to OEMs (Original Equipment Manufacturers), very much as in the U.S. and Europe. Elsewhere DEC works through third parties called "distributors." These are locally owned independent businesses in the country in which they operate. They are authorized to offer sales and service for a subset of DED's product offering (usually the entire PDP-11 and VAX lines). These businesses are the exclusive representatives of DEC in such countries as Venezuela, India, Nigeria, Argentina, Chile, South Korea and the Philippines.
DEC's operations in a country are typically set up as a single legal entity. In Canada, for instance, Sales, Service, Manufacturing and product lines are all part of Digital Equipment of Canada, Ltd.
"We try to do business the same way in every country," says Jerry Witmore, vice president, GIA, "with adaptations to suit the local cultural needs and to meet government requirements." Modifications in software and hardware, such as the capability to use the Kanji character set in Japan, are developed by Computer Special Systems (CSS) and Software Services.
"Developing countries have followed the pattern we saw in the U.S. 20 years ago," notes Jerry. "They first buy computers for universities and use them primarily for scientific research. But because thee cost of computers has gone down while their performance has improved, developing countries can now get far more computing power for the often limited money they have available. Twenty years ago it would have cost $1 million for an average system, and ten years ago the cost was around $100,000. At those prices many countries simply couldn't afford to get started. But now with DEC offering computer systems that sell for under $10,000, opportunities in developing countries are expanding rapidly.
"Low cost computers and sophisticated easy-to-use applications programs can help developing countries move into the modern industrial age more rapidly and smoothly than ever before," adds Jerry. "For instance, they might buy computer-aided design and computer-aided manufacturing capability, all prepackaged; and train their own people to use it and so develop their own industry.
"To decide which countries we should make investments in," he explains, "we look at the political and economic environments and the state of development of the computer market. We try to decide where the best business opportunities lie. We consider the growth potential, the barriers to growth, and what we can do to overcome those barriers. These factors change all the time.
"Such problems as computer nationalization in Brazil and the currency crisis in Mexico are day-to-day occurrences to us. We must cope with international currency fluctuations and inflation that is as high as 100% in some countries. We operate on a set of plans that may change dramatically at any time. The subsidiaries and the distributors are our main sources of information -- they build these factors into their plans."
Responsibilities in GIA have been decentralized and delegated in the subsidiaries. "We at headquarters give them strategic evidence and help them develop their plans," says Jerry. "But they are simply too far away for us to try to give them day-to-day technical, sales or marketing support.
"The biggest growth opportunities for us are in those countries where we're not yet number two," he adds. "For instance, in Japan, the second largest computer market in the world, we have a very small market share. With continued focus and effort we could have considerable growth there.
"We have many countries at different stages of e3volution -- from Canada which is a leader in computer applications, to countries that have had very little exposure to computers. As a result," he concludes, "we get a dynamic picture of countries in transition all the time. This gives us exciting opportunities to test new and different approaches, to try things the company hasn't done before, and to adopt and adapt innovations from other parts of the company."
"DED's customers throughout the General International Area have the same requirements and expectations for complete service coverage as those in the U.S. and Europe," emphasizes Don Zereski, manager, GIA Field Service.
The applications of DEC's computers tend to be global. For example, a bank headquartered in Tokyo, with branches in 50 other cities worldwide, might place DEC's products in 30 of those cities around the world. The system performance requirements and, therefore, the service requirements do not vary appreciably from city to city. "The time zones, language and communications networks might vary," notes Don, "but the performance requirements will not. We must provide the same high quality service in Tokyo as we do in London, New York, and Panama."
The diversity of applications is enormous. DEC's products control transportation networks in Australia and Mexico, communications in brazil and Santa Domingo, race tracks in Hong Kong, aluminum smelters in Canada, machine tools in Japan, manufacturing technology in Bangalore, India, ocean research in Puerto Rico, and health care and patient records in New Zealand.
The complexity of the challenge to the service organization is further compounded by the number of different DEC products in use. "We still service some of the first machines produced," says Don. "It is not at all uncommon for a Field Service branch to be required to support multiple models of several product families, each requiring unique spare parts, technical documentation, test equipment and trained technical personnel. Not too long ago, we had a request to provide special service for a PDP-1 located at the Atomic Research Center in Chalk River, Canada. The PDP-1 was the first computer produced by DEC. Fortunately, we were able to locate the right technical resource and the part. The average DEC service location in GIA must stock and provide replacement and/or repair for over 4000 individual parts.
"The key to success in GIA, and, in fact, most computer service businesses, is having the right part, in the right place, at the right time, in the right quantity, with the appropriately trained technical person available to diagnose and remedy the malfunction. The large geography of GIA, coupled with the multitude of individual governmental rules and regulations, time zones and languages compound the task," he explains.
"Consider for a moment the requirements and difficulties involved in transporting a single emergency spare part from our Distribution Center in Woburn, Massachusetts, to Sydney, Australia, or to Nigeria. The distances and time zones alone are a major consideration. If the request for the part is received in Woburn on Friday morning, it is already Saturday afternoon in Sydney. How do you communicate to check a part number of an alternate part selection? Our Woburn logistics center as well as our Acton support center must be capable of responding to these emergencies 24 hours a day, 7 days a week. Clearly, we try to do as much advanced planning as possible to minimize the occasion for emergencies and, in fact, carry much more stock to further minimize occurrence. But having the right part is only part of the solution. Before we can actually transport it, we must have the proper documents required to export it from Woburn and to import it into the customer's country. The myriad regulations, duty codes and sales tax requirements add to the complexity.
"In addition to having the right parts in place, we must consider the availability of trained and qualified service engineers. The average service engineer today requires about eight weeks of initial training and three weeks a year of training on new products. Most of our training is performed in English, which makes recruiting difficult for those countries where English is not the native language. If we do not have the correct person in the physical location and another is required from outside the country, it again requires special care and planning. We must prepare our support personnel with passports, visas, work permits, and, yes, the occasional trip to the dispensary for a precautionary vaccination. Booking flights, making special hotel arrangements and requests for permission to exchange dollars to another restricted currency all take special knowledge and planning.
"Our people are often required to perform above and beyond the call," adds Don. "For example, a recent service call into the People's Republic of china required that the engineer take an overnight ferry boat from Hong Kong to Canton and then connect with a train which took two days to reach the site. He literally disappeared off the face of the Earth, returning three weeks alter. In other locations, engineers have had their passports confiscated until the customer was satisfied that the systems were operable."
Don has been with DEC for 20 years and has been in charge of GIA Field Service since 1972. He has been actively involved in numerous new DEC subsidiary start-up operations, as well as the on-going operation of the GIA subsidiaries.
There are now about 2000 people in GIA Field Service, 105 of whom are headquartered in Acton, Massachusetts.