Conference 7.286::digital

    Well said and right on.
    
    The indirect selling through the channels strategy has stumbled along
    until now ONLY BECAUSE there was demand created by the last vestiges of
    the DEC direct sales force.  Now that there no longer is a DEC sales
    force, there is no longer any push taking place with our long term
    customers.  The distributors don't develop and coax that type of
    relationship - they only fulfill.  Our marketing is non-existent for
    the most part, shameful for what does eek out of the door.
    
    Three simple rules.  Three simple objectives.
    
    Now who do we tap in that senior management group to do the deed, take
    the risk, and get fired next spring?
    
    Randy
    

    Your three points on what the company needs is right on. It is a
    proactive, KISS oriented direction that is directed at revenue growth
    not "slash and burn" TFSOism.
    
    The question is how do we get the message to the executive suite?

>    The question is how do we get the message to the executive suite?
    
    
    1) Write the note here
    2) Mail them the Note
    3) Phone the relevant persons secretary and say that you're happy to
       discuss your thoughtful suggestions with their boss.

	

	1. Add 1000 people.  I'll be conservative and estimate an average
	   fully loaded cost of $65K per.

		Additional SG&A cost of $65M

	2. Lower prices below cost, make it up in volume.  Okay, I'll estimate
	   we lose $100 per machine.  But because we have advertising and more
	   sales people, we will see 1 million machines.

		$100M less at Gross Margin

	3. Advertise, advertise, advertise.  I'll estimate another $50M.

	
	Sum of the above = additional $215M loss above and beyond the existing
	loss.

	I would prefer to have had a ticket on the Titanic.  At least I know 
	that some of the passengers survived.  I had a chance to be one of them.

OK - What are we GOOD at.

1. Alpha.
2. Networking
3. Point consultancy.

What does this suggest ?

We are TECHIES..... So, lets get out there and do what we are capable 
of.

Alan

    re: -.1 
    
    We are Techies.. Yes.. but doing that and doing that to the best
    of our ablities isn't enough anymore.
    
    We need air cover in the form of marketing and advertizing to 
    create market demand and acceptance of our products even before
    we call on a customer.
    
    Our core competency will let us go bankrupt while our competitors
    in a weak market grow 30% year over year...
    
    We need to learn how to market and advertize before we don't have 
    enough revenues to fund our R&D and engineering... Then we will have 
    absolutely nothing to sell.
    
    JMHO
    
    John W.

    .4 has valid points.   
    1.  Adding an arbitrary number to sales isn't it.    Creating 
        a system to give incentives to whoever sells Digital products 
        may help in this area.    What % total is current sold thru
        external channels anyway?    This has grown alot if I remember - 
        could this be a new thing everyone needs to get used too? 
    
    Too much of 2 steps forward 1 back...
    
    2.  Alpha and computers are a sliding scale - cutting down number
        of models would help nothing - less for the customer to choose
        from - this seems in line with # VAX offered...
    
    Don't scrimp on product line.
    
    3.  Advertising more - more than what - nothing.   I agree that  we
        need  to get our message out - but watch the advertising budget!
    
    
    In my world the big snag is our internal systems - things like how I
    can easily do SOW Statement of Work, Invoice, etc...   I suggest that
    every little area in every units scope is where we need to concentrate
    improving things.   
    
    My take on this...   its the little things: 
    
    It's these little things in alot of areas that if made simple and made
    to generate revenue will mean a BIG difference.  
    
    Kind of like...
    
    Digital's revenue chain is as strong as its weakest link... 

RE: .4

IMO, that is exactly the type of pervasive mentality that does not allow us to 
be able to achieve any significant growth. What is your alternative to .0?

RE: .0

You should get sick more often #;-). Great note.

	C'Ya,
	Wayne

    
    Has anyone considered setting up a new notes conference specially to
    talk about how to turn us around again?
    
    It seems that many good discussions get side tracked or lost amongst
    other topics.  It might be a good place to put process moans in and where
    we could analyse the problems.  If the VP's aren't going to improve
    things maybe it's time for people power.  If nothing else it might
    embarrass the VP's into improving things.
    
    Just a thought.
    
    Mike

    .8 - a question - what little thing in your own area could be done
         better to create more revenue or improve an existing system?   

	Better than just hiring a new marketing VP, hire a new marketing
	VP AND his/her full staff. One person cannot change the way
	marketing is done in this company

	We must learn to create demand. Restructuring our Alpha NT line
	won't help alot till we get advertising and marketing fixed.

							mike

    .9 - good points - 
    
    We as a corporation STILL need to get out of the stovepipe mentality
    and realize WE - yes WE are Digital.   I work with 3-4 other groups 
    and are constantly haggling or misunderstanding WHAT they do,
    what I do for them, etc...   Intergroup process maps that chart
    this and a discussion between WE groups who own processes need
    to be started corporation wide!
    
    Is it harder to get something done at Digital or the Federal
    Government?   
    
    IN 10 YEARS I HAVE NEVER BEEN ASKED HOW THE SYSTEMS I USE COULD BE
    IMPROVED!     TECHies - leave your EGO at the door ALOT OF 
    PEOPLE HAVE ALOT OF GOOD IDEAS BUT ARE NEVER HEARD!   MIDDLE 
    MANAGEMENT think about PROGRAMMER ANALYSIS WHO CAN HEAR IT 
    AND DESIGN IT ARE NEEDED. 
    
    	Processes/procedures/tasks - whatever IS THE PROBLEM.   Getting a job
    done as simple as possible to add maximum value needs to be addressed
    coporate-wide.   
    
    Call me wrong - but these are my observations from where I stand.  Do
    other people see similar issues is their areas?

   rep .4  So, you're saying that adding 1000 sales people will not
           generate a dime in revenue ? hmmmm.

           Or, perhaps we should just slash away another 20K
           employees to trim the cost of SG&A. Yeah, that's the
           ticket. We can put a spin on this and call it, say,
           down-sizing and no one will really notice. Cut our
           way to growth! Another VP in the making.

           :-(

    .14    rep .4  So, you're saying that adding 1000 sales people will not
    .14           generate a dime in revenue ? hmmmm.
    
    He didn't say that did he?    I read that this would 
    create a salary expense of ~ $65M
    
    Here is my one suggestion - have every manager in every group
    map processes and sit down with other groups and determine
    2 things that could be improved and implement this
    as simple as possible - revenue generating ops first. 
    
    This is not to be done top down but done at the lowest level.

I agree with CSC32::C_BENNETT in .13.  Our biggest problem is
BROKEN BUSINESS PROCESSES.  Having been in the field the last
several years, it appears to me that the part of the company
with the worst business process problems is the field.  The ideas
in .0 are great, but until you fix the business processes they
won't help one bit.

Digital must re-engineer its business process to be more
customer-focussed.  Remember, the revenue spigot is at the
customer.  Being in the field, I am close to such spigots,
and the processes needed to get the revenue flowing are
mind-boggling.

So I think we need a 1-point program:

	CUSTOMER-FOCUSED BUSINESS PROCESSES!!!

Ram

    Ken, the problem is marketing.  Not that we dont advertise or have
    enough sales people.  Marketing.  We don't do it right  because we're
    not structured as a marketing company.
    
    Marketing is equal to running the business.  Marketing says that
    you start by understanding the market deeply, segment it well,
    understand what people will buy and what our competitive advantage is.
    Then you build products that people will need and buy.  Then you price 
    them to maximize revenue.  Then you build you channels strategy to fit
    your product type, pricing model and customer segments.  
    
    Then you do what Digital thinks marketing is - advertise, promote,
    bundle products, etc.  
    
    A true marketing company has marketing people (who can be very
    competent engineers) in charge of making products and bringing them to
    market.  There's a pretty good one located in Redmond.  
    
    Don Randall
    

re: .8

	The problems I see from my grunt level cannot be fixed by just fixing 
problems in my own area (and believe me, I have enough opinions about my own 
area, Digital Services - OMS BU and my former area, CCS, to fill another notes 
conference.) 

	The problems I see result from a "culture" that is unwilling to take 
risks, riddled with internal politics and "tree hugging", and a general lack 
of a common, shared vision or long term strategy for growth. In the absence of 
a long term strategy and a common, SHARED vision, I have seen decisions made 
that may be in the best interest of a particular manager, group, or 
organization, but that are not in the best interests of Digital as a whole or 
in the long run. 

	We as a company, need to all be marching towards the same vision or 
else we, individually, will be marching our separate ways.... out the door.... 
either willingly or unwillingly. We have downsized and divested so much that 
our tollerable margin of error is much less than that of an IBM or an HP. IBM 
can screw up something as visible as the Olympics and not have the perceived 
value of their company (stock price) impacted much. HP can have squabbles with 
Intel about something as significant as the P7 and be able to put an 
acceptable spin on the situation. Digital does not have this luxury. We need a 
Digital that is more focused on growth than ever before and that focus and 
strategy must come from the top. If the top lacks ideas, then there are more 
than enough in this conference.

	C'Ya,
	Wayne




	

RE: .14 - Actually, I said we'd sell 1 million machines because we 
added sales people and we increased advertising.  Unfortunately, the added 
sales people cost us approximately $65M, and we cut our selling price (see .0) 
below our cost, therefore lowering our gross margins.

RE: .8 - I'd do what the Business Planning Committee is doing.  Understand all
of the investible segments of the business, and invest in those that have the 
strategic opportunity to grow and are aligned with the corporate strategy.

I'd value price where I could, and I'd competitively price where I had to.  
If I couldn't make the profit for less than the market was willing to pay for
it, I wouldn't make it.  I would invest in marketing (NOT necessarily
advertising) - and maybe discover the next HP Printer or Intel chip.

Unfortunately, we don't have endless pockets.  Digital needs to balance 
between those businesses that are going to grow and consume cash, and those
units which will generate cash to fund those strategic growing businesses.

And finally, I would continue to find smarter/better/hopefully cheaper ways to 
do things.  We spent approx. 23% of NOR on SG&A costs in FY96.  HP spends
around 20%.  That means we're NOT competitive.  Our competitors are delivering
9 - 11% Operating profit on a regular basis.  We were approaching 5%.  

Who are you going to bet your company on?  Your hard earned, disposable 
income that you're going to invest?  We need to win back the confidence of the 
customer community and the investment community.  A better mousetrap isn't the 
answer. A profitable, better mousetrap, with sustainable competitive advantage, 
and a market demand would be a good start.  

That's what Bob Palmer, Vin Mullarkey and the rest of the Executive Committee 
are trying to do.  Prove to the customer and investment communities that we have 
a strategy, we have product and services that the market is demanding, that we 
have sustainable competitive advantage, and that we can do all of this 
profitably, delivering a return to our investors.  Unfortunately, they 
can't stop the world and say "Hey, everybody else stand still while we implement 
everything we want to do so we can be 'Everything we want to be'".  You see 
competitors react.  When they react, we sometimes need to adjust the strategy.

    	$65K for a sales person seems a bit on the low side, btw.  There's
    considerable overhead on top of just salary (phone, that snazzy laptop,
    auto expense, T&E, and ugly stuff like payroll taxes, insurance,
    pension, etc).  Probably double your number.

Correct.  I said I was being conservative.  So for every $1K of salary you add,
double it to load for fringe, etc., and then add whatever you get direct to the
loss at the bottom.

    a whole week away. Ahhh... Joy.
    
    Far North of Ireland. Child entertained. Beautiful beach  (Euro Blue
    Flag for Christ's sake !). Food, Guinness. Irish Whiskey (note spelling).
    
    Hmm.. I'm sure we should 'ANNOUNCE' about now. Ahahh! I've found a
    Financial Times (pink thing, business related) in a small shop here.
    
    oohheerr. Big loss ('cos we ain't making money). Plus a big share
    buy-back ('cos we're making too much money). No... Too many Guinness ? 
    
    Hang on. ABU individual goaled bonus (FY96) hosed, 'cos we didn't make
    the $$. But the shareholder (who wasn't , as far as I know, told to
    work his/her arse (english spelling) off) gets a nice hand out, as we
    decide to reward his/her patience. And, as we seem to have 'confidence
    in the business'. yeah, right (as I've said in previous notes).
    
    I hope the SLT (phrase that was popular some time back..) have a
    reasonable view of their respective colons.
    
    Any one of them  that wishes to come meet with customers, drop me a
    mail; The recent self-imposed 'uncertainty' seems totally daft - if we
    are strong enough to buy back stock, why are we dumping staff ? Wall
    Street. You know it makes sense....
    
    Another Bushmills barman. Make that a (very) large one. I have to go
    back to work soon.
    

    The field organization and how we sell to corporate accounts is broken
    BIG TIME!
    
    My 2 cents:  The direct sales force - I don't even know what to call
    them any more since with all the re-orgs the names keep changing - must
    be incented to sell:
    
    o  Servers, both Alpha and Intel
    o  Workstations, both Alpha and Intel
    o  Services, both SI and MCS 
    o  Software
    o  Components and peripherals
    
    Basically, a direct sales representative from Digital Equipment Corp.
    should be able to discuss ANY product and ANY service to his/her
    customer.  The customer should interface to ONE individual, not a half
    dozen.
    
    Corporate customers, i.e. Fortune 500 types, don't buy Turbolasers as
    if they were buying commodity PC desktops.  These systems are generally
    a part of a TOTAL SOLUTION!  If you don't incent the direct sales force
    to sell a total solution, or MAKE IT EASY for a customer to buy a total
    solution from Digital, we will not have too many corporate accounts
    left!  Likewise, if a Digital sales rep has an opportunity to sell
    10,000 desktops he/she should be rewarded for that business.
    
    Right now, we expect SI and MCS to sell their own services; the PCBU is
    selling their product; Peripherals and Components (particularly
    Networks) sell their own product.  A corporate customer sees multiple
    people, without any consistency.  Many large corporations do not want
    to deal with channels, even for PCs or Intel based servers.  Are we
    just suppose to walk away from those accounts???
    
    IMAGINE BEING A CORPORATE CUSTOMER TRYING TO DO BUSINESS WITH DIGITAL! 
    
    With recent announcements, it should be obvious to anyone that business
    in Q1 and Q2 is going to go down the tubes.  These decisions are going
    to be disasterous, and should be reversed ASAP.
    
  
                                                    

    since I'm online...
    
    
    I spoke with a (succesful) reseller in the UK a week back.
    
    He gets paid 15% of the Gross Margin (to his company) of anything and
    everything he sells. Hardware, Software, Anything. And he just gets on
    with it. (and makes a stack for himself).
    
    The current 'debate' about what the 'ABU' guy gets paid on is just a
    joke. Mr Copperman, if you can't think this through, I suggest you come
    talk to someone who has (he owns a good UK reseller, and is laughing
    at you, and Digital, yet making a stack for himself too..)
    
    
    
    
    

    The points in .0 merit further inspection at a senior level.  There are
    attributes of the Go for Growth strategy outlined that could be
    accomplished. Point 2 speaks directly to product branding, that is as
    Jeff Moore would say from "Inside the Tornado" you are branding cattle
    on the front porch of the ranch with a hot iron.  And when they wear
    out or cool down we turn around to engineering and say, another hot
    iron please, to wit the response is sometimes "In a moment, we are
    working on the new font."  The font doesn't matter, all we are trying
    to do is brand every single cattle running buy (the customer) with the
    Alpha brand.  What size font or pitch (read Mhz and TPC) is irrelevant,
    it depends only on the size of the cow in front of you.  HP ships $100M
    of laser printers every FRIDAY.  That's $100,000,000 people.  And the
    orders come in on the telephone, internet or e-mail gateway.  Very
    little selling, lots and lots of fulfillment.  And they shove other
    things up the printer pipe to their channel partners, like HP Vectra
    PC's, components and peripherals and the occasional HP RISC box.  Hmmmm
    sounds like a strategy to me, leveraging the channel I think they call
    it.

    I'm in the field, and if anyone thinks we are implementing the "All
    channels strategy" here well I'm waiting for it to be shared with me
    from management.  Our direct sales force is history, gone.  We have
    tiered most of our direct VAR's to our distributors from a fulfillment
    viewpoint and will transition their contracts accordingly upon review
    of their business volumes.  No big numbers = no direct relationship
    with the mother ship.  

    Big customers, like MCI for example do huge business with us.  If we
    want more MCI's of the world than that involves heavy duty experts to
    work night and day developing the business, working the relationships
    in the accounts, managing the risk/rewards and driving profitable deals
    our way.  This takes real 110% focused talent and to expect our
    distributors and resellers to do this is both unrealistic and unfair. 
    
    They fulfill product in a territory.  They do not drive global high level
    strategic bet your business I.T. solutions into accounts.  We are
    absolutely beyond belief kidding ourselves if we think running all the
    business through the channel is going to be our savior.  Project
    business is complex, profitable and risky.  But you can make a good
    deal of money at it.  We used to do this, remember?  We were #4 once
    worldwide in SI engagements and revenue.  Where are we now?  Hardly
    ever mentioned in any trade press or from the lips of any customer I
    know about.  All you hear is the Big 6 and most of the time we are a
    sub to them for, you guessed it fulfillment.  We leave the really
    profitable orange way up on the tree for them to eat and we catch the
    juice dribbling off their chins.  No wonder were hungry.

    So, I agree the processes in the field, well putting it kindly SUCK.  I
    mean really really SUCK.  And we do not think team out here.  Why,
    cause we are not goaled, rewarded, and praised as one.  Hell, we are
    not even paid as one.  Line up the metrics, line up the pay and you'll
    get all the winning behavior you want.  Teamwork is key and we aren't
    being a team right now, for all the wrong reasons.  Perhaps if we start
    something simple like .0 implies we could have a winning combination. 
    Bob's strategy is there but we have not coalesced around his vision. 
    We have not all embraced it, internalized it, sold it, marketed it,
    advertised it to our customers.  And worst of all, we have totally
    wasted our competitive advantage in the marketplace and now every
    company is racing right on our heals with their 64-bit offerings.  It's
    like werewolves at the door.  I have friends at HP who say to me that
    we should be mopping up in the market with the product set we have.  We
    should without a doubt own the UNIX market with our Alpha systems and
    Digital UNIX.  We should own the workstation market versus SUN and SGI
    with our performance and leading applications in that space.  We should
    own network integration, hell we invented the concept of distributed
    computing for Lords sake.  And we should be the ones our customers call
    first when they have a problem they want to talk about solving.  

    The high ground is still there.  There's more money to be made than
    ever.  Teamwork, shared vision, simple and easy to understand metrics
    and goals, shared responsibility and rewards, accountability for your
    actions and an executable game plan that fits on a 3x5 index card in
    all our pockets (free idea here Mr. Marketing) to look at, give
    imprompt to talks off of to our customers is where we have to be.

    I'd like to hear some feedback from upstairs about some of the points
    .0 has to offer.  They are radical, they are different, they may even
    be painful, but hey I've been pounding my big thumb with the hammer for
    so long it's gotta' start feeling good soon when I stop.

    Mav

    A few points.
    
    1. Yes we move about 65% of our product through channels.  This is
    fine.  But what is not being seen is that for every sale we make
    through channels we've missed many others.  Only a larger direct sales
    force can fix this - or a totally revamped marketing organization.  We
    must have either effective demand pull  (marketing), or push (sales). 
    We have neither.
    
    2. I believe that the vast majority of individuals at Digital are doing
    everything they can.  Perfect? no.  Still some more fat?  sure.  But
    the problem now lies at the top.  We have survived largely on the skill
    and hard work of our individual contributors, but we can not turn the
    company - only upper management.
    
    3.  I am NOT suggesting selling machines as a loss.  I am suggesting
    reducing our margins - make less per machine and sell more machines. 
    Our margins on Alphas are in the lower 30% (I believe, I'm sure I'll be
    corrected...)  Cut those to PC level margins. Easy?  No.  I didn't say
    this would be easy.
    
    4. A good sales rep will generate $5 Million to $10 million per year in
    sales if sufficiently motivated (less if we motivate with the existing
    incentive programs).  So what if she/he costs $100K or $200K per year? 
    A 20% margin on $5 Million is, lessee, $1 Million.  This is an
    investment that pays.  Or how about this - 1000 sales reps times $300K
    per year equals $300 Million - forget about the stock buy back program!
    1000 is an arbitrary number, but you have to start somewhere.
    
    5. Fixing business processes is not a strategy.  It's a Dilbert joke. 
    Naming each broken system, identifying a person to fix it, assigning a
    budget and a plan with dates are the tactical steps needed to turn
    around the company.  There are very many of these things wrong with
    Digital - but if we were selling like we should be we'd have resources
    to fix these. 
    
    6. Want something else to do with $300 Million? Invest it in advanced
    research in high speed I/O busses and memory access schemes - these are
    what's needed to take better advantage of Alpha.
    
    7. I've seen marketing plans in this company.  They are not plans -
    they are lists of objectives and no details on how to get there.  This
    has to be fixed.
    
    I'm glad I've stirred up discussion!
    
    Ken

    
    	What is the status of the SAP/R3 implementation that was heralded
    as the magic bullet to resolve our internal business systems/processes?
    I have seen hints that it is floundering and has cost up to $500m. I
    saw a presentation a year or so ago that indicated full implementation
    within 18-24 months. Are the folks in the field seeing any benefit from
    this effort at this time??
    
    Signed, anxious stockhoder (rick)
    

    The Base noter seems a little JR on channels capability. The world has
    changed since the "good ole days" when direct sales reps ran down the
    office hallway with a direct $2.8M. Many of those customers are now
    buying solutions through LOCAL partners. These partners are
    $50-200 million VARs selling  HP,DEC, COMPAQ and IBM mid range
    solution. Their reps are mostly x-HP,IBM and DEC reps!
    
    Our challange should be to work closely with these companies and to
    LEVERAGE their installed base! Our goal should be to place x-Digital
    people into these companies and to help then get them promoted to
    positions of influence.  Unfortunately we have many reps in the field
    with no idea on how to do this. Many of them only know the
    direct selling model. They think that leaving Digital and ending up 
    working for a VAR is a step down in their career. HP and IBM are much
    smarter in this marketing strategy. 
    
    I say stay with the in-direct plan but get with the times and deploy
    channels oriented people to do a channels job..
    
    King-RAD
                              
    
    		
    
    
    
   
    

re: .26

>    And we do not think team out here.  Why,
>    cause we are not goaled, rewarded, and praised as one.  Hell, we are
>    not even paid as one.  Line up the metrics, line up the pay and you'll
>    get all the winning behavior you want.  Teamwork is key and we aren't
>    being a team right now, for all the wrong reasons.

It seems suspiciously like the Business Unit stovepipes (that have resulted
in multiple sales forces running around) were in part put in place to allow
the sell-off of various businesses, to improve our cash position in the short
(sometimes VERY short) term.  Can you grow with an organization structure
that was really put in place to shrink things?

Probably you can--with motivated and talented individuals who are willing to
break rules for the good of the business.  With that kind of person working
for you, you can make almost any organization structure work.  But right now
we seem to have lost a lot of talent, seen motivation/morale take a nosedive,
and have a situation where not many people want to indulge in risky behavior
(like breaking rules).  So maybe trying to fix the organization structure
is the best that you can hope for from management.

We need to have an organization focused "outside-in" from the customer's
perspective, not "inside-out" where we foist our internal problems onto
the customer.  We need to put a stake in the ground and decide what markets
we want to be in, what segments we're targeting our products toward, a 5
year plan that we try to stick with that takes into account the $$$ in each
segment and the percentage that we hope to capture in year 1, 2, 3, 4, 5.
And put a staffing plan in place appropriate to the targets.  Not "stop
layoffs"--if we're really aiming at markets that will only support a 35000
person company, then obviously we have to do the sell-offs and layoffs to
adjust to that.

But let's be up front about that and know what the goals are that we're
willing to "bet the business" on, so the measures we have to take come
as no surprise.  Bob says we want to be in high performance UNIX servers
and Internet solutions--OK: if i hear that, i don't want to hear that we're
laying off the people that do those...i'd rather see them "outsource" MIS,
Finance and Personnel to companies specializing in those things than see
us cut people in what are supposed to be our "core" businesses.

Bob says we have a strategy.  But do we have a plan?  One that goes more
than 3 quarters out and that our executives are willing to fall on their
own swords and die for?  Waiting and hoping for some business to catch fire
is not a plan for growth, but rather a prescription for more dithering and
sudden spasms of reactive cost reduction.  Somebody has to take the bull
by the horns and say, "This is where we see ourselves going, these are the
milestones we have to hit, we'll have to cut [or add] X thousand people,
and we're not going to go off-track from this plan!  No more monthly reorgs!
No more layoffs coming out of nowhere!  This is IT!"

Of course, to be able to do this, we need to be able to do Marketing as ONE
company, not as 7 potentially disposable sub-units...

- paul

    
    	OK, here's a question for all of you -
    
    How many people do we have (those getting Digital paychecks) right now
    that are actively out selling *Digital* products and services?  That
    should be a real interesting ratio.
    
    	Leo

    The latest change in the rules for DECathlon (10% of the field sales
    force rather than 10% of those who make their DEC 100) is expected to
    mean 500 bodies from sales will be winners in FY97. That puts the sales
    headcount at 5000-ish wordwide but that includes sales managers and
    partner managers as well as the "direct" sales force.
    
    What is more relevant is how many motivated sales people are out there
    TODAY.
    
    Previous noters have commented on the stupidity of the new goaling,
    comments which I endorse wholeheartedly. I work in sales in a global
    account where we have been very successful over the last 3 years. We
    have worked with the PCBU and MCS together with our colleagues in the
    workstation sales team in the UK and together as a TEAM we have grown
    our business profitably. Our goals last year supported that activity.
    
    Seems that the organisation does not want us to do that any more.
    However our customers DO. So we will. And then we will wait for the
    next reorganisation when it is realised that they got it wrong this
    time. Better not be too long or the business will have disappeared
    totally.
    

    I agree completely that we need a strong channels and partners
    strategy.  What I'm concerned about is what we're doing to the
    corporate accounts that we still have.
    
    o  Try to get a PCBU rep to go on a call with you, let alone work an
       opportunity you've uncovered.  But don't hold your breath!
    
    o  How are we going to sell SOLUTIONS to these accounts???  If the
       ABU/SBU rep is not goaled or incented to sell services, guess what -
       IT ISN'T GOING TO GET SOLD!!!  So, now we have the SI organization
       off building their own sales force to match the sales force that we
       already have to sell Alpha boxes, to match the sales force we have
       to sell MCS services, to match the sales force to sell network gear,
       to match the sales force we have to sell Peripherals and Components.
    
       To a channels customer, this may make perfect sense.  But to a
       Corporate customer it looks insane!!!
    
       The other day I saw Nat Hannon in one of our conference rooms
       speaking to a group of sales reps, no doubt about "Value Selling."
       I could just hear him, "... you must demonstrate to your customer
       how you can add value to his/her business...."  Well, it ain't gonna
       happen with this organization!
    
    I have witnessed things over the past several months that make little
    sense to me.  For example, a sales rep, from one of the business units
    discussing an opportunity to sell product along with a service
    component, stated that while Digital's MCS could probably deliver the
    service, HE would prefer to go outside and partner with a socalled
    solutions provider.
    
    I'm sorry, but this is wrong, wrong, wrong!!!  
    
    Channels are important to pump up product volume.  But we need to
    rethink how we are going to sell to and support our corporate accounts. 
    
    Maybe I don't get it - maybe we don't want corporate accounts anymore. 
    Maybe they are not worth the effort.  It seems that is what the
    thinking is of our management.

Here's a plan for a layoff that might RAISE morale.  I once worked for Raytheon
when they did the following:  A layoff was announced that said that $X of salary
was going to be cut out of the division, but individual contributors and first
level supervisors/managers were EXCLUDED from participation in the layoff - only
middle and upper managers would be affected.  Note that the cutting was done on
an EXPENSE level and NOT on a HEADCOUNT level - the more a manager made, the
greater the contribution of his layoff to the $X salary reduction goal.  A few
months after this layoff, almost everyone agreed that not only had there had
been no negative impact on producivity, but that it seemed like it was easier to
get thing done since the management reporting lines had been clarified and there
were fewer approvals required to get things done.  

Jim

    Neat idea. Focuses the mind on reducing expense rather than reducing
    headcount. How on earth did they manage to do that, I wonder ?

    	CCS (the people who run the internal systems and networks) has been
    doing this for the last 3 years or so, our management has been
    successful in driving down costs and then justifying the calls for
    headcount reduction by saying "We've already reduced expenses by $XX".
    
    	We also haven't replaced many people who have gone via attrition.

     re: 4753.33
    
    Once again sales support is ignored.  As they are for DECathalon,
    but that's another topic all together
    
    Add another 100 or so to the 5000-ish.  Contrary to what corporate
    thinks, sales support people SELL on a daily basis.
    
    Sharon

    re .38 & .33
    
    This is something else that is broken in the field.  Our senior
    management have no idea what sales support is all about, at least that
    is what their actions indicate.  It wasn't too long ago that sales
    support did a vast majority of the things now performed by the various
    business unit sales forces.  We used to:
    
    o Support Networks gear, peripherals and components
    o Identify, pursure, and nurture consulting opportunities; many of us
      also became members of the project delivery team
    o Support core systems (i.e. VMS and UNIX)
    o We did RFPs, RFIs, white papers, etc., etc., etc.
    o We worked directly with the customer, sales, and consulting to
      develop solutions.
    o In many cases we filled a void to solve customer problems when the
      hotline couldn't and/or field service wasn't available 
    
    I could go on.  Now, we've got multiple sales forces all to accomplish
    the same thing, in a completely disjointed organization.  Senior
    management says sales support is SG&A overhead.
    
    ???
    
    Does this make sense to anyone?  Isn't something wrong with this
    picture?  There are god knows how many people trying to accomplish what
    sales support used to do by themselves - AND SOME HOW THIS IS SUPPOSED
    TO BE MORE EFFICIENT???
    
    Does the word SUBOPTIMIZATION mean anything to our management?  Is
    anyone familiar with the Law of Diminishing Returns concept???
    
    The bottom line is if YOU were a Fortune 500-to-100 company, how do you
    want to do business with your vendors?  That is the only question that
    should drive how we organize ourselves to sell to and support these
    customers.  Value added selling or Solutions Selling are empty words
    and meaningless if we don't have the organization to deliver it.

    Re: .0
    
    >2. Adjust Alpha models and pricing.  There are too many variations.
    >Cut down to 3 workstations (top 3 Mhz, 300, 333 and 400, two mini
    >towers and one low profile).  This will save manufacturing costs, and
    >if we move ahead with this strategy cut R&D costs as well.  There is no
    >point in producing "low end" alphas - Alphas exist to be fast.  Period.
    
    While I think we may have too many different platforms, these 'top'
    clock rate numbers were the 'top' numbers a couple of months ago.
    Resellers are already shipping 433Mhz systems (not overclocked,
    either).  One problem here is that the cpus are a moving (upwards)
    target, in terms of clock rate.  Another problem, I think, is that
    there is a significant lag between the time that the chips are readily
    available at a particular clock rate, and the time when workstations
    from the SBU become available.
    
    From my observations, there also seems to be a mindset problem
    someplace about system building and pricing, at least on the
    desktop.  In this [presumably volume desktop] business, you
    HAVE to be prepared to have new systems come out every 6-9 months
    which are faster and cheaper than the prior generation.
    Artificially protecting the margins on a particular design by
    shipping systems which are barely (10%) faster than the competition
    keeps us in this annoying chicken-and-egg marketshare/software
    availability cycle, which, in turn, keeps our revenues small.
    It's called FAILURE TO EXPLOIT A COMPETITIVE ADVANTAGE.
    It gets generals sacked during wars, but unfortunately, it
    doesn't seem to apply very often to our 200+ VPs.
    

Re: .27
Author: DECWET::BERKUN "A False Sense of Well-Being"

>    5. Fixing business processes is not a strategy.  It's a Dilbert joke. 
>    Naming each broken system, identifying a person to fix it, assigning a
>    budget and a plan with dates are the tactical steps needed to turn
>    around the company.  There are very many of these things wrong with
>    Digital - but if we were selling like we should be we'd have resources
>    to fix these. 

The broken business processes have existed for at least 6 years while
many strategies have come and gone.

Ken, you are right: fixing business processes is not a strategy. But not
fixing them, when they are in such a desparate state, ensures that there
is NO FURTHER NEED FOR STRATEGY.  The corporation ceases to exist.

Ram

I agree with Ken on his Three Point Plan for Growth

1. Hiring back former Sales and Sale Support people.

This will fill in the void that was created when Digital dropped
thousands and thousands of revenue producing customers -- OH! I mean
turned over to "distributors".  This is not meant to "knock"
distributors, VARs and re-sellers, they were simply caught off guard and
were not geared up to take on this major role. 

For example: a typical sales unit that in the past brought in $20+
Million with 7 Sales Reps and 3 Sales Support was turned over to THREE
distributors (one Sales Rep per distributor with little or no sales
support).  These Sales Reps were only given $2 - $3 Million budgets,
which they could easily make by going after the low-hanging-fruit.  You 
can easily figure out where the remaining revenue went!


2. Adjust Alpha models and pricing.  

I don't think that we have too many variations.  What I find ludicrous
is trying to articulate and quote a System for a customer/ Digital
Business Partner without going through a myriade of "hoops" and B.S. 
One can only imagine the problems that our distributors and channel
partners are going through on the "outside" trying to order what the
customer wants!  Is this why they walk away from complicated sales?? 

With all of Digital's inovations in Manufacturing and R&D, we should be 
able to produce AlphaServers and AlphaWorkstations that are simple 
"plug-'n-play" on the assembly line.  Then fix the ordering process to 
move the configuration from the customer's P.O. to the shipping dock in 
hours rather than weeks.  This would make us a leading edge manufacturer 
and supplier.

    
3. Advertise.  

Ken has an important point here regarding our generic name: Digital.  I don't 
know how it is at your facility but we still get a number of telephone 
calls asking if we sell and service digital pagers, digital time clocks, 
etc. Once we even had a call from a person wanting us to dig a trench --- 
because he thought we were the DIG-IT-ALL Company!


Sorry Mr. Palmer, but every day people refer to us as DEC (not Digital). 
From our stock symbol to our multitude of products, we will always be 
known as DEC.  ADVERTISE, use this momentum.... get DEC back on people's 
tongues; get them excited about Digital Equipment Corporation.

Five years ago we had the world by the tail when we ramped up Alpha
sales, we didn't take advantage of that opportunity through advertising
and marketing.  Now the window is almost closed because the industry
rags are now reporting about HP's 64-bit architecture and nary a mention
that Digital has been in this arena for over 6 years..... 


I too believe that Bob Palmer is working to save the company.  However, 
I am concerned that the issues and problems that we are experiencing in 
the field are NOT being reported to him.  Too many Senior Managers are 
"filtering" the messages and the truth is lost.  (Old saying: Too Many 
Cooks Spoil the Soup.)

And finally, please review the TFSOism attitude within this
organization.  It is unfortunate but I have observed that 3/5's of
ex-Digital employees have hurt us far more that helped us.  Several
former employees have actually had Digital systems replaced with H-P or
IBM systems at their new place of employment.  Others have worked to
cancel long standing service agreements, some have steered consulting
engagements away from Digital.  Any in many cases, we find a sales cycle
is far more difficult with a former Digital employee in the
negotiations.    It IS sad but true. 


As mentioned by previous noters, we need to work together from the Field 
to Corporate Offices, open lines of communication, and build a common 
set of goals and messages that ALL OF US CAN ARTICULATE.

Regards,

Cloyce

OBTW: Who is involved in selling Digital Solutions?  
      EVERYONE THAT WORKS FOR DIGITAL (NYSE:DEC)!
    

    From one of my favorite ads on TV....

    Behold the turtle....He only makes progress by sticking his neck out!

    I agree with at least two points of the Three Point Plan for Growth

    1) Hire back some of the Sales and Sales Support people.

    Unless you are are a commodity computer business, like Gateway 2000,
    you cannot sell computers effectively without having your face in front
    of the customer.  This week our ONE-AND-ONLY sales person resigned! 
    You can't keep your current customers with this level of sales effort,
    let alone grow the business.

    I don't get it, where is the risk?  You rehire some of the known good
    performers and task them with bringing in $x million dollars in
    revenue/and or margin.  If they don't perform they are outta here.  If
    they do perform, you have recovered their salaries may times over.
    And reward them well for over achieving.  Give them credit for EVERTHING
    that they sell and provide them with technical support so that we can
    put our best foot forward in front of the customer. 

    Maybe channels are the right way to go down the road, but don't get rid
    of direct sales UNITL YOU SEE THAT THE CHANNELS STRATEGY IS WORKING!


    2) Value customer satisfaction above all else.

    For example, before announce anything, think about how the announcement
    will be perceived by customers.

    From the trenches, it looks like we have one eye on the ledger and the
    other eye on Wall Street.  And guess what, OUR FOCUS SHOULD BE ON THE
    CUSTOMER!.  A blast from the past....

    	a) We are discontinuing our Starion line of PCs.
    	-or-
        b) We are getting out of the consumer PC business.

    Wall Street might like b) better, but a) would be much better in terms
    of customer confidence.

    IT WON'T MATTER WHAT WALL STREET THINKS OF YOUR COMPANY, IF YOU DON'T
    HAVE ANY CUSTOMERS LEFT!

    As an exercise, consider the following events.  First ask yourself how
    Wall Street would react.  Then ask yourself about the effect on
    customer confidence.

    	1) Digital lays off 1/2 of workforce
    	2) Digital sells off numerous "non-core" businesses.
    	3) Digital gets out of consumer PC market
    	4) Digital focuses on top 1000 accounts

    See what I mean?  We seem to have done OK with Wall Street, but what
    price have we paid in customer confidence?

    We have the best product set we have ever had!  Now if we would just
    focus on Sales and Customer Satisfaction, we would have a winning
    combination!

    3) Advertising

    Engineering has done a FANTASTIC job with our product lines.  But we
    are deluding ourselves if we believe that our customers will buy our
    products because they are 20% (pick a number) faster than HP's.  There
    are a number of factors that the customer takes into account:

    	o performance
    	o price
    	o service
    	o confidence in the Company (mind share)
    	o support
    	o delivery
    	o quality

    IMHO we are losing mind share at an alarming rate and one way to
    communicate a positive image of Digital is through innovative, quality,
    advertising.  Much smaller companies than Digital have come up with
    much better advertising, so don't tell me that we can't afford it.
    For instance, the Apple ads with the PowerBook and Independence Day
    footage are quite good.  Apple seems to be making the most of their
    advertising dollars in tough times.

    Lots of people have commented on service and support, so I will just
    say that we probably need to reinvest in those areas.

    Sorry for the SHOUTING, but this is getting very frustrating!

    Maybe I could have saved all of this chatter by just pointing out the
    obvious --

    	It's the customer, stupid!

    Paul B.
    

	Advertizing.... I was taking the Mass Pike home and the Digital logo
caught my eye on a Billboard. It was a quick look (as I wasn't expecting it)
and it had a laptop and some envelopes.... gee... I wonder what they were
advertizing? :-)

	But I was surprised that they had an ad on a billboard.


Glen

    Re: .44
    
    I drove in to Logan airport twice over the last couple of weeks, once
    to bring my son it, the second time to pick him up. Driving him in, at
    around 2:30 p.m., I recognized the logo, and proudly pointed it out to
    my son. His comment: gee, the lettering is so small, I can barely read
    what it says. On the way back in to pick him up, at around 7:15 p.m., I
    pointed the ad to my wife, her observation was similar. Due the time of
    day we were driving on the 'Pike, we were doing around 60 mph.
    
    Question: it was nice to see Digital advertising its notebooks, but I'm
    really curious why the print would be so small. Is the print designed
    to be read during rush hour traffic? I.E., you could probably read what
    the ad said if you were stopped.
    
    Next time I'll bring binoculars! :-)
    
    kjg
    

    re: .42 DEC vs. DIGITAL
    
    Last week I turned the page in the Dallas Morning News and saw a half
    page ad for "DIGITAL PCS".  I thought, "WOW! We bought a half page ad
    in the front section of the paper!".  Then I saw it was sponsored by
    AT&T and wondered how we managed that.  Then I discovered the ad was
    for "digital PCS".  It turns out that Dallas is one of the first
    markets in the U.S. to get digital cellular phone service and that's
    why AT&T ran the ad.  BTW, PCS stands for something like Personal
    Communications Services, as this phone can do things like alpha-numeric
    paging, Caller Id, etc.
    
    So much for brand recognition:-(
    
    Bob

    Application Development Trends August 1996 pg. 22 has the following:
    
       				NewsADvisor
        In the News...				    A/D Trends say...
        --------------                              -----------------
    Digital to cut 7,000 workers,		Maybe abandoning most of its
    sees executives resign...                   software business wasn't such
    						a good idea.
    
    I agree.

    re: .47
    
    Maybe selling solutions was the way to go... 
    
    Hardware  Good...
    Software  Baaad...
    two legs  beeetterr...
    
    JMHO
    
    John W.
    

    Anyone see Digital News & Review's Newsline pg. 22:
    
    Samsung to make Alpha microprocessors
    .
    .
    .
     The Alpha systems are experiencing increasing popularity.  To date,
     Alpha product hav totaled almost $9 million in sales.
    .
    .
    
    Does this number seem low?  Alpha's been available now for about 4
    years.  I'd thought we'd have sold more than this.  Didn't we sell more
    than 1000 8000 class systems?  If they went for about $150,000 each we
    should have more than that?  On the annoucement of the AlphaServer 4100
    there were suppose to be 750 orders.  I assume they sold for about
    $50,000 on average, which means about $37,500,000.  Marketing should
    send them an update.

    
    Samsung will make CPUs.  They won't make systems.  For them the
    relevant number is the value of the CPU alone.  
    
    Judging an operation by the value of the business it leverages is bad
    accounting and bad business.  If we hadn't made the decision to use
    Alpha, systems would have another CPU in them.  We'd still have a
    systems business, but no Alpha business.
    
    Five years ago evereyone counted their leveraged business.  The sum of
    all our operations plans greatly exceeded total corporate sales.  We
    had NO accountability.  The budget process was a silly waste of time.
    
    I hope Digital Semiconductor is not justifying itself by the business
    it leverages.  We may need to manage the Alpha CPU design process, but
    we do not need to own a silicon foundry.  When will Digital
    Semiconductor be profitable based on the products it produces?
    
    
    
    
    plans exceeded tot

    The Plan of Record for Digital Semiconductor is to Break-Even Q4FY97
    and be profitable in FY98.

	re: .49

		"B"illion, not "M"illion!

    Maybe someone in PR should send them a note as the article CLEARLY
    states "$9 million in sales."
    
    I'd be more encouraged if I saw that number in print.
    
    	Regards,
    

    To further make my point, take a look at our just announced tpc-c
    numbers:
    
                                            tpmC      $/tpmC
        AlphaServer 5/400 4CPU RDB/VMS      7667.88   178
        Compaq P6/166 4CPU Sybase/Unixware  6184.90   111
        AlphaServer 5/400 4CPU Oracle/DUNIX 6056.04   223
        Prioris ZX 6166 4CPU SQLsvr/NT      5740      116
                                                               
    
    What's wrong with this picture?  How about 25% more performance for 60% 
    more money.
    
    When are we going to learn?
    
    Ken B.

        RE: .-1
        
        	If you look at the raw numbers those are the percentages
        (I'll assume your math is correct). This is where sales comes in.
        The system that is quoted has signficatly better reliablity and
        availability than the P6 based system. I don't think any customer
        in their right mind would try to do this sort of a load on a real
        world system. But how would you connect a real world version of
        this? VMSclusters? A couple of smaller Alpha boxes in a cluster
        would do the job, and add availability to the equation. 
        
        	Thats the problem with some of the new benchmarks they
        forget about availablity, or sustained performance. How long did
        the P6 system run before it blew up? How long did the OpenVMS or
        Digital Unix system run at that rate before blowing up? 
        
        	That might be a nice number to add for ourselves or to get
        the tpc to adopt. I think a sustained for x hours where x = 8 or
        more is needed. Maybe 24, 48 or 24x365 would be nice.
        
        

Don't forget that the $/tpmC includes server, clients, software, network gear
and 5-year maintenance.  Please don't automatically conclude that the servers
are much more expensive.  If you would like to see the full breakdown, you
can download 2-page summaries (including price sheets) from www.tpc.org.

                                            tpmC      $/tpmC
        AlphaServer 5/400 4CPU RDB/VMS      7667.88   178
        Compaq P6/166 4CPU Sybase/Unixware  6184.90   111
        AlphaServer 5/400 4CPU Oracle/DUNIX 6056.04   223
        Prioris ZX 6166 4CPU SQLsvr/NT      5740      116
                                                               
Here's the rest of the picture (though I may be missing some of the newest
releases).

        HP 9000 K420                                  4939 tpmC @$232/tpmC
        NCR WorldMark 5100S                           5607 tpmC @$394/tpmC
        IBM RS 6000 Model J30                         3631 tpmC @$289/tpmC
        SGI ChallengeXL                               6323 tpmC @$479/tpmC
        SNI RM600 Model 620                           6269 tpmC @$473/tpmC
        SUN SPARCcenter3000E                          6662 tpmC @152/tpmC
        SUN SPARCcenter2000E                          6444 tpmC @200/tpmC
        SUN SPARCcenter2000E                          5124 tpmC @323/tpmC

Ruth Morgenstein
CSD Performance Group

    If you don't think that customers are running large mission critical
    databases on P6 servers - think again.  They are doing absolutely that.
    
    Our costs for the rest of the benchmark outside the server are roughly
    in line with Compaq's.
    
    Yes, we must sell our advantages - but our advantages do NOT run to 60%
    greater price.  Our actual dollar to dollar costs of Alphas v. Compaqs
    is WORSE than 60%, more like 2 to 1 or worse.  We pulled a lot of
    tricks on the tpc test.
    
    Yes, we are the ONLY NT system that scales beyond P6, but that's not
    enough to win us enough new business.
    
    In fact our high margin strategy is NOT WORKING! If it were working we
    would not be losing money.
    
    It is time to re-think.
    
    Ken