Conference 7.286::digital

    I'd say it is real crazy. HP are becoming one of our strongest
    competitors. They are getting really upset about Alpha, and how it is
    going to hurt them. The two product sets do not really support an
    integration that would necessitate massive product shutdowns on
    someone's behalf. The two companies are that big that neither could
    really buy the other out.
    
    q
    

    Yeah, customers are discussing it on DECUServe, under the "H. Ross
    Perot to buy DEC rumor" old topic.  They can't make head or tail or it
    either.

    Well, it would be a rather large company ($30m) that could probably
    really go after big Blue....we do have similar cultures....
    
    but it does sound farfetched..
    
    Simon and Quodles....up late on a friday I see (Or Saturday in New
    England by this time...)
    
    Just finished my draft of next year's account plan....off it went!
    
    Good night....
    
    Gil
    

    Perhaps someone thinks the H.P. (Hewlett Packard) initials, really
    stand for H. Perot. He's on a roll, so people are making alll sorts of
    assumptions and guesses about him.
    
    re .up late
    
    True noters note when the urge takes them...   :-) Usually, after the
    household chores are done, the kids are bedded, and the network traffic
    is low...
    
    q
    

    "Quoddles"????
    
    Ha! :-)

    if DEC and HP merges, will we make the HP programmers switch to BLISS or
    will they make us switch to whatever language they most use?

    iam concerned about this.

    also will we make them use our worksations, or will they make us use
    theirs?

    also , will we have to move to Texas because of this? i dont like the
    heat plus i cant move right now .

    also will we all get new badges with new number? i dont like this,
    i just about learned to memorize mine after three years and i dont want
    to go through this experience again.

    also, do we have to wear ties if we merge? i dont like to wear ties,
    i cant breath well with a tie.

    so many questions i have, but i stop for now.

    thank you very much
    /nasser

    Ah, with Mr. Abbasi's help, I finally thought of a good reason for a
    merger!  We could force people to stop using BLISS and suddenly be able
    to write software that has a hope of being ported to other vendors'
    systems.
    
    :-)
    

    re .5
    
    As I recall, I first met Gil, before my nickname became "q"
    
    re .6
    
    Nasser, you have pretty much outlined most of the reasons why such a
    merger is totally unrealistic. There are too many practices, procedures
    and so on, that would have to change to make it practical. Neither
    currently has the money or power to take over the other, and the two
    have such differing and opposing idealogies that any outside party with
    sufficient funds to "buy" both and merge, would be pouring money down
    the drain, as one would have to just let them run as seperate entities,
    or shut one or the other down. And there is absolutely nothing to be
    gained by that. (Unless, of course, the third party, is IBM, but then
    the U.S. Govt would probably have something to say about that.
    
    q
    
    
    q
    

    Gee, do people already forget the HP-Apollo buyout?
    
    Wasn't that a culture-clash of nearly the same proportions?  Financial
    issues aside, I'm sure that HP would just _love_ to get its hands on
    the Alpha architecture... so _they_ can make the money that we'd
    otherwise take away by virtue of having the hottest chip in the
    marketplace (this week)...
    
    John
    

	I don't have the article still, or I'd type it in.  However:

	I don't recall the author of the column (NOT a news column),
	talking about discussions in progress.  He merely mentioned
	that it might be worth considering.  However, even many of
	his own justifications fall down under the weight of:

	* Past history at HP, especially considering  the Apollo
	  buyout

	* How to handle the integration of two competing RISC architectures

	* Different management styles

	* Completely different operating systems (at least HP and Apollo
	  were much closer than HP UNIX vs OSF and VMS)

	When I read the article, it appeared that he contradicted himself
	many times, destoying many of his arguments.  The whole article
	read more like a stream-of-consciousness (Sp?) thing that he
	hacked together at the last minute to meet a deadline.  It
	DEFINITELY weas not even at the level of Charlie Matco and some
	of his stories as far as reporting detail.

	Marshall Wiley
	Washington, D.C.

    There's an article in the Boston Sunday Globe Business section talking
    about the possibility.  Nothing substantive except some interesting (as
    always) quotes from Scott McNealy.
    
    -Ken

  Didn't Buroughs and Sperry Rand go through something like this to form
UNISYS? It seems that originally people were saying much the same things about
why they would fail as we've seen in the last few notes. One company was
suppose to be too technical while the other was suppose to be to business
oriented, the people would never get along, the procedures were too different,
etc. 

  I haven't heard much about them lately, how did that work out? 

  George 

    
    Well, they can still afford to light their Oakland building off
    Hegenberger Rd near the Coliseum..

    
    	The article in yesterday's Boston Globe was just an article that
    	stated that a merger between DEC and HP would make sense, given
    	both companies' strengths and weaknesses. It was merely one man's
    	opinion.
    
    	John

 >>                    <<< Note 1940.12 by HELIX::MAIEWSKI >>>

>>  I haven't heard much about them lately, how did that work out? 


Well, it took them about five years to recover.  When they merged, Unisys
was the number 2 computer vendor (for about 15 minutes ;'} ) and then the
bottom fell out.  Unisys just announced their first profit since the merger.
They did this through massive reorganization and layoffs.

Hmmmmmmm, sounds familiar.

    Plus... It wasn't just Burroughs.  Univac bought RCA a couple years
    earlier.  That "organization" never really got homoginized before the
    Burroughs deal.  Different management styles and different pay
    structures are pretty difficult to merge.  I knew some old Univacies
    who never accepted the Unisys way.
    
    But, yes, as I read the Washington Post article, it wasn't any sort of
    a rumor of what was going to happen.  It was merely a speculation of
    "Hey, wouldn't it make sense if..." kind of thing.
    
    So, no, I don't think it would make much sense even though DEC & HP are
    more similar than any other of the computer manufacturers with over $5B
    anual sales.
    
    Bob

>>>  I haven't heard much about them lately, how did that work out?

The Burroughs/Sperry merger was in some sense a failure because:

1. The two companies were already struggling. As some pundit noted, "When
   you merge two smaller, crummy companies, you just get one big crummy 
   company" (or similar words).

2. The "merger" was actually a hostile takeover, and Sperry management
   finally agreed to a shotgun wedding (then it became a "friendly merger").
   So there were inherent problems with the "merger" of two cultures.

3. Burroughs took on a huge debt to buy Sperry, and this debt is still
   dragging the company down.

In another sense, the merger was a success because the company is still around.
If they hadn't merged, Burroughs and Sperry might be something like the 24th or
25th largest computer companies, sinking fast, or they might not be around at
all.

Vicki Meagher
former Burroughs and Unisys employee

    
    A friend of mine has been with Unisys since 1979, the same time I was
    with Sperry when they had their mini plant in California. Eventually,
    in 81 they shut it down. 
    
    He is doing well with Unisys, and as mentioned did make a profit, but
    went thru lot of layoffs and reorgs to do it. Sounds a lot like Dec,
    but in the case of Unisys they inherited a ton of people. We on the
    other hand just lost control of our hiring, and are now paying the
    price.
    
    The computer business is jsut about all run the same way. And all the
    companies are so much alike these days.
    
    

    The article in the Boston Globe pointed out some potential advantages:
    
    	1. HP has been nimble in the marketplace. They make money. They
    	   are profitible. They manufacture quality hardware and UX is a 
    	   well respected UNIX product. Contrast with Ultrix and
    	   investments DEC has made here over the years. Furthermore, HP 
    	   financials are used as a benchmark (best in class) at some
    	   locations winthin DEC.
    
    	2. DEC is positioned as a superior supplier of distributed
    	   computing products that compliements a weakness in the HP
    	   product set.
    
    	3. Both firms profess to people oriented management practices.
    
    	4. Although a combined (friendly) merger between HP and DEC would 
    	   continue to result in employee downsizing, eventually the
   	   Company would emerge much stronger. DEC has a large installed
    	   base of VAX systems that needs upgrading. This installed base is
    	   an attractive buy for HP. 
    
    	
    One interesting note included in the article was the fact that Bill
    Gates, CEO of Microsoft, has a net worth in excess of DEC's current
    market valuation. That's pretty depressing...
    
    I don't think the idea is as crazy as it sounds. The marketplace is
    so very different from what it was 5 or 6 (or even 3) years ago that
    DEC should keep all options open. HP has demonstrated considerable
    skill in the BUSINESS of marketing computers. We should learn as much
    as possible from them.
    
    The article appearing in the Boston Globe was copyrighted from the LA
    Times syndicate (near Palo Alto).
    
    
    
    

    re: .16
    
    Univac did not "buy RCA" - in the early 70's they bought parts of the
    old RCA computer division, just like DEC did (Marlboro plant, core
    memory business).
    
    RCA was an independent, $13 billion company until 1986 when it was
    bought by GE.
    
    /ljj
    
    

  There are a few things that go against the idea of large mergers that were
not factors when UNISYS formed several years ago. First, due to the failure of
junk bonds and S&Ls, there is no longer a lot of loose money around for buying
huge corporations. Second, what money is around is not being invested in giant
computer companies. Third, the tendency of the U.S. Justice Department to wink
at anti-trust violations has a lot to do with the Republican's 12 year grip on
the White House which doesn't look as strong today as it did a year ago. 

  It appears that there is a fundamental change in the computer industry that
goes beyond business slowing down due to recession. The mini-computer market
has pretty much disappeared and has been replaced by demand for smaller
commodity type machines that don't require giant corporations for support. We
are entering a time when smaller is better at both the hardware and corporate
level.

  The decade of turning massive companies into mega-massive companies has run
it's course and that goes double for our industry. Neither DEC or HP is having
it's best years, but we are not that bad off either. I think that this idea
of a merger will pass and we will continue to see cost cutting to hold down
expense and deals with smaller companies to go quickly into new technologies.

  George

    Perhaps those who would be happiest with an HP/DEC merger are IBM and
    Apple.  
    
    Tons of *VALUABLE* management - no money for workies...  Maybe we could
    disappear faster than Unisys - the technology of today is faster than
    it was when they merged.
    
    Maybe we should argue back that the LA Times / Boston Globe / WSJ
    should merge with marvel comics...
    
    > They're all fantasy rags
    > The "newspapers" have nice fonts which the comics hand-written 
      balloons lack
    > Marvel has better colour and graphics departments
    > The founder of Marvel died last week, so his [former] ethical
      objections won't get in the way
    
    etc. etc. etc
    
    
    Don
    

    Wall St doesn't seem to share your value on management.

    and the market is never wrong.

    if you have found some valuable management in DEC you are indeed
    fortunate and shouldn't move.

    Well if the stock gets any lower you wont have to worry about a merger
    but how about a buyout????!!!!!! At 37 1/8 thats starting to get pretty
    cheap. But on the other hand if no one is looking at us at this
    price we must be one screwed up orginization???? Just food for thougt.
    
    LSH @CWO 

  Buyouts are not happening as much these days due to the failure of junk bonds
and S&L funds which were used to fuel many of the buyouts of the '80s. Also
with the future of the White House uncertain, people may have to deal with a
Justice Department that is not willing to turn it's back on anti trust
violations as they have in the past. 

  There are other reasons not to buy out Digital as well. We are not like
an airline which can be busted up and sold in pieces. We don't have assets
that stand on their own like airplanes or rights to trunk routs. We are full
of small departments that rely on the fact that "Howie in the ABC group"
has this resource and "Fran in XYZ" provides that resource.

  Also, I've heard rumors about "poison pills" being implemented to prevent
a buyout but I don't really understand them. Does anyone know any more about
this?

  George

    
    re.25
    I can think of several companies that would love to aquire Digital's
    logistic organization, stockroom 17, Field Engineers, etc.
    
    re. Poison pills. these are designed to remove all the cash assets
    of a corporation "under seige" and deposit said cash in senior
    managements pockets. These "tactics" are rapidly being challenged
    in the U.S. Courtrooms, by stockholders..........
    
    We may be a better target than you think.
    
    
    				fred deady
    				wbc::deady
    

Just my opinion:

If the Japanese stock market were doing better, I think we'd be a major takeover
target by a Japanese company looking for existing sales, service, and software
organizations in the US to support their hardware. But, right now, the Japanese
stock market is depressed, and the money to do that is harder to get.

    re .26
    
    >I can think of several companies that would love to aquire Digital's
    >    logistic organization, stockroom 17, Field Engineers, etc.
    
    Please name a few.  I could go into specifics, but I'm more curious who
    would want an organization that is far from "best in class", has about
    a gazillion dollars of inventory dating back to paper vt52 logic
    boards, and has about as manual an order filling process as can be
    imagined for an operation of its size.
    
    I've seen a Japanese company set up a logistics operation in the US in
    less than three months that would make our people drool (a common, but
    not pretty site).  They made it look easy.  Small inventory pools, high
    quality, high stock rotation, next to zero backlogs, and an RA process
    that actually prevented problems from recurring; they had it all.
    
    So why do they need DSL?
    
    Bear in mind also that some of our competitors are actually divesting
    themselves of direct service organizations.  One that comes to mind is
    Sun.  They are quickly transfering their hardware support to companies
    like Kodak and Sorbus.  They soon will no longer be servicing their own
    hardware directly.  Parts break less often, and when the do you don't
    need an "engineer" to fix them; either the customer can do it
    themselves or a low cost courier could do it.
    
    So why do they need our field "services" organization?
    
    I'll leave sales alone for now.
    
    I would guess that a convincing argument could be made where a company
    buys DEC, or a controlling interest, and then blows away organizations
    like logistics, the ssb, and even i.s., and subcontracts those
    functions out to low cost service providers.  Well, anyway, this is
    something DEC could never bring itself to do from within.... or could
    it?
    
    fud for thought.  anyone hungry?

    re .28
    
    I have to agree ...
    
    Anybody who buys DEC is getting a) the cash, b) the inventory, c) the
    patents, d) the good will.  That's all there is that is transferrable.
    
    Our service organization gets good marks in some places and flunks
    badly elsewhere.  Parts of our h/w and s/w engineering are very good,
    and parts are not so hot.  Some of our products are or have been great
    and there have been dogs.
    
    IF anyone were to buy Digital, there would be no value added to the
    existing organization or jobs.  Many good individuals who are poorly
    organized does not make an appetizing meal.
    
    fwiw,
    
    /rab

    re .26
    
    >I can think of several companies that would love to acquire Digital's
    >    logistic organization, stockroom 17, Field Engineers, etc.
    
|    Please name a few.  I could go into specifics, but I'm more curious who
|    would want an organization that is far from "best in class", has about
|    a gazillion dollars of inventory dating back to paper vt52 logic
|    boards, and has about as manual an order filling process as can be
|    imagined for an operation of its size.
	
	Sorbus is a good start, add Tymshare, GE, Westinghouse and any
	other third party maintenance corp. you would like to. Access
	to proprietary architectures and modules would be quite an
	acquisition. Digital Services provides a large portion of our
	bottom line, would like to lose it? The same Japanese firms that
	can eat our lunch in several areas now would welcome an entrance
	into a "DEC" account. How many Sales Reps out there would like to 
	relinquish their support contracts? 

	If services are the future of the business, should they not be
	among the most prized current assets? I do not argue that we
	are superior in our abilities, only that through us a large
	chasm can be opened between our current customers and us.  
    
|    I'll leave sales alone for now.
    
|    I would guess that a convincing argument could be made where a company
|    buys DEC, or a controlling interest, and then blows away organizations
|    like logistics, the ssb, and even i.s., and subcontracts those
|    functions out to low cost service providers.  Well, anyway, this is
|    something DEC could never bring itself to do from within.... or could
|    it?
    
	Have you followed any of Digital's recent acquisitions? Do we look
	like we have a focused agenda? Sometimes instead of addressing
	a weakness and resolving it, some would give up the ghost and
	and find someone to do it for them. Do you see any parallels?
	
				fred deady
				wbc::deady
				Fred Deady @MEL

    re .30
    
    Me thinks there is a misconception that all that is service is golden.
    
    Well, Sorbus for example, would have little interest in our logistics
    operation beyond the availability of parts.  I would venture the other
    companies you mentioned are in the same position.  Sorbus already has
    all of the staff it wants for it's given market share; if they grow,
    they will hire - if they lose market share, they will fire.  And parts,
    as they say, are parts.  Would they want bits and pieces?  Sure they
    would.  Do they want the whole?  Even EDS has been known to drastically
    downsize customer support staffing when they take over the role of
    support.  I wonder what they would do if they got our services
    organization.
    
    And of course, any competitor would love to have access to our
    accounts, and some are already helping themselves.  8^o.
    
    As for our "sources" of revenue, I am painfully aware of where our
    service revenue is coming from, and what the future trends are.  Guess
    what?  Project our current revenue streams out along with technology
    and customer trends, and all of a sudden, *poof*.  If we don't sell
    more, of a lot of things which cost us a lot less to deliver than we
    are doing today, we may lose money selling service in a very short
    time.  Period.  
    
    I'm sure there are others out there who get paid huge bucks to watch
    this type of stuff, and who could answer this much more concisely.  Of
    course, they may still be waiting for the stock to hit 200, split 3 for
    1, and then triple in value again.  No matter.
    
    And with that, dangling particples, leading prepositions and all, I bid
    you sweet thoughts.  

    
    re -.2
    
    Our architectures and one of our operating systems may be proprietary,
    but our spares are not. Take the time to talk to the people in Digital
    Assisted Services (formerly known as the Shared Maintenance Services)
    and you'll quickly discover that, at least under U.S. Law, precluded
    from withholding the sales of spares to legitimate customer requests,
    including TPM's. (We may charge outrageous prices in some people's
    opinions, but they *are* available).
    
    Whether that's appealing to a possible buyer is an intriguing question
    since the ROI of hardware service is somewhat dependent on the cost of
    the spares and the MTBF of the stuff under contract. The trend in the
    industry suggests that the new hardware out in the market has or will
    have a demonstrated MTBF that is an order of magnitude (or more) better
    than what we shipped 5 or 10 years ago. So, the margins are
    evaporating at both ends. Customers today are seeing a 3-5 year MTBF
    on their PC's, which suggests that they might not fail under their
    useful lifetime, since more powerful PC's keep coming out. (Intel's
    published SPECmark rating for the 50Mhz 80486 is 41, which is about
    the same as a VAX9000. I don't want to start a performance rathole,
    but it's frightening to think about how fast the market changes). A
    customer might simply plan/schedule to retire a PC after three years
    as a matter of course, the way motor vehicle fleet operators rotate
    their inventory. So, if it never breaks, why make an investment in
    spares? If the new stuff is this reliable, why keep the old stuff
    that's so expensive to maintain?
    
    

    Given HP's frantic behavior evidenced by their marketing ploys around
    DECWORLD - I'd say that HP was taking some desperate measures.  I also 
    personally feel that their actions - if condoned by higher management - 
    did nothing to strengthen professional or personal relationships between
    the two companies' management force.
    
    FYI - I'm referencing the ads HP took out and the truck they hired to
    drive a billboard up & down Northern Ave., in front of the WTC.

    "frantic" is a word that applies more to DEC than it does to HP.
    
    HP is doing just fine and until Alpha workstations running UNIX are
    shipping in volume will not have anything to worry about from Digital.

.33>    I also personally feel that their actions - if condoned by higher 
.33>    management - did nothing to strengthen professional or personal 
.33>    relationships between the two companies' management force.
.33>    
.33>    FYI - I'm referencing the ads HP took out and the truck they hired to
.33>    drive a billboard up & down Northern Ave., in front of the WTC.

    In fairness, I think it should be noted that the first one to use such
    tactics was Digital, I believe, at an HP user group meeting a few years
    ago.
    
    Of course, we were riding a lot higher then than now...

    re .35
    
    Yes, I was involved in the HP VAX Attract Program, and we went to the
    HP Users Show (Enterex) and put up a competing show in a suite at the
    Hotel Ponchetrain in Detroit, while the HP show was across the street
    at the COBO Hall.  That's when HP was vulnerable, in the transition
    between their MPE CISC machines and the HP PA-RISC machines.
    
    Sounds familiar, doesn't it 8^)
    
    Mark
    

    
    Any talking from Usenet about this HP-DEC rumor or story ?
    
    Anyone like to share if they happen read anything from the wire ?
    
    Michael..