Conference 7.286::digital

    My god, the results were worse than I thought!  Revenues were down
    $300,000,000!
    
    For a discussion of the slogan "The future is..." see note 2726.
    

    The last thing this Company needs is a vision....errrrrr no somebody
    else said that! :-)
    
    What it actually needs is ironicaly 'Imagination' our brand theme!
    
    Apple made big sales with its PowerBook range even when it was '386'
    with black and white screen etc,etc........but the Design and
    Marketing!
    
    It brings out the AV Quadra range, just a few weeks after we announce
    the Alpha PC with its 64bit chip.......but no sound, or Video built in
    ....its as if we can build great 'core' technology like the chip,
    but all the extras we just dont have the imagination for, in fact we
    boast thats its just like any other PC!!!!!!
    
    -Dom
                                                        

    Call it what you will.  We have a void in this company that adds up to
    lack of clarity around who we are, where we are going, how we
    differentiate ourselves from the competition, and what our unique
    contribution to the marketplace is.  
    
    It used to be clear;  it no longer is.  We are on a trip to who knows
    where.  I believe the collective wisdom, which on occasion surfaces
    brilliantly in this conference, can fill that void.  And I don't care
    what it is called.  If the word vision turns you off (and many have
    been visioned to death!), then lets choose a word that will move us
    forward.  The void hasn't gone away after years of aimlessness.
    

.0 states:

>An $83,000,000 first quarter loss is not that bad.  


I disagree. We have gone from a *profit* of $113 million last qtr, to
a *loss* of $83 million, that is a swing of almost $200 million.

If one believes our costs are flat to trending down from qtr to qtr,
then this loss is almost entirely explained by our downslide in sales.

Interestingly enough, the decline in sales from FY93Q4 to FY94Q1 
is $900 million. (last quarter to this quarter). This comparison is
different from comparing with same qtr last year.

I was just told by a colleague that this is not a fair comparison to
make, since Q1 is traditionally a *slow* quarter. But has it always
been *this* slow?

Any comments are welcome.

    We know how to cut costs.  We haven't the foggiest idea of how to
    increase revenues.  We're still trying to save our way into prosperity,
    and, like Wang and Data General, we will eventually (too late) learn
    that it can't be done.  Last one out shut the lights.

    
>I was just told by a colleague that this is not a fair comparison to
>make, since Q1 is traditionally a *slow* quarter. But has it always
>been *this* slow?

    Q1 has always been our worst quarter; Q4 always the best. Comparing
    Q1 to Q4 is never a fair comparison. In Q4 every trick in the book is
    used to make the end of year numbers look good. Salespeople beat the
    bushes to get customers to order early. Manufacturing does what ever
    it takes to get product out the door. It's a regular sprint. The next
    quarter things have to start over again. But lots of things that would
    have happened in Q1 happened in Q4 because of the rush for end of year
    numbers. Plus people are "spent" from the work. This happens in most
    companies in America.

    			Alfred

    In response to reply .6 - don't underestimate the power that "a change
    in accounting principles" had in causing us to post a profit in Q4.
    
    
    Dave

    Heck, why not create a slogan to tide us over until a vision is
    created?
    
    Us oldsters will remember the days when a famous brand of cigarettes
    used the slogan "I'd rather fight than switch." You would then see the
    face of a smoker of their brand sporting a black eye.
    
    Let's revive this macho/macha, street tough attitude and our recognized
    corporate abbreviation. How about lapel pins that state "DEC 'em".
    
    
    Dave aka Lefty
     

    When Hewlett Packard was down in the dumps, didn't have their product
    act together and could only promise their risc machines, the war cry
    became "kill DEC!"
    
    They did.
    
    It was a lousy vision then and it remains so now.  But I can't argue
    with success.

    
    
    	re the traditional great Q4 vs lousy Q1 numbers...
    
    	Didn't BP say, soon after he took the reins, that he was going
    	to do something about this camel's hump of revenue?
    
    	John 

    re: .0 (10K layoff rumor)
    
    We've heard whispers on the winds that the huge Q2 layoff which has been
    rumored for some time will not occur (at least, not in the US Digital
    Consulting).  Something about it being foolish to fire people in Q2 who
    will be needed to meet the Q3 business now in the pipe (gee whiz, that
    even sounds rational!).
    
    As usual, though, I'm not holding my breath...
    
    -- Russ

    Besides Q4 madness, our Q1 is also weak because it's the time most of
    our customers go on vacation.  NOBODY makes major purchase decisions
    during July & August.  When my wife was selling medical equipment this
    was her slow quarter as well (it was Q3 for her).  
    
    Additionally, since her Q1 coincided with the customers budgetary
    cycle, it wasn't as negatively impacted by the year-end symdrome.  Many
    customers simply hadn't the money to spend in December (but did in
    January).  Our customers, on the other hand, have learned to postpone
    purchases until late June.  Since most of them are on Jan-Dec fiscal
    calendars, this deferral has no impact on their budgets and, dependiong
    on our level of desperation, can save significant bucks.
    
    \dave

    
        RE  .8
    
        Instead of "DEC 'em", didn't you mean "Digital 'em"?
    
    
        :-)

    .12 >it's the time most of   our customers go on vacation.  NOBODY makes maj

    good point \Dave.

    speaking of which, i hear many countries in Europe for example, take
    looong vacations, especially during the summer, like Italy, the whole
    country goes on vacation in August, in England they have like 6 weeks
    standard vacations, in Germany they have also 6 or 7 weeks off,
    also in France etc..

    why then we only have so little time off here in America? only 2 weeks
    off for the first 5 years, and if you change your job, you have to
    start all over again. and only when your like worked for 30 years they 
    give you 4 weeks off.  

    since business is weak any way in the summer, why dont cooperate America
    take the summer off?, say August and let the employees recharge
    themselves and enjoy more time with their loved once and smell the
    roses more and all ?

    i know this is not exactly a \DEC issue, but in a way it is, because
    an employees with more time off, are a happy campers and more recharged
    employees, and a happy employees are a productive employees. 

    i just thought of this point when \Dave mentioned the thing about
    summer being lazy and little business in it any way.

    \nasser

    Well the bottom line is this, we damn sure better show a substantial
    profit in Q2, or you will see the stock at $20, and it won't be a
    rumour of 10k layoff.  It will be fact.  Business is tight right now.
    There is no money.  I work in government, and with defense cuts, losing
    business is a daily ritual.  What can you say when a customer says that
    Digital has done everything right, and that our prices are competitive. 
    However, since my customer loses a contract with the government, they
    don't need us.  One contract cancellation coming up please.
    
    NOBODY HAS MONEY!  We are in a global recession.  The book value of the 
    stock is $35.  That sucks!  Business is bad.  Slogans, visions,
    empowerment, teaming, and all that other B.S. will not bring revenue in
    the door.  It is not all Digital, it is GLOBAL RECESSION.  Name one
    computer company that is just rolling in the dough.  Face it folks,
    times are tough, and they will get tougher.  More layoffs, more losses,
    until something kicks this economy out of its suicidal tailspin, headed
    straight for the ground at mach 5!
    
    Sorry to paint such a rosy picture, but someone has to.  Digital does
    have enormous problems.  Unfortunately, this is happening during a
    major global crisis.  
    
    I used to laugh at 5.25% interest on a passbook savings account, and
    today that is good interest.
    
    Every penny does count!  It is dog eat dog out there.  83 million
    dollar loss sucks!  I would like to know what Mr. Palmer and the board
    thinks about it.  I know what I think about it.  Reducing headcount is
    not the answer.  At least not front line field level people.  I heard
    we have 238 vp's.  Is this correct?  If so, maybe we need to revisit
    this.
    
    Is Digital going to be here in the next 24 months, or are we going to
    be pieced out and sold, like our leasing department was?  Who is the
    majority stockholder in the company?  Why do they want preferred stock
    to be generated?
    
    I bust my butt here everyday, trying to bring in a profit to the
    company, but it ain't no picnic folks.  I am sure you know.  I am 
    on variable comp, so I make less money now.  My health insurance is
    going up 500%, that's right, 500%.  What's next.  We should all be
    happy we have jobs, I will agree to that.  I just hope that everyone
    in this company is truly pulling their weight, and we will return to
    profitablility.
    
    God help us!
    
    Signing out,
    Bob
    

    To all of you that are saying things like:
    
    	"Q1 is traditionally a soft quarter" etc
    
    So it may be. BUT the problem is that THIS Q1 is 10% down revenue wise
    on last years Q1. In my view that is a CRISIS.
    
    My own pet theory is that revenue has actually been dropping throughout
    FY93 and the magicians in the accounting department somehow managed to
    keep on reclassifying everything. But they had to show it sooner or
    later and this quarter is it.
    
    Folks we're beginning to really see the impact of:
    
    	- No leadership
    	- Scatter shot TFSOing
    	- Jobs for the boys
    	- CEOs who get 20% pay rises for shrinking the revenue by 10% in
    	  space of a year
    	- Weekly reorganizations
    	- No visible accountability. I want to know who in high places is
    	  being fired for presiding over a 10% drop in revenue
    
    Now what was the number of that headhunter that called me today...
    
    Pathetic,
    
    Dave

    If our customers are not buying, and the economy is so bad, whay are
    many of our competitors (HP & SUN for example) enjoying double-digit
    revenue increases while we enjoy (?) double-digit revenue DECreases?
    Seems to me like there's SOME money out there...customers are voting
    with their checkbooks.
    
    IMHO
    Mark
    

    I have heard (just last week)  that BP has obtainied board approval to
    lower the head-count to 65000... and that there is a target of 10000
    fewer by year's end.  I do not know if that meant "calendar" year, or
    "fiscal" year. 
    
    But, the writing is still on the wall, folks.  It's been there for
    years now.  
    
    This company  still seems to see "reduction in expenses" as the best route
    to profitibility.
    
    tony

    I HAVE A VISION..... YES.... IT IS.....
    
    "DIGITAL - LAST ONE OUT THE DOOR, TURN OFF THE LIGHTS..!!!"
    
    As for the layoff rumors, for during the holidays... So what's new. For
    the past few years, the upper crust of this company have played spoiler
    during the holiday season... Why should this year be any different.?
    
    So, Scrooge has found employment here at Digital... Is he CEO or VP..?
    
    Happy upcoming holidays to y'all!!! Your fired/laid off....
    
    Just my opinion!
    
    Bob
    

    Re: .19:
    
  > As for the layoff rumors, for during the holidays... So what's new. For
  > the past few years, the upper crust of this company have played spoiler
  > during the holiday season... Why should this year be any different.?
    
    Actual title of a self-help book for the newly jobless, available at
    the Portsmouth and Exeter NH public libraries:
    
    "Merry Christmas, You're Fired!"

re: .15

Compaq released their *earnings* yesterday too.  Profits doubled over last
year's Q1.  Don't recall their revenues but they indeed grew. 

There are *many* networking types of companies (most of them competitors) who 
are doing very well indeed.  Likewise for companies in the software business.

Defense industries are indeed depressed. Health Care Industries and Financial 
Industries are making money and spending big. Other industries such as 
communications are doing well also.  Hell, even Chrysler is doing good.

You can keep on blaming the global recession but the fact of the matter is, we
favored relatively well during previous recessions and are sucking wind now.

We are simply not providing what customers want.  Like someone said previously
people are voting with their checkbooks.  If we had our act together, we should
be maintaining our market share and growing (at least) at the same pace that 
the worldwide IT market is growing at.  Instead, we keep trying to live off our
installed base which as it shrinks, Digital shrinks.  

    
    
    	re .11
    
    	I heard on at least two different radios stations that a Digital
    	spokesman said that layoffs will continue. This was yesterday,
    	as part of the Q1 results announcement. Of course, numbers or
    	affected groups was not mentioned.
    
    	Watch VTX LIVEWIRE for the next issue of "As part of our normal
    	business practices, TFSO will continue through Q3..."
    
    	John
    

My boss received an email yesterday announcing the resumption of TFSO for Q2.

It should show up in Livewire today I suspect.

4 weeks base and 1 week for every year.  Lump sum payment.

RE: .21

Quite agree with your here. We are in the midst of technological change. Those
organizations which have recognized that can do no wrong (Compaq, Novell, 
Microsoft, CISCO, Intel, ...).  Those that are standing around and waiting 
wheel of technology to turn full circle are shrinking.

Having said that, I have attended business reviews recently and the general
feeling seems to be that Q1 was an "own goal" for us. That the reorganizations
that took place so demotivated and confused everybody that it is was hardly
surprising it was so bad. Equally, people were of the opinion that the
underlying business climate is improving and that now that sales know
what accounts they're supposed to be selling to that we will have a strong
Q2. Is that a general perception?

Mark

    re .15 "name a computer company rolling in dough", .21
    Compaq's revenues grew to $1.7B from $1.2B (year ago), roughly 40%
    increase.  They're now > 1/2 DEC's revenue.  $1.26/sh income from
    basically just selling PC hardware.  It can be done... with the
    right product, price, and marketing.

Re: .24

I'd like to agree with you but I'm afraid I can't.

Even if we get past all the reorganizations, CBU ramp-ups, VPathons, TFSOs,
and then somehow improve morale; where are the products which have equivalent
demand in the market place (to those of Cisco, Novell, Microsoft, Intel, Compaq)
that are going to enable us to show a strong and growing Q2?

    >that are going to enable us to show a strong and growing Q2?
    
    Alpha ?
    
    \nasser

    
    re:-1
>Even if we get past all the reorganizations, CBU ramp-ups, VPathons, TFSOs,
>and then somehow improve morale; where are the products which have equivalent
>demand in the market place (to those of Cisco, Novell, Microsoft, Intel, Compaq)
>that are going to enable us to show a strong and growing Q2?
    
    How about TeamLinks v2.0 coming out later this year.
    
    Quote from BOEING on External Field Test 1
    
    "Beats the hell out of MS MAIL "
    
    Just because we don't market things doesn't mean they're bad.
    
    Mike
    

    >Just because we don't market things doesn't mean they're bad.
    
    but we (DECeees all know that).
    
    now, how does the customer know that if you dont market them?
    
    this sounds like catch 20/20, who came first the egg or the chicken ?
    
    \nasser

re Note 2727.28 by IOSG::BILSBOROUGH:

>     How about TeamLinks v2.0 coming out later this year.
>     
>     Quote from BOEING on External Field Test 1
>     
>     "Beats the hell out of MS MAIL "
>     
>     Just because we don't market things doesn't mean they're bad.
  
        And hasn't TeamLinks been relegated to a non-strategic
        position in deference to LinkWorks (the former ObjectWorks)?

        Bob

re Note 2727.22 by ICS::SOBECKY:

>     	I heard on at least two different radios stations that a Digital
>     	spokesman said that layoffs will continue. 

        On a radio news program yesterday I heard Bill Steul saying
        that the layoffs this year will probably stay below last
        year's level of 15K.

        Bob

    re: last few
    
    Alpha is good technology.  As far as showing some strong revenue
    potential in Q2, I don't see it. The applications are just not there
    yet.  High volume can only be achieved by having a lot of applications.  
    
    Teamlinks, I don't know the specifics of this product but I'll throw
    three things out for discussion.  
    
    1) If this product needs to be used in concert with a VAX, forget about 
    selling it outside of the installed base. It has to play on NetWare or
    it doesn't even have a chance.
    
    2) If we don't advertise it, people won't know about it and will
    likely continue to use MS or cc:Mail.
    
    3) If we don't figure out which products are strategic and which are
    not, you are going to perpetuate the confusion in the sales force and
    the market as a whole.  We've waffled on a number of strategies and
    kept products that we shouldn't have. 
    
    This confuses our sales force, customers, and industry analysts.  We
    have lost a lot of credibility, our customer's trust, and the ability 
    to set direction. 
    
    The other side effect to this is that we're doing so many things, no
    one thing really comes out good.   
    
    We still have a s%$#load of very talented engineers. If we could focus
    our engineering organization on building products that customers want
    we could come out of this.
    
    Here's a few of my suggestions for some kickass products and for
    getting them launched into the market.
    
    	1) Get Netware running lightning fast on Alpha ASAP!. Version 3
    would be fine.  It must be native or running under OSF/1. Then publish
    some benchmarks against equivalently priced Compaq and HP boxes. 
    
    	2) Build some excellent Intel-based PCs (desktop, server, and
    portables). Price them dirt cheap. Take the first 500 off the line,
    pack them with memory and disk and give one to every CIO of the 500
    largest companies in the world.  
    
    We need to get into the top tier of Intel's buyers along with IBM,
    and Compaq.  The only way we can do this is to increase our volume
    significantly.  Hell, maybe we should put our chip manufacturing to
    work by being a second source for Intel chips.   
    
    	3) Downsize our clustering and disk shadowing expertise to the LAN
    server.  We invented it, we can do it best.  Don't forget about UNIX
    clustering too.
    
    	4) Build more modules for the DEChub 900 including some router-based
    products which run Cisco software.  The DEChub 900 is good stuff. It
    needs to be marketed more however.  The Management software should also
    be integrated with HP Openview and Sun Net Manager.
    
    	5) Launch a major initiative to get every worthwhile piece of UNIX
    software ported to OSF/1.  Take the top 10 or 20 software applications,
    optimize them for OSF/1, and give free 90-day evaluation units to each 
    of their 5 or 10 biggest customers.
    
    	Before anyone comes back and says, Oh yeah, we're already doing
    this and that and it will be available in QnFY9n, don't waste the time
    writing about it in here. Remember the Nike slogan; "Just Do It!"
    
    	Time is of the essence.  Our competition is HP, Compaq and Sun to a
    lesser extent.  Companies growing at a 48% rate in a market growing  at
    a rate far less than 48% are doing so by taking business away from their
    competitors.  We are not the Red Cross!  We gave away $300M+ of revenue
    in Q1.  It's time to stop giving away and start taking back.
    
    		

    re:-1
    
    I agree completly.
    
    I wonder thought if giving away a PC will look like an act of
    desperation or eagerness?  
    
     re: Bob,
    
    Yes, LinkWorks is being emphasised as it's planned to be on many
    platforms, but as long as we can sell TeamLinks to lots of the
    ALL-IN-1 installed base I'll be very happy.
    
    Mike  

    'Scuse an ignorant Brit, but can anybody please expand the acronym
    TFSO. Over here we call it "Rightsizing" as far as I'm aware. The only
    explaination for TFSO that comes readily to my mind is that employees
    are being
    
    		Told Firmly "S*d Off"
    
    	But I'm sure there must be another interpretation!!
    
    Thanks,
    
    Steve
    

    RE-1
    
    TFSO(The financial Support option)
    
    This settup is mostly only effective in the states. I surely would like
    to know the Euro-version of it. (More text deleted cuz of the fear.....
    ....)
    
    Jan. 

    Can't remember exactly what the details currently are, but the original
    package was something like
    
    			3 month's money
    		+	1 month's money/year of service
    		+	3 month's money if you volunteered to take this
    			package
    
    	The three month's money for volunteering has now disappeared and
    there have been several widely publicised attempts to reduce the
    package even further. As far as I am aware, however, (and unlike the
    USA) these attempts to reduce the package have been quietly dropped as
    they have come up against various pieces of UK or EEC law.
    
    NB This info is all off the top of my head and I'd be grateful if any
    UK/Euro-based reader who knows better would make the necessary
    corrections.
    
    Steve
    

    re .34
    
    	TFSO :== Thanks For Shoving Off

The correct translation is:

	Transition Financial Support Option

	The resumption of the program was announced to the general 
	public yesterday for US employees.

	4 weeks pay plus 1 week for every year of service lump sum.

	Minimum severance 8 weeks pay.

	Continuation of medical, dental, and life insurance coverage 
	for a period represented by the total payments.

	Outplacement assistance for 6 months.

	Acceleration of stock options.  - This is a real benefit - NOT!

	TFSO:==  The F!@#$%& Show's Over

    >  TFSO:==  The F!@#$%& Show's Over
    
    OMIGOD !
    
    

    re .15
    >ODIXIE::RHARRIS  (related to Jack Smith somehow? ;-)
    >Name a computer company rolling in dough
    
    Besides Compaq posting a 40% increase in revenue and a nice profit
    on Wednesday, today SGI(+MIPS) announced a 31% increase in revenue
    and a nice profit.
     

    Computer Associates (they are in the same software business that NSM is
    getting out of) announced results yesaterday. Their net income nearly
    doubled.

    I just read that SGI (the outfit that bought MIPS) just cut a deal
    with Nintendo to provide the base chip for the generation of games
    they will be making, where was Alpha in this contest?

    	Re. -1...When people are ready to buy $1500 video game systems,
    we'll be ready with Alpha.