Conference 7.286::digital

>    Early buyers were rattled by a glitch that caused some systems to
>    crash when used in certain applications.  Digital quickly fixed
>    the problem, but it was yet another setback:  The complex circuit
>    modules coming off already problem-plagued production lines had to
>    be used to fix the affected computers, rather than build new ones.

	Someone explain again to me why a product that is out early sells
	better then one that works. Thanks.

			Alfred

re .1
    
    ?  Seems to me the product was LATE!  
    
    ... also from the article:
    
    
<    The slow start has hurt Digital, which has been counting on the
... 
<    More than anything else, Digital's timing was bad - perhaps
<    fatally so.  Digital was hot in 1988, and its big customers were
<    clamoring for a more powerful machine.  But the company decided to
<    cancel a water-cooled mainframe design - all of IBM's are
<    water-cooled - and concentrate on advanced technology that
<    required no plumbing, a key competitive advantage.  That cost
<    perhaps a year.

<    When the new design was unveiled in the fall of 1989, setbacks in
<    manufacturing pushed back volume shipments another year.  By then,
<    recession was looming and capital spending by big companies was
<    slowing.  At the same time, an industry-wide trend toward smaller,
<    faster machines using standard software was sapping mainframe
<    sales.  

 <   "Digital probably missed the window that would have made this
<    machine a big success," says Marc Schulman, a UBS Securities Inc.
<    analyst.

 
    

    RE: .2 Yes it was late. So it was late AND didn't work. That was
    apparently someones idea of a good thing. A few more units of time
    and it might have shipped in working condition but that was not
    concidered to be importent enough to delay any longer. It was still
    shipper earlier then a stable product was.
    
    			Alfred

    Re .1, that's easy, Alfred.  For EVERY product there is a market
    window.  We blew it again.  Dave Stone is making a big deal these
    days about the devastating impact on profitability when you miss
    the market window for software.  Same is true for hardware.
    
    The only hopeful sign is that after 30-some years, we are finally
    beginning to recognize this......but I fear it may be too late again.
    
    We've got to stop building machines that don't make money.  I
    honestly don't think we'll ever learn.

    How about:  we've got to stop giving our products and services away.  

re: <<< Note 1492.5 by SAHQ::LUBER "I'm schizophrenic and I am too" >>>

>How about:  we've got to stop giving our products and services away.  

The current euphamisim is "business decision". It still hurts the pocket
book but reads better in memos and meetings.

Lee

Sorry, I think we should give our services away (at least from our 
customer's perspective). The perception that we are doing that and not 
"nickel-and-diming" the customer is causing us to make great strides with a 
major corporate account.

The perceived 'price gouging' by our service organizations is what's going 
to kill us. I speak from experience.

Regards,

Jim

	... the low single digits, and now you say we should GIVE AWAY
the most profitable business we have?  Services are the "added value"
everyone keeps alluding to when saying how we distinguish ourselves in
the "commodity" market of hardware these days.  What we need are more
people in the field wgho have the guts to sell the added value and not
the "allowance kings" we have now!

	Rethink what you said, and think about this:  Let's sell TOTAL
packages of products and services for ONE price.  Let the bookkeepers sort
out who gets credit for what!

    Exactly, Jack - we need to get away from detailed, line-item (this
    connector costs 3.95, this cable 14.40, this service 150.00/hr) to a 
    single undiscounted price line followed by the discounted one (for
    those accounts with DBA's)  - we've got to get better at 'bundling'
    service in with hw/sw/service solutions. Then let the 'bean counters'
    sort and count the beans....

    re .6;
    
    There's a world of difference between making sure that your
    relationship with a customer is profitable, and the dogged
    determination to wring every last cent out of every last transaction. 
    
    Yes, in the past, we've tried to "buy" business with allowances and
    free service (usually provideed by sales support folks).  We've also
    (as noted) created a reputation for "nickel & diming" the customer to
    death on services and gouging the customer unmercifully on software
    license fees.
    
    To be even-handed, one must also recognize that service managers
    operate under almost impossible metrics (my unit currently has revenue
    goals that couldn't be met if everyone was 100% billable at $150/hr.). 
    They really can't afford to let a penny get away.  I'm sure other
    groups are under similar pressure.  It is my hope that NMS will solve
    some of these problems by putting P&L resposibility where it belongs,
    and letting the service groups concentrate on delivering quality
    service.
    
    -dave

    I suspect our customers don't mind what it costs so long as it is
    predictable.  They have budgets to make, too.  If we tell them this is
    a $5K computer and then later tell them they need to buy an unexpected
    $1K service contract for each machine (I'm making up these numbers)
    the customer has every reason to be upset.  We are "nickel and diming"
    him to death because every time he turns around we ask for money he
    wasn't planning to give us.  His budget gets shot and he wonders if we
    have been less than honest.  After all, by saying that it would cost
    only $5K we may have underbid someone.  Then, by tacking on other costs
    that were unexpected we may have gone over competitive bids.  Better to
    be up front about it and say that this is what you pay, this is what
    you get, this is why what we offer is better than what you'll get from
    our competitors.  Predictability is one of the values we should be
    adding and charging for.
    
    Steve

You'll know when Digital really gets into the integration business
when we start giving away hardware to leverage service sales
(Rather than the other way around).

    We "give away" incredible amounts of free services at CSC's because
    our admin systems are so bad that we don't even know who has a support
    contract and who doesn't.  In FY89, at CSC Colorado, we had 72,000
    referrals to local offices of people who called without a contract.
    
    They are trying to fix that now through a service "entitlement" program
    which is also floundering from a lack of resources.....not to mention
    it has been going on for about a year.
    
    At the risk of repeating myself, our admin systems are so bad that it
    is only our size that keeps us afloat...and STILL management is not
    willing to make the massive investment necessary to clean it up.  For
    NMS to be truly effective we need incredibly better business
    information, and we ain't gonna get it.  Allocations will take over again,
    management will find out how to work the "system", and we'll be right
    back where we started with everybody looking good, but no cash in the
    drawer.  If L.L. Bean operated like we do, they would have been out
    of business ten years ago.
    
    We used to laugh ten years ago at how "someday, even DEC will learn how
    to use computers...ha-ha."  The chickens have come home to roost.  The
    problem is, they are also crapping.
    
    I am a service product manager.  I should be able to pull up a report
    on service contract margins, cut anyway I want it, reflecting
    worldwide business, and NEVER over 24 hours old.  I have nothing now.
    My gut tells me some of my products are losing money, badly, but I
    can't prove it.  To be honest, I don't even care anymore.  I'm tired
    of complaining about it...and I'm equally tired of hearing about 
    "next year".

>    RE: .2 Yes it was late. So it was late AND didn't work. That was
>    apparently someones idea of a good thing. A few more units of time

	Gee! I remember working on a project named Argonaut that was
	real close to completion when this thing was LATE! I even heard
	that a year or two after Argonaut was CANCELED, Jack Smith
	went to Spitbrook and said, in essence, "we goofed. Had we not
	canceled Argonaut, we would have had shippable product by now."
	Sigh... Also heard rumors from 9000-land that managers were
	changing jobs faster than you could keep track...

	Oh... Digital keeps changing! :-(

    re -1, yep, I heard Ole Jack say that with my own personal ears.  At
    the same meeting he also implied that he was there to pick our minds
    for ideas, inasmuch as "senior management" hadn't made a correct
    decision in the last two years.
    
    I have a relative in 9000-land, he (a manager) says he has never seen
    such turmoil and craziness.  He's bailing out, as is almost everyone
    else.
    
    A previous entry here talked about a manager so-and-so stating "we're
    in this for the long haul".  Translation?  "We're in deep trouble,
    everything is turning to crap, and we don't know what to do."

    Oh, no.  In the past I have been witness to "long haul" commitments for
    other machines.  Like, the Adam computer, the IBM PC Jr., the TI/4 Home
    Computer.  Also, the Amiga though evidently folks in Europe bought off
    on the "long haul" story and saved the product.  Come on Alpha!
    
    Steve

    Very interesting article on the 9000 in the June 10 issue of DIGITAL
    NEWS.  With tongue-only-slightly-in-cheek (I think) John Gantz makes
    a point that IBM is behind our misery.  He says they deliberately
    suckered us into a niche market that was already in it's "twilight",
    knowing full well that we would shoot our corporate wad in the effort.
    He holds out the possibility of a "total market defeat" if we don't
    do something quickly to redefine our market thrust.
    
    Personally, I think the 9000 is emitting early gangrenous fumes, and 
    the bailout of critical personnel is already starting.

     
          
     I'm really saddened to hear the news in here about the 9000. If we
    cant keep our attitude straight internally, then its very hard for 
    the sales folk to keep a smile as the customer signs the dotted line
    for one. Coming from a strong IBM background into DEC to work with DEC
    based IBM customers, and help develope DEC IBM based products, has been
    rewarding. With the announcement of the 9000, I personally had many
    hopes for a NEW generation of mainframe computers that would
    be less cumbersome, easier to use, low overhead, and FAST. So far its
    been impressive, and its seems like the customers still don't realize
    what it is we created, maybe we don't either. 
    
      One note on the donation to MIT to work on the next America Cup Boat.
    
    If they win and our 9000" DEC Flagship Computer" was used to aid in the
    design. Then the marketing possibilities are enormous.
    
      DIGITAL WINS THE AMERICAS CUP WITH THE VAX 9000. Sounds great an 
    AMERCIAN company, with a MADE in USA Box, with a MADE in USA Boat.
    Can you just picture the TV spot Boat-digital-MIT-USA.
    
      So maybe all those people are jumping ship a little too early, its
    seems like the race hasn't really started yet. 
    
      Hey ! You over there get those sails up higher. We've got a race
    to win.
            
 
    

The thing I don't understand is this:

With a machine that has a multi-million dollar price tag and a 1-2 year 
selling cycle, why do we expect it to have taken the world by storm already.

People don't drop 1-2 mill on a whim, it takes hard work and it takes *time*.

I have personally been involved in two of these sales (successful) and am 
involved in new opportunities that could net several more.  I am not a VAX 9000
driver or in any other way focused on these machines, they just happen to be
very kick-butt machines and in the right applications, there is none better.

Let's stop whining and get out and sell, and let's hope this corporation does
not orphan this machine before it's had a chance to establish a track record.
Give me a family of machines, let's get out the next generation of this thing
and lets show the world what desktop to glass-house computing is all about!

rah-rah!

    I note that this article only really has one tidbit of real news. 
    That's that Digital gave away a VAX 9000.  The rest of the article is
    an observation by a reporter who feels that the sales of the 9000 do
    not meet expectations.  What is of most concern to me are the notes
    indicating that we are losing talented people from the 9000 project.
    Now, THAT'S news, if true.
    
    Steve

re .19

Amen...!!!

Far too many short sighted people in this corporation touted the 9000 as the
3090-killer (which it is, too most extents). What they forgot, however, is
that the average 3090 site probably has probably a $20M+ investment in
Hardware and a $10M+ investment in Software (not to mention the people
training etc...)

We may have a better mousetrap but does in run CICS? Can you plug and play a
VM application to it. If we were that serious about that market place, we
should have considered a 370 based INstruction set emulator or the like.

Now what we should be doing with it is going out and selling it to replace all
of those aging CDC, Honeywell, NCR, BUrroughs etc mainframes, Most of whom
aren't even seriously in the mainframe market anymore.

q

    re .21 ..... that's really great, and I couldn't agree more.  Let's
    start this new thrust by getting a list of the DM's who are willing
    to agree to a 24+ month sales cycle, with a probably 30-40% penetration
    rate.  Man, that was easy!

    re: .9
    
    as I recall, it took the justice dept about 12 years to break up
    the "bundling" practices of IBM...since the final court decision
    around 1964-68(?) the practice has been very carefully avoided
    in the industry.....

    Another article with more fact and opinion on the VAX 9000 has appeared
    in the current issue of Business Week.

	... IBM was slapped for.  IBM gave no choice in that you had to
use certain of THEIR software on THEIR processors, and "Chinese Menu"
picking wasn't allowed.  This locked out the PCM's for a while.

	The "package" pricing David and I refer to is more of a business
decision in a particular sales environment.  The services bundling is
our focus, in .8 and .9.  But nothing is "locked", just making the smartest
business decision

----------------------------PRESS RELEASE-----------------------------

MARLBORO, Mass. -- August 22, 1991 -- Digital Equipment Corporation 
announced today that it would reorganize its Information Systems Business 
(ISB) unit.  ISB includes VAX 9000, fault-tolerant, VAXcluster and 
production systems. 

During the past ten years, under the direction of Vice President 
Robert M. Glorioso, ISB launched Digital into the high-end, scientific and 
fault-tolerant marketplaces.  One year ago, the engineering 
responsibilities for Digital's high-end VAX 9000 series of mainframes and 
supercomputers were transitioned to the VAX VMS Systems and Servers (VSS) 
group, under VSS Vice President William R. Demmer.  Today, Digital
transitioned marketing responsibilities for ISB to William Johnson, vice 
president of Corporate Marketing Planning.  

"Our progress in the mainframe business continues, and our investments
in these markets are considerable and well aligned within the VAX/VMS
business," said Digital President Kenneth H. Olsen.  "Digital's 
commitment to our high-end information systems business increases as we 
continue to focus significant resources on each of these markets."

"Bob Glorioso has made a significant contribution to the company's 
growing presence in the mainframe information systems business, first as
the leader of technology and engineering efforts, and most recently by
providing its business management," said Olsen.

For the next month, Glorioso will attend to pressing family concerns.
He has decided to relinquish his leadership of ISB while retaining the 
position of vice president.  He also plans to use this time to explore
new career opportunities at Digital.

Richard Whitman has been named acting manager for ISB, reporting to
Johnson.  Whitman, who has worked for Digital for the past 17 years, 
has participated in Digital's high-end marketing efforts for almost six 
years.  Most recently, Whitman was Production Systems marketing manager.

Digital Equipment Corporation, headquartered in Maynard, Massachusetts,
is the leading worldwide supplier of networked computer systems, software,
and services.  Digital pioneered and leads the industry in interactive,
distributed and multivendor computing.  Digital and its partners deliver
the power to use the best integrated solutions -- from desktop to data
center -- in open information environments.