Conference 7.286::digital

re Note 1453.0 "Report on KO speech at the Mill":

> Ken stated Digital is in three businesses:
> 1. Systems Integration - which is worth billions in huge contracts, but 
> somehow we keep losing large amounts of money here.
> 2. The VAX business
> 3. Commodity business - Many of us (storage, PC's, etc) are in the 
> commodity business. There are 3 things that are important to be in this 
> business: 1. Price 2. Price 3. Price 

        So where do software products fit into the above categories?

        I've heard it said (but yet to be convinced) that "Digital is
        a software company."

        Bob

    
    An interesting piece of this speech, for me, is the story of 
    the Maynard businessman - I know Ken has used this
    story quite often. The business was the old Firestone
    store, and the man who ran it is my uncle. I'll 
    have let him know he's still a legend in Ken's mind. He
    was an excellent businessman too! Has more *common sense*
    than the combined minds of 100 managers working here today. 
    

    
    Is the official speech report penned down(filed)somewhere?
    Can someone place it inhere?
    Or does this conference have a special topic where all of Ken's
    speeches are put in?
    
    thx.
    Jan.

    Does this mean we're not in the UNIX business after all ?
    
    Ian
    

    "Commodity" is a code word that lets everyone know that Ken Olsen still
    deprecates UNIX and DOS.
    
    It's true, but the conscious decision to make it the critical theme of
    "what business is Digital in", is a statement to employees, that we
    approach the UNIX and DOS market holding our nose closed.

RE: .0

>It's an event that Ken has been doing for some time, 
>where 100 +/- managers are invited to lunch and then Ken is the after 
>dinner speaker for about an hour.

Now that's what I call a long lunch.

--PSW

    re: .5   "...'commodity' is a code word that lets everyone know Ken
    depreciates UNIX & DOS"???????
    
    Possibly, but having heard him at Net U recently, it does not EQUATE
    with depreiciation to me.  I work this stuff - UNIX & DOS daily and
    have been associated with it since '84 and there is no doubt that it is
    EXACTLY a comoddity! SO are lots of things we sell in the network space
    and we make some of the best and don't depreciate them just due to
    their commodity nature. Terminals, printers, DEC pc's, workstations;
    there are many commodity items that DEC employees take pride in and
    persue. Commodity does not equate to devalued product.

    Perception is reality here.
    
    When customers are looking for the best vendors of UNIX and DOS
    solutions, Mr. Olsen's description of Digital being in the "VAX
    business and the commodity business" doesn't sound like enthusiasm to
    them for UNIX and DOS.

    	I'll believe Digital is in the commodity business when I see a
    decent ad campaign on T.V. like EVERYONE ELSE in the industry has. This
    company is practically invisible to most of the U.S. and the world.
    That will need to change to become viable in the commodity business.
    Even DG does a better job at this than we do.

I'll believe that we are in the commodity business, when you can ring up, Say
what you want in simple english, pay with your credit card, (without blowing
it's limit) and see the equipment on your doorstep, the next morning.

It works for apple et al.

q

    re .9
    
    So does U.S. business (I assume you're talking about the US)
    really buy its computer systems based on what it saw on
    TV last night?
    
    Gaack.
    

Not necessarily, but name recognition plays a role.  Kind of analogous to the
first impression you get at an interview.  IMHO this is universal.

If you pique their curiosity they'll want more.  I always recall those Beatrice
ads which ran a few years ago in the US.  They we're even specific to a product
just seemed to be building name recognition for a huge company which most
people had never heard of.

I wonder how many random people out of 100 (outside of MA) have even heard of
DEC.  I bet it would be somewhere in the 10-20 range.  I'm from a small town
in PA and I know not many people there know about DEC.

EVERYBODY knows about IBM.  The name is almost synonymous with computers like
Kleenex is with facial tissues.  That's got to be worth something!

-steve

re: .12,

> I wonder how many random people out of 100 (outside of MA) have even heard of
> DEC.  I bet it would be somewhere in the 10-20 range.  I'm from a small town
> in PA and I know not many people there know about DEC.
>
> EVERYBODY knows about IBM.  The name is almost synonymous with computers like
> Kleenex is with facial tissues.  That's got to be worth something!

    	I've been saying the same thing for years, but few of the DEC 
    employees from Massachusetts seem to believe me.  Those who do are
    quick to point out that the peon in such a survey doesn't normally
    buy a [DEC] computer.  No kidding!  I wonder why...?!

    	No need to advertise.  DEC's ivory tower reputation is quite well
    established in the golf and yachting clubs across the world where the
    "qualified" DEC customers frequent.  No need to expend needless energy
    spreading the word about DEC in any other, less qualified circles.

    	Apparently nobody has figured out that "word of mouth" (which is
    what we seem to bet our business on) emanating from Massachusetts
    is mysteriously muted once it crosses the Hudson River going west
    (IBM territory).  The world market is quite another ball game.

    				    -davo

    Advertising buys you recognition and news value. That then helps to
    generate its own momentum.
    
    The other day when IBM dropped its workstation prices by up to 50%,
    that actually made the news here. No one considered that IBM is nowhere
    near the biggest player IN THAT MARKET. Its name guaranteed
    recognition. That is major advertising that they didnt have to pay for,
    in a forum that people believe has integrity. That is a confidence
    booster for anyone venturing into a systems purchase or shifting away
    from current computing strategies.
    
    When it comes to cold selling systems or getting customers to come to
    us (let's face it, we dont have the ability to go to them or know all
    potential customers), promoting your brand name and making sure the
    general populace knows what you do is important. If you are going to
    have resellers, its easier for them when the decision is between a
    brand name and some other product. Its not just the techno-weeny that
    makes the purchasing decision these days. The less informed rely on
    things like name recognition to make their decision a little more risk
    free. The acceptance of a secretary when a new box is placed in front
    of he or she may determine if more are purchased. Name recognition can
    ease that acceptance and make the transition easier. It may ease the
    cost of efforts to transition the change to new equipment if the
    product has a good reputation. How many times have we had the situation
    of the formally all blue shop, where people refused to take on the new
    DEC equipment cos they had no knowledge or confidence in it? 
    
    When a company advertises on the football or takes full page adds
    promoting themselves, it is a confidence builder for any potential
    purchaser, and make no mistake, some of the people who sink beers
    with their pals at the football run growing companies during the week,
    do their billing and lead management on computers... they want
    assurances from anybody that the sharp guy in the pin-striped suit they
    are talking to isnt gonna do their business in.
    
    John

re: .14,

>    Advertising buys you recognition and news value. That then helps to
>    generate its own momentum.

    	I agree with all of your points, and would even go so far as to
    claim that the effects of advertising extend far deeper into the psyche
    of the market than anyone yet realizes.  Not only does advertising play
    an important role in the establishment of brand names and the announcement
    of marketing events, it can also serve to provide symbols of corporate
    identity and pride for both customers as well as even *employees*.  If
    successfully implemented, advertising can not only serve to boost sales,
    but it can also have an emmensely important impact on employee morale.

    	It is for the above reasons that I strongly disagree with the
    sentiments expressed in the replies to note #949 (the write-locked
    advertising note) as I feel that while the discussion about the specifics
    of a given advertising campaign might be better suited for the MARKETING
    notesfile, that the overall concepts behind advertising, as well as the
    effects and perceptions of advertising on DEC employees would be quite
    appropriate in this notesfile as it very much relates to the way we work.

    				   -davo

In reply to the first comment Ken addressed: "Systems Integration"

Why are we losing money?

I'll give my answer having been an EIS specialist for 5 years: "Training"


Several years ago, we had approximately the same size consulting practice
as Auther Andersen & Co.  Today, we are much smaller.  The biggest difference
between the two approaches is the companies attitudes towards training.
A.A. sends all new employes to a summer boot camp training in Chicago.  At this
training, the equivalent of Boot Camp, they are training in consulting 
methods and how to interact with customers.  People who fail this course find
other employment shortly.  Periodically all consultants are rumored to attend
refresher training particularly when they enter the senior and manager level
positions.  The currently specialize in "SYSTEMS INTEGRATION" and have training
plans for doing such.


The typical Digital policy is hire someone from outside the company who has
"Integration" on his resume at consultant level.  Then immediately send him
to a customer to run an integration project.  Of course, all us technical
specialists who've been doing All-in-1 and System Management residencies
are also magically labelled "Integration Specialists".  

Software delivery has always been a business where people are hired to fulfill
a contract based upon a particular skill.  When that contract is up, it is up
to the individual to develop him/herself.  Occasionally, they get one to two
weeks a year of specific technical training.  The usual occurance is "learn
on the customers nickel" without pissing them off.  Some people can pull off
this ruse, most find it very difficult.  The custoemers also know we're doing
it!

I was probably the most unlikely specialist to transfer to EIS; incredibly
shy, dyslexic, and blessed with a propensity to stutter.  My first assignment,
a DECstart.  I shuddered and sweated for 4 weeks trying to schedule the delivery
and prepare.  The delivery was a disaster.  The company offered me no training
in how to deliver or whether I would be any good at.  Today, I'm still very
weak in teaching, but a lot better than I was.  This policy of Sink or Swim
personally has forced me to change in ways I'd never expected and am grateful
to Digital for the opportunity.  I've developed a level of personal confidence
and technical competence I would have never thought possible. I've pulled off
assignments considered by everyone in the corporation as impossible and 
and developed personel abilities second to none.  Because of the disabilites
I brought to the job, I get very little recognition except from my coworkers.

I feel very sorry for those customers of mine who had to pay $120+ to 
train me.  I'm sorry to say, this story is often repeated through out Digital
and many customers while giving us good reviews, consider Digital Software
Services too expensive for the level of expertise delivered; comment "We
don't like training Digital's technical people".

Sales support specialists are sent to an intensive DSST training.  EIS
gets told to deliver an average of 34 hours per week of consulting from the
day they enter the business. I was really encouraged by the level of confidence
from my District Manager when asked to explain some of the details and futures
of our exsistance during the meeting explaining the recent "TSFO" terminations.
He was proud of the fact that he made his margin percentage by ELIMINATING
TRAINING EXPENSES.  BTW, under his watch, our district went from the number
two end user district in the country to almost bottom.

    RE: .16

    From a sales perspective, I can certainly identify with the "lack of
    training" you speak of.

    A customer of mine purchased a 6000 cluster ... and a DECstart package
    which was "customized" to acquaint a customer from going from a stand
    alone system to cluster environment ... you would not BELIEVE the phone
    call I got when the "specialist" arrived on site and could not even
    boot the cluster ... 

    Jerry