Conference 7.286::digital

    re: -1
    
    
    I would hope that it would not be the demise of DecDirect.. I feel
    we have ALOT of good people there and the help out alot of our
    customers.. They might just get a bigger Software Portfolio for PC's
    though...
    
    
    Joe
    

I must admit that I don't understand this one at all. Virtually all the SW
distribution companies do not make money - only the top 4 in Europe do, and
even then they're running a razor sharp margins. I don't see how this will
add value to the corporation... do we really want to be in the traditional
software distribution business?
								- Ian W.

Who among us doesn't think we could benefit from improved distribution
methods.

Just maybe, being so lean and mean, 800Software knows how to do it in a
cost effective way..........

Think about it! 

Key point: what business do we want to be in? Good software distribution is
in fact two combined businesses:

	1)	Having product on someone's doorstep within 24 hours
	2)	A credit line for retail businesses that are in the grip of
		a market-led de-tiering exercise

If we want to live in a wafer thin margin business with little prospect for
growth, we're now in it. And remember, a good software distributor has as
many credit controllers as it has technical support people!
								- Ian W.

    Does this mean we have to TFSO 200 Digital people in addition to
    those we're already going to lose?

They are located in Richmond, CA.  There was an article about them in 
the Contra Costa Times last week and they have been advertising in
the want ads.  The reason that they are selling is that the company
became too large to be managed by the family anymore, though they
will continue the operations.

Their role is to be a PC software distributor for Digital and as such,
that will be the only products that may disappear from DECdirect.  So
now you can call 1-800-DIGITAL for VAX and Ultrix, 1-800-PCSBYDEC for 
PCs and 1-800-Software for PC Software.

Larry

    >> Does this mean we have to TFSO 200 Digital people in addition to
    >> those we're already going to lose?
    
    200?  Who knows?  Since Digital has refused to divulge the details
    of the deal, including how much this acquisition is costing the
    company, we'll probably never know how many of us are going to hit
    the street because of this.
    
    As to an earlier request that went something along the lines of
    "What good is this?", again, who knows?  It'll probably sound
    real neat in the Country Club locker room, though, when all of
    the other execs in other companies are bragging about their
    acquisitions.  Can't feel left out, you know.
    
    Meanwhile, David Stone has announced that there will be "several
    hundred" layoffs in software engineering early in FY93.
    
    Chris

I happen to be from the group who started the deal with 800-SOFTWARE.
First, they are a profitable company and no it was no bought to put 
DEC-direct out of the business. Aside from answering the phone to take 
an order then do lots of marketing, pre-sales, and post support for 
folks in the PC area. This does mean a lot for Digital since our own 
employees, (please take this as no insult), are little more VAX-centric 
in these activities. 

As I promote PATHWORKS support in PC products to ISVs (Independent 
Software Vendors) it really helps to enough them to work with us with a 
company like 800-SOFTWARE behind you. This way you have marketing/sales 
division of Digital who you can really say is dedicated to PCs. 

Regards,
Bob.

    When I first heard about this possible sale last winter, I was given a
    brief profile of the company.  As .10 said, they are a PROFITABLE
    COMPANY. They had 30% growth in 1991.  They sold the software at 3%
    profit, which is very good in the industry.  They sell mostly software,
    and a little hardware (like cables, connectors).  They will not put
    DECdirect out of business because they deal in non-Digital products
    only.  When our customers want non-Digital software for their PCs
    (which are just as likely to be non-Digital), they can still get it
    through Digital. When Digital can sell its customers non-Digital PCS
    and software, it can still benefit by getting the service contracts,
    which account for about 30% of any total solution.
    
    This subsidiary is an asset for Digital, if we leave it alone and don't
    Digitize it!  And, I hear that we aren't going to be allowed to mess
    around with the company.
    
    KB
    

Digital should be packaging and marketing products that we put through all
channels, and not just DECdirect. As for the margin, I rest my case; for their
industry, the margin is trending down. I only hope that they're strong in end
user sales and not to retail, otherwise we're going for a large bath.

You can't see which way a train is going to go by looking at a railway track!

Now, why aren't we packaging products to sell through conventional distribution
channels like 1-800, PCconnection, PCwarehouse? That's the bit of culture we
have to change, and i'd question the need to buy a software distributor to
work that one out.
								- Ian W.

    I agree that we probably should be looking at outside expertise.  There
    is no guarantee that those; who by their wisdom, experience, business
    acumen ran this ship of a business aground during this
    recessionary storm; will chart a future course for success.  Buying
    successful small businesses may work if they are autonomous.
    
    Regarding the direction of the train.  After trains lost market share
    to trucks because of delivery, service and lost passenger business
    because of airlines etc. in a generation people may look at the tracks
    and wonder not which way the train is going, but rather what their
    purpose was in the first place.  We may indeed be that train.
    
    Dave

We have had choices.

We can try to get DECdirect up to the service level that the PC software mail
order houses I've called are already up to (and improving on over time).

We can abandon that business altogether as some advocate.

We can acquire an established channel in that marketplace, as we have done,
leap-frogging our own internal inabilities to create such an organization.

I'm in the Field. I've been embarrassed time-and-again by the PC-market ignorance
of the call-takers at DECdirect and the ineptitude of the admin systems that back 
those people up (if you don't know the DEC part number, you're in for a
frustrating (low satisfaction) and long (high cost of sales) experience - and how
many PC customers memorize our part numbers?!). 

The customer type I'm concerned about is the procurement officer for a concern
having several thousand PCs to whom we have pitched "one-stop" shopping with 
Digital - as well as the PC purchasing staff of businesses with growing numbers
of PCs (and they mostly are these days). I don't think we are targetting the
home PC buyer - but if they should call us, I think they should be treated as
well by us as by anyone else.

Not that DECdirect isn't improving - but from a customer's perspective - and I am
one for my cost center - and represent DEC to customers who experience this level
of "service" -- if I have a choice amongst vendors, I'll choose the one that can 
understand what my wants are, stocks a very wide variety of commonly available 
packages, can quote a decent price, and can make honest statements about 
availability and delivery. With DECdirect, we have problems with the very first
two items: can't get from need to specific product, can't easily determine if we
stock the product and we don't stock enough products; our prices and delivery are
good enough.

We at DEC have execrable administrative systems which are unable to give us the
info we need to serve our customers in a *timely* manner. I believe this to be at
the root of DECdirect's service problem - although PC market unawareness is a 
close second. So, it makes perfect sense to have in our fold a company that
successfully serves this market as long as this market makes sense for us to be
in. 

To invest what we have in terms of marketing, manufacturing and field training
without a software delivery arm that is the equal of the competitions'
would be to put the investment at risk - particularly since my customers are 
watching super-close to see if DEC can get it right this time, *finally*.

Norm

    re .14
    
    >The customer type I'm concerned about is the procurement officer for a
    >concern having several thousand PCs to whom we have pitched "one-stop"
    >shopping with  Digital - as well as the PC purchasing staff of
    >businesses with growing numbers of PCs (and they mostly are these
    >days). I don't think we are targetting the home PC buyer - but if they
    >should call us, I think they should be treated as well by us as by
    >anyone else.
    
    The procurement officer shouldn't have to call.  We should have
    hot-lines connecting our customers with us with AFT (Automatic Funds
    Transfer) and APD (Automatic Product Delivery).  They send us an
    electronic message in an agreed upon format and we deliver and bill
    them without involving either people on a phone or paper mail.  We want
    our suppliers to deal with us on a blanket PO basis, why can't we do
    that with customers too?  (given sufficient volume, etc)
    
    I don't know, maybe somebody gets a percentage of the waste we create. 
    :-)
    
    /rab

    re: .15  The EFT/EDI type of system ...
    
    These systems are being used by some of our largest customers in the
    Channels space, but selling PC software through them may take awhile.
    
    One new method I've seen several of the distributors take is the
    "Onsite Store" approach, where a distributor ships a truckload of
    PC software to a customer for stocking.  When a user requisitions
    a piece of software (sometimes online) a tech delivers a standard
    shrink-wrapped copy of the software to the user within minutes.
    The company is then billed by the distributor for the software used
    from the stockroom.  This has several benefits for all parties in
    the loop:  The distributor carries the inventory cost, the company
    the shelf-space and distribution costs, and the user gets great
    response time and no paperwork hassles.
    
    The main customer I work with has asked DEC if they were interested
    in a similar deal, but no action (on our part) has come of it ...
    
    Oh well.
    

    Are Digital employees going to get any kind of discount from this
    operation? Such as the 20% EPP?