Conference 7.286::digital

There is a companion article in the Boston Globe, also reprinted without
premission, to the one announcing the new Wang/IBM agreement.


IN THIS CASE, GOLIATH PROVED TO BE THE WINNER

by Charles Stein, Globe Staff


David buries the slingshot and signs a truce with Goliath.

That's how An Wang might have described yesterday's agreement between Wang
Laboratories Inc. and International Business Machines Corp.  The late An Wang
always thought of the two companies that way, with Wang playing the role of the
scrappy little David to IBM's lumbering Goliath.  Wang Labs' first television
advertising campaign actually used the David and Goliath theme to promote
Wang's line of word processing machines.

"There is one thing that the heads of all the computer companies in the world
have in common," Wang wrote in "Lessons," his autobiography.  "We have to deal
with IBM either as the company that already dominates our market or as the
Goliath that might at any moment enter it."

The Wang-IBM relationship actually goes back 40 years to the earliest days of
Wang Labs.  IBM expressed an interest in buying An Wang's patent on magnetic
core memories, a key piece of computer technology Wang invented at Harvard. 
The two companies argued about the sale for several years.  The negotiations
were difficult, with IBM using its legal muscle to strike a favorable deal.  An
Wang came away with an impression of IBM he clung to for most of his career: 
"Although they are formidable and aggressive," he wrote of IBM, "they are
highly bureaucratic and as a result they are slow to react."

Wang exploited that weakness in the 1970s with its success in word processing,
a market IBM dominated.  As Wang grew, An Wang continued to delight in the
gains he made at IBM's expense and continued to use IBM as the yardstick to
measure his success.  By the early 1980s, Wang actually carried around a small
piece of paper in his pocket that showed a graph with two lines:  one
representing Wang's growth rate, the other IBM's.  The graph showed that if the
two companies kept growing the way they had been, Wang would overtake IBM in
sales sometime in the 1990s.

It never was to be.  Wang's annual sales peaked at $2.9 billion and have
declined since then.  IBM's sales last year reached $62 billion.

In this version of the story, Goliath proved too formidable a competitor.

    What does this have to do with the Digital style of working?
    
    In any case, this ought to be discussed in MARKETING note 1593, but if
    you're going to discuss it here, the title of the note might reflect
    the fact that it is discussing IBM and WANG.

Patrick,

Being a Massachusetts-based minicomputer manufacturer, as is(was) Wang, these
industry trends could predict future changes at Digital.  How would YOU feel if
we decided to get out of the hardware business?

I've also changed the title of this note to be more descriptive.

Paul

    A comment on Apple - since they're in the title.... It seems that
    Digital would be the likely partner of Apple considering the previous
    relationships we have struck.  Their "computing style" and our's seem
    to be very complimentary.  They are supposedly talking with MIPS as
    well as IBM in their search for RISC processors.  The talk that their
    OS might be ported to Intel HW as well as RISC is a sad thing to
    contemplate. I think Apple is walking into the lion's den by courting
    IBM - problem is; they are not Daniel.

    All "Massachusetts-based minicomputer companies" are doomed.
    
    The only hope for Digital is to transform itself into a world-wide
    supplier of computing solutions.

    simply an aggressive extension of IBM's stated goal to be the leader
    in software.  After spending hundreds of millions on key 3rd party
    application software, the next logical step in the software game is
    to go after specific niches, and getting the MAC O/S and Wang VS on
    IBM RISC systems will drag along thousands of more applications as well
    as Apple & Wang developed software.  Compare this agressivness with
    our ISV etal efforts and you don't have to be a rocket scientist to see
    who will win the software game.  While we spend our time convincing
    sw vendors to port to Alpha, OSF/1, ODT, Rdb, etc., IBM is out getting
    access to non-IBM software NOW!!!
    
    just my .02
    Mark
    

Amid all the doom, gloom & bitchin, here's some good news:


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*+*    ENTREPRENEURS NEWS FLASH                                              *+*
*+*                                                                          *+*                                                                     
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*+*                       ENTREPRENEURS NEWS FLASH                           *+*
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*+*                                            ENTREPRENEURS NEWS FLASH      *+*
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*+*                                                                          *+*
*+*  This News Flash is intended to make you aware of something that we can  *+*
*+*  all be proud of and to provide you with the information you need to     *+*
*+*  personally brief your team.                                             *+*
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From: Pier Carlo Falotti                                      7 June 1991


  To: The European Entrepreneurs.
      The European Coaches.
      The Country Managers.
      The Country Group Managers.
      The Area Functional Managers.


Subject: Digital named as one of only six Open Systems vendors by European 
         Commission!


The European Commission has now finalized its list of approved computer 
equipment and services suppliers for Open Systems. These are :

      o BULL
      o DIGITAL EQUIPMENT CORPORATION
      o ICL
      o NCR
      o OLIVETTI
      o SIEMENS/NIXDORF

Digital is perceived by the Commission as "having done extremely well" in 
positioning its products for Commission acceptability with particular 
importance being attached to our :

      o Systems integration capability;
      o Clear commitment to OSI, in particular to open systems 
        architecture, the client/server model and standards;
      o Willingness to incorporate third party products, e.g. APPLE, HP;
      o Wide range of related services.


The Commission goes on to say that :

"It is with the above six corporations that general supply contracts will 
be concluded to cover the procurement of systems identified as the result 
of the Commission's evaluation."

This decision represents two major wins for Digital:

      o We are clearly identified as a vendor of Open Systems platforms.

      o We are recognized as a major supplier of Open Systems, multi-vendor 
        Systems Integration Services.

Important though this is, the real significance of being on the list of 
approved suppliers lies in the increasing influence the Commission has over 
Public Procurement authorities across Europe (EC, EFTA and the Central and 
Eastern European countries).  Digital should, therefore, greatly benefit 
from  opportunities in Public Administration, and in any form of Trans-  
European Networking as well as from the $21bn IT projects financed from the 
EC structural funds and from the EC's new $15bn R & D Framework Programs.

    re: .8
    
    Good news indeed. Given especially, the names that are *not* on
    that list.
    
    The more I see and read about Falotti, the more I like his style.
    He appears to be the one digital VP (albeit P of DEC Europe) who
    doesn't produce ephemeral nonsense. Perhaps since English is
    not his first language, he may have a considerable advantage over
    his American counterparts.
    
    Don H.
    

    re: Pier Carlo
    ...since the time he ran around with a tool box and later where
    he was my FS district manager, we lost sight....;-)
    but from the little I know about Euro happenings, it seems that
    he really is driving the entrepreneural model (said to be his
    invention) very hard.
    Lots of reshufflings and reorgs are going one, but I do not know
    how much of it is due to the model or due to the business situation.
    My guess is that it is due to the model and beeing accelerated
    by the economics (which might be the unplanned part of it).
    
    In any case, many people feel it as new "way of thinking", even
    if in their organization, environment the model isn't implemented
    yet as such. 
    (Today still crazy)Ideas emerge that probably wouldn't have emerged
    before, such as:
    
    How to get remedial support call work done in a flat,
    non hierarchical support structure ?
    
    Entrepreneur exceptions manager puts a  price-tag on every call and
    lets the folks bid.
    If nobody takes it and you do need to get it fixed by others
    crank up the price... repeat until....
    
    Entrepreneur resource manager watches his business and the 
    "call market". When the price is right, he takes.
    
    Risky ? Sure! Effiecient, non-bureucratic ? I guess so..
    /fred
    
    
      

    Before we get too excited about Falotti, let's go back and re-read
    his memo announcing the policy on purchases of notebook PC's for
    business/employee use: (paraphrasing) "we expect that you'll be
    grateful to pay for these out of your own pockets, whether for
    business use or not, at our 'favorable' terms".  The actual text
    is far more disturbing than the above approximation; check it out.

    Oh, and by the way, that has been quietly dropped. Weeks later, months
    later, I still cannot buy one.
    
    	- andy