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351 471 1723 (Until recently, Digital Equipment Corporation \(DEC\) was the second largest computer) 1723 SB
351 530 1674 (vendor in the world, behind IBM. DEC offered a unique new way to do computing:) 1674 SB
351 589 1661 (Instead of massive, multi-million dollar mainframes behind a glass wall, why not put) 1661 SB
351 648 1732 (computing power in front of people where they could use it? Ken Olsen and this vision) 1732 SB
351 707 1269 (led DEC to an unprecedented 30+ years of phenomenal growth.) 1269 SB
351 799 1686 (For an order of magnitude less than the cost of a typical mainframe, DEC could offer) 1686 SB
351 858 1734 (minicomputers and networks to match or exceed nearly all the mainframe\222s capabilities.) 1734 SB
351 917 1678 (DEC pioneered commercial computer networks, distributed processing, client/server) 1678 SB
351 976 1718 (applications, clustering technology, highly available systems, and a whole host of other) 1718 SB
351 1035 716 (information technology innovations.) 716 SB
351 1127 1787 (By 1987, DEC could do no wrong. Yet, by mid 1994, DEC\222s very survival as an ongoing) 1787 SB
351 1186 1759 (company is questionable. What happened? Why did it happen? Can DEC stop its death) 1759 SB
351 1245 435 (spiral and, if so, how?) 435 SB
351 1337 1744 (As a long time software consultant and DEC employee from 1981 through early 1994, I) 1744 SB
351 1396 1752 (am shocked and saddened by DEC\222s deteriorating situation in mid 1994. It did not have) 1752 SB
351 1455 290 (to be this way.) 290 SB
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351 421 1178 (September, 1987, DECworld, Boston World Trade Center:) 1178 SB
351 513 1729 (Boston\222s World Trade Center is an ideal location for a major industry exhibit. Situated) 1729 SB
351 572 1745 (just across Boston Harbor from Logan Airport, visitors can fly to Logan, take the water) 1745 SB
351 631 1777 (shuttle from the airport to the trade center and the exhibit, and fly out that night. Visiting) 1777 SB
351 690 1781 (executives can also stay in one of several nearby hotels for extended visits and enjoy all of) 1781 SB
351 749 1488 (Boston\222s amenities. Rifkin and Harrar described the 1987 DECworld best:) 1488 SB
426 841 1710 (They called it DECworld, a single company exposition designed to show off the might) 1710 SB
426 900 1721 (of the second most powerful company in the computer world. True to its name, it was) 1721 SB
426 959 1630 (a world unto itself. Boats, planes, helicopters, buses, and limousines criss-crossed) 1630 SB
426 1018 1700 (Boston, bringing 50,000 people to the World Trade Center to see DEC\222s product line) 1700 SB
426 1077 509 (and hear DEC\222s message.) 509 SB
426 1169 1673 (The QEII and the Oceanic, the world\222s two largest cruise ships, sat docked amid the) 1673 SB
426 1228 1605 ($1 million pilings DEC had hastily built to accommodate them. The ships were a) 1605 SB
426 1287 1655 (glitzy, yet practical, solution to the lack of hotel rooms. Boston had never hosted a) 1655 SB
426 1346 361 (conference so big.) 361 SB
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351 1497 1738 (success. For a brief period, DEC ruled the computing community. Analysts at the time) 1738 SB
351 1556 1738 (stumbled all over themselves predicting a rosy future ahead; some predicted 20 percent) 1738 SB
351 1615 1667 (compounded growth for the next 5 years. Jack Shields, then head of DEC sales and) 1667 SB
351 1674 1679 (service, printed up party invitations for July 10, 2007, the predicted date when DEC) 1679 SB
351 1733 579 (would pass IBM in revenues.) 579 SB
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351 1825 1716 (Those were heady times. We offered products no other vendors could build, we knew) 1716 SB
351 1884 1647 (more about software development and project management than anyone. We were) 1647 SB
351 1943 1754 (\223right\224, everyone else was \223wrong\224. We were smarter, more healthy, and better looking) 1754 SB
351 2002 1706 (than anyone else, and we were not shy about telling everyone within earshot. In other) 1706 SB
351 2061 1009 (words, we became too arrogant for our own good.) 1009 SB
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351 2212 1793 (customers. It showed a picture of a baby, frowning, with the middle finger extended. The) 1793 SB
351 2271 1763 (picture looked like the baby was giving the photographer \223the finger.\224 The caption read,) 1763 SB
351 2330 1715 (\223Figure 1\224. After the picture and caption came several customer satisfaction scenarios) 1715 SB
351 2389 1742 (with humorous parodies on how to handle the situations. Each ended with the solution,) 1742 SB
351 2448 987 (\223See figure 1.\224 Finally, the memo ended like this:) 987 SB
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390 2674 1749 (George Harrar, Prima Publishing and Communications, 1988, updated 1990, page 1. Although I did not attend the) 1749 SB
390 2720 1721 (1987 DECworld, I attended subsequent events in 1990 and 1992. These shows were every bit as glitzy as Rifkin) 1721 SB
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363 2837 744 ( \223Digital - The Next Generation\224, Glenn Rifkin, ) 744 SB
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363 2908 941 ( I was there and just as arrogant as everyone else inside DEC.) 941 SB
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426 278 1721 (This isn\222t Burger King and you don\222t get it your way. You get it our way or not at all,) 1721 SB
426 337 1027 (because we\222re Digital and you\222re not! See figure 1.) 1027 SB
351 429 1797 (Most of us officially frowned on this memo - but most of us also kept a secret copy hidden) 1797 SB
351 488 1786 (away someplace. And sometimes we really felt and acted this way towards our customers) 1786 SB
351 547 1677 (and partners. After all, we made better computers than anybody else in the world --) 1677 SB
351 606 680 (where else were they going to go?) 680 SB
351 698 1367 (This attitude, top to bottom, contributed mightily to DEC\222s undoing.) 1367 SB
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550 815 701 (oduct history and milestones) 701 SB
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351 901 1742 (The story of DEC and Ken Olsen is well documented. The following paragraphs briefly) 1742 SB
351 960 1289 (summarize some of DEC\222s milestones since its founding in 1957:) 1289 SB
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1640 954 16 (4) 16 SB
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351 1052 185 (PDP-1 --) 185 SB
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536 1053 1444 ( DEC\222s first computer in 1959. Rather than using the intimidating name,) 1444 SB
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351 1112 214 (computer, ) 214 SB
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565 1112 540 (Olsen called this product a ) 540 SB
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1105 1112 782 (Programmable Data Processor \(PDP\).) 782 SB
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1887 1112 230 ( ;Since this) 230 SB
351 1171 1772 (was the first one, it was the PDP-1. It featured a cathode-ray tube and keyboard, making) 1772 SB
351 1230 1782 (it the first commercially available, interactive, general-purpose computer. It was priced at) 1782 SB
351 1289 541 ($120,00 and 53 were sold.) 541 SB
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351 1381 138 (PDP-6) 138 SB
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489 1382 1522 ( --DEC\222s first large system, introduced in 1964, and sold for $300,000. This) 1522 SB
351 1441 1770 (system pioneered the concept of timesharing, but was simply too big for DEC to produce) 1770 SB
351 1500 1582 (at the time. Only 23 were sold and the product was killed soon after its release.) 1582 SB
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351 1592 138 (PDP-8) 138 SB
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489 1593 1636 ( -- Triggered the minicomputer industry. First introduced in 1965 and priced at an) 1636 SB
351 1652 1740 (unheard-of $18,000, the PDP-8 carried DEC into the ranks of major computer vendors.) 1740 SB
351 1711 894 (DEC eventually sold more than 50,000 units.) 894 SB
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351 1803 149 (PDP-X) 149 SB
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500 1804 1650 ( -- The code name for the follow-on machine to the PDP-8, this machine was never) 1650 SB
351 1863 1680 (built. Edson de Castro, one of the lead designers, left DEC in 1967 and started Data) 1680 SB
351 1922 738 (General with a variant on this design.) 738 SB
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351 2014 163 (PDP-11) 163 SB
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514 2015 1538 ( -- introduced in 1970, DEC eventually sold 250,000 units of various PDP-11) 1538 SB
351 2074 1030 (models. DEC still sells models of PDP 11s in 1994.) 1030 SB
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351 2166 234 (VAX/VMS) 234 SB
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585 2167 1366 ( -- First unveiled in 1977, VAX/VMS set the standard for distributed) 1366 SB
351 2226 1707 (computing through most of the 1980s. VAX/VMS eventually allowed DEC to mount) 1707 SB
351 2285 1751 (credible challenge to IBM. By late 1987, DEC gained significant market share at IBM\222s) 1751 SB
351 2344 171 (expense.) 171 SB
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351 2436 144 (VT100) 144 SB
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495 2437 1629 ( -- Introduced in 1978, this computer terminal spawned an entire terminal industry) 1629 SB
351 2496 1747 (as orders exceeded forecasts by huge margins and lead times stretched to more than one) 1747 SB
351 2555 1778 (year. Its elegant styling and ergonomic keyboard drove it to become an industry standard) 1778 SB
351 2614 1749 (even to this day. The VT200, VT300, VT420, and VT510 series terminals followed the) 1749 SB
351 2673 155 (VT100.) 155 SB
351 2848 390 ( ) 390 SB
741 2848 221 ( ) 221 SB
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351 2902 12 (4) 12 SB
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363 2908 10 ( ) 10 SB
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373 2907 412 (The Ultimate Entrepreneur) 412 SB
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351 127 216 (Scott Consulting) 216 SB
1630 127 521 (internet: 72102.136@CompuServe.com) 521 SB
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2126 3069 25 (7) 25 SB
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351 278 433 (Personal Computers) 433 SB
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784 279 1222 ( -- The Pro 325 and Pro 350, DECmate II, and Rainbow 100,) 1222 SB
351 338 1769 (launched in 1982 were failures. The Pro series software was ahead of its time and placed) 1769 SB
351 397 1705 (too much burden on the underlying PDP-11 hardware platform. The DECmate II and) 1705 SB
351 456 1763 (Rainbow 100 systems were technical successes but market flops. They failed due to lack) 1763 SB
351 515 1691 (of application software and DEC marketing blunders. The VAXmate, an Intel 80286) 1691 SB
351 574 1742 (machine introduced in 1986, also failed to take off. It lacked many standard capabilities) 1742 SB
351 633 1795 (for standard clone PCs and was overpriced. In 1989, DEC began remarketing Tandy PCs,) 1795 SB
351 692 1751 (to limited demand. The DEC PCs were overpriced and behind the technology curve. In) 1751 SB
351 751 1719 (1991, DEC opened a 1-800 PC telephone ordering service modeled after Dell. By late) 1719 SB
351 810 1736 (1991 and early 1992, DEC began building its own PCs and cut its prices to near market) 1736 SB
351 869 1697 (levels. Sales started to increase and, by mid 1994, DEC is beginning to overcome the) 1697 SB
351 928 1282 (stigma from the early 80s and is emerging as a major PC vendor.) 1282 SB
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351 1020 163 (Storage) 163 SB
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514 1021 1629 ( -- DEC first began building its own disk drives in earnest in the early 1980s. This) 1629 SB
351 1080 1719 (was a fiasco as quality problems appeared all over the place with the early RAxx disks.) 1719 SB
351 1139 1748 (After 2 or 3 years, DEC fixed its manufacturing processes and quality improved. But as) 1748 SB
351 1198 1755 (DEC storage devices acquired a reputation for reliability, they also acquired a reputation) 1755 SB
351 1257 1695 (for being slow and overpriced. Third party storage vendors wreaked havoc in DEC\222s) 1695 SB
351 1316 1619 (installed base. Finally, by 1992, DEC storage made a gutsy decision to change its) 1619 SB
351 1375 1738 (direction. They canceled their big, proprietary disks and began to concentrate on small,) 1738 SB
351 1434 1756 (standardized SCSI disks. By 1994, DEC storage devices are competitive with anyone in) 1756 SB
351 1493 1770 (the market on price, performance, and reliability. DEC StorageWorks devices are widely) 1770 SB
351 1552 1183 (acclaimed as innovative, inexpensive, intelligent controllers.) 1183 SB
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351 1669 494 (Seeds of destruction) 494 SB
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351 1780 413 (Abandoned markets) 413 SB
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351 1856 1663 (Sometime in 1985, the senior managers at DEC decided to abandon their traditional) 1663 SB
351 1915 1781 (market of engineering, manufacturing, and technical customers in favor of the commercial) 1781 SB
351 1974 1709 (data center. The technical market was messy, difficult to support, and filled with third) 1709 SB
351 2033 1660 (party devices that interfered with the purity of DEC\222s computing environment. The) 1660 SB
351 2092 1787 (commercial data center market, the traditional IBM stronghold, was flush with money and) 1787 SB
351 2151 1755 (people eager to spend it. But this new market meant a fundamental shift in DEC\222s focus) 1755 SB
351 2210 774 (and would eventually prove disastrous.) 774 SB
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1125 2204 16 (5) 16 SB
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351 2327 408 (Closed Architecture) 408 SB
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351 2403 1624 (With the PDP-11 in the 1970s, DEC pioneered the Unibus, an open computer bus) 1624 SB
351 2462 1769 (architecture. With this open bus, third parties could build interface equipment to connect) 1769 SB
351 2521 1614 (factory automation machines, sensors, and other intelligent devices directly to the) 1614 SB
351 2580 1692 (computer. DEC actively encouraged third parties to build these devices because they) 1692 SB
351 2756 390 ( ) 390 SB
741 2756 221 ( ) 221 SB
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351 2810 12 (5) 12 SB
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363 2816 1715 ( Address by Don Harbert, then manager of DEC VMS Engineering, to the VMS Partners, a group of senior DEC) 1715 SB
390 2862 1672 (field software consultants, March 1992 VMS Partner meeting, Nashua, New Hampshire. As a member of the) 1672 SB
390 2908 512 (VMS Partners group, I was there.) 512 SB
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1630 127 521 (internet: 72102.136@CompuServe.com) 521 SB
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2126 3069 25 (8) 25 SB
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351 278 1777 (spawned PDP-11 sales. DEC\222s first VAX products also had Unibuses and eventually lots) 1777 SB
351 337 434 (of third party devices.) 434 SB
351 429 1665 (By 1985, the Unibus was obsolete and DEC introduced the BI bus in its latest VAX) 1665 SB
351 488 1786 (systems. But just as vendors made plans to introduce new interface modules, DEC closed) 1786 SB
351 547 1625 (the BI bus. DEC announced they would sue anybody who marketed a device that) 1625 SB
351 606 1766 (connected to the BI bus unless that company signed an agreement with DEC. Ken Olsen) 1766 SB
351 665 1708 (defended this strategy: \223We spent millions developing this bus. I don\222t know why we) 1708 SB
351 724 395 (didn\222t do it before.\224) 395 SB
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746 718 16 (6) 16 SB
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762 724 1326 ( This strategy infuriated many previously loyal DEC VARs \(Value) 1326 SB
351 783 1661 (Added Resellers\), many of whom began shopping for another computer vendor as a) 1661 SB
351 842 1738 (partner. It also infuriated end user customers, who believed they were being gouged by) 1738 SB
351 901 205 (this move.) 205 SB
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351 1018 611 (Restrictive Business Practices) 611 SB
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351 1094 1671 (DEC changed several other business practices during this period. For example, they) 1671 SB
351 1153 1792 (decreed that software licenses would no longer transfer to the new owner when somebody) 1792 SB
351 1212 1798 (sold a used piece of equipment. This meant, every time a transaction occurred on the used) 1798 SB
351 1271 1776 (hardware market, the end user would need to buy new software licenses from DEC. This) 1776 SB
351 1330 1652 (policy further infuriated customers and resellers. DEC eventually rescinded the no-) 1652 SB
351 1389 1722 (transfer policy for operating systems. However, typical of DEC business practices, the) 1722 SB
351 1448 1734 (devil is in the details. DEC kept the policy in force for layered products -- even layered) 1734 SB
351 1507 1655 (products required for the hardware to work. This meant that DEC demanded - and) 1655 SB
351 1566 1145 (usually got -- a piece of every used equipment transaction) 1145 SB
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1496 1560 16 (7) 16 SB
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351 1683 274 (Hiring Binge) 274 SB
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351 1759 1769 (DEC went on a hiring binge in the late 1980s. Since DEC was going to replace IBM and) 1769 SB
351 1818 1662 (own the data centers of every major corporation in the world, DEC needed industry) 1662 SB
351 1877 1728 (experts for every major industry in the world. For example, to sell to paper mills, DEC) 1728 SB
351 1936 1691 (needed consultants who knew paper mills forwards and backwards. To sell to banks,) 1691 SB
351 1995 1779 (DEC needed bankers. The employee population exploded, along with SG&A expense, as) 1779 SB
351 2054 1739 (DEC hired field sales consultants and layer after layer of administrative staff. Sales also) 1739 SB
351 2113 749 (increased, but not as fast as expenses:) 749 SB
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gs 1691 102 328 2203 CB
759 2205 829 (DEC Expense Growth, 1986-1989) 829 SB
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gs 767 92 328 2305 CB
660 2307 104 (Year) 104 SB
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gs 225 92 1095 2305 CB
1159 2307 100 (1986) 100 SB
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gs 233 92 1320 2305 CB
1388 2307 100 (1987) 100 SB
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gs 232 92 1553 2305 CB
1620 2307 100 (1988) 100 SB
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gs 233 92 1785 2305 CB
1853 2307 100 (1989) 100 SB
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gs 767 92 328 2397 CB
499 2399 426 (Employee Population) 426 SB
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gs 225 92 1095 2397 CB
1140 2399 138 (88,300) 138 SB
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gs 233 92 1320 2397 CB
1356 2399 163 (103,000) 163 SB
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gs 232 92 1553 2397 CB
1588 2399 163 (113,900) 163 SB
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1821 2399 163 (118,400) 163 SB
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351 2501 390 ( ) 390 SB
741 2501 221 ( ) 221 SB
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351 2555 12 (6) 12 SB
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363 2561 1515 ( This was one of Ken Olsen\222s most famous remarks and was widely quoted in the press at the time.) 1515 SB
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351 2626 12 (7) 12 SB
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363 2632 1760 ( DEC continues this absurd policy even in mid 1994. I recently looked into purchasing a used VAXstation 4000-60) 1760 SB
390 2678 1729 (from a DEC customer for my business. Selling price would be around $2000 for the vintage 1991 hardware. But) 1729 SB
390 2724 1709 (in order for DEC to bless the sale, I would need to pay DEC $300 to transfer the VMS operating system license,) 1709 SB
390 2770 1761 (and $2000 for a NAS-250 license. The existing NAS 250 license would become null and void. Since the NAS-250) 1761 SB
390 2816 1713 (license includes the windowing software required to run the workstation, DEC\222s policy effectively prevented me) 1713 SB
390 2862 1643 (from buying this equipment for a reasonable price. The customer eventually sold the equipment on the open) 1643 SB
390 2908 1665 (market, likely to a broker. The broker will either sell the equipment for parts, or resell it on the gray market.) 1665 SB
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gs 767 92 328 276 CB
364 278 697 (SG&A as a percentage of revenues) 697 SB
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gs 225 92 1095 276 CB
1131 278 155 (21.94%) 155 SB
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1360 278 155 (24.00%) 155 SB
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gs 232 92 1553 276 CB
1592 278 155 (26.72%) 155 SB
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1825 278 155 (28.56%) 155 SB
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351 395 254 (Competition) 254 SB
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351 471 1800 (Enter Sun Microsystems. Founded in the early 1980s, Sun marketed a line of UNIX based) 1800 SB
351 530 1622 (workstations. As DEC closed its architecture, tightened its licensing policies, and) 1622 SB
351 589 1784 (alienated its partners and customers, Sun seized its opportunity. As the late 80s unfolded,) 1784 SB
351 648 1702 (\223Open Systems\224 became a popular buzzword across the industry. Sun brilliantly took) 1702 SB
351 707 1764 (advantage of DEC\222s new policies by branding DEC as a closed, proprietary bloodsucker.) 1764 SB
351 766 881 (Sun\222s sales took off, at the expense of DEC.) 881 SB
351 858 1748 (In late 1988, IBM introduced its AS/400 systems after more than a year of rumors. The) 1748 SB
351 917 1747 (AS/400 went on to generate roughly $14 billion in annual revenue for IBM -- more than) 1747 SB
351 976 1760 (all of DEC\222s revenue, company wide. This stopped DEC\222s inroads into IBM\222s midrange) 1760 SB
351 1035 366 (market share cold.) 366 SB
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351 1152 380 (VAX 9000 Failure) 380 SB
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351 1228 1763 (Meanwhile, as Sun went after DEC at the low end, DEC went after IBM at the high end.) 1763 SB
351 1287 1730 (One product in DEC\222s arsenal was the ill-fated VAX 9000 mainframe. The VAX 9000) 1730 SB
351 1346 1785 (took 7 years and cost around $1 Billion to develop. It started in 1983, when DEC bought) 1785 SB
351 1405 1657 (an equity stake in Trilogy, a company that pioneered multi-chip unit technology. In) 1657 SB
351 1464 1700 (essence, this technology allowed multiple chips in one \223superchip\224, thereby increasing) 1700 SB
351 1523 1757 (speed. The VAX 9000 was supposed to hit the market by late 1989. But it was delayed) 1757 SB
351 1582 1630 (by at least one year, and technical glitches delayed volume shipments even further.) 1630 SB
351 1641 1612 (Ongoing service and support issues also hampered the system and it never sold in) 1612 SB
351 1700 374 (significant volume.) 374 SB
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351 1817 432 (PRISM Cancellation) 432 SB
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351 1893 1794 (By 1988, the VAX architecture was 13 years old and showing its age. Newer RISC based) 1794 SB
351 1952 1596 (architectures from other companies such as HP and Sun promised eventual 100x) 1596 SB
351 2011 1684 (performance improvements over the VAX architecture, and DEC needed a response.) 1684 SB
351 2070 1728 (Dave Cutler, one of the lead VMS architects in the 70s, and his team developed a DEC) 1728 SB
351 2129 1700 (RISC architecture, code named PRISM. They had prototype implementations up and) 1700 SB
351 2188 1650 (running and were close to commercial development when senior DEC management) 1650 SB
351 2247 1742 (suddenly canceled the project. The details on the story are controversial, but the results) 1742 SB
351 2306 1216 (are now well known and would eventually prove devastating.) 1216 SB
351 2398 410 (According to Rifkin:) 410 SB
426 2490 1644 (David Cutler, the software genius who oversaw the development of Digital\222s VMS) 1644 SB
426 2549 1719 (operating system, had set up a group in Bellevue, Wash., to build a RISC-based UNIX) 1719 SB
426 2608 1705 (workstation for the company. Code-named Prism, the group had built prototypes and) 1705 SB
426 2667 1722 (was testing them when Olsen was persuaded to kill the project by Digital\222s West Coast) 1722 SB
426 2726 1665 (workstation group. Instead, Digital should invest in a startup company called Mips,) 1665 SB
426 2785 1718 (sell the RISC-based workstation Mips was building and continue to enhance the VAX.) 1718 SB
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426 278 1657 (A disappointed Cutler left Digital to go to Microsoft, where he has been overseeing) 1657 SB
426 337 602 (development of Windows NT.) 602 SB
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1028 331 16 (8) 16 SB
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351 429 920 (The DEC rumor mill paints a different picture.) 920 SB
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1271 423 16 (9) 16 SB
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1287 429 716 ( According to these sources, Cutler) 716 SB
351 488 1736 (became embroiled in a political battle with Jack Shields, then second in command under) 1736 SB
351 547 1368 (Ken Olsen. Cutler lost, PRISM was canceled, and the rest is history.) 1368 SB
351 639 1776 (Regardless of how it happened, PRISM was canceled, DEC took a 5 percent equity stake) 1776 SB
351 698 1778 (in Mips computer systems, and began to market a line of RISC UNIX workstations based) 1778 SB
351 757 919 (on the Mips R2000 and R3000 series of chips.) 919 SB
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351 874 313 (The stage is set) 313 SB
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351 950 1775 (During all this, DEC saw its most profitable years ever in 1987 and 1988 as it replaced its) 1775 SB
351 1009 1741 (entire VAX line with updated and faster models. Profits in 1987 were $1.1 billion, $1.3) 1741 SB
351 1068 1707 (billion in 1988. Year over year decline began in 1989 and continued through the early) 1707 SB
351 1127 1785 (1990s. Results improved for a few quarters but the general downward trend is continuing) 1785 SB
351 1186 308 (as of mid 1994.) 308 SB
351 1278 1655 (As 1989 opened, DEC was still an extremely profitable company, but threatened by) 1655 SB
351 1337 1760 (competition from all sides. It began marketing its Mips based workstations which, at the) 1760 SB
351 1396 1763 (time, were price and price/performance leaders. VAX sales were still steady but forecast) 1763 SB
351 1455 1629 (to drop. Software, services, and consulting would eventually lead the company as) 1629 SB
351 1514 631 (hardware became a commodity.) 631 SB
351 2777 390 ( ) 390 SB
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363 2837 744 ( \223Digital - The Next Generation\224, Glenn Rifkin, ) 744 SB
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1107 2836 107 (Upside) 107 SB
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1214 2837 577 ( Magazine, September 1992, page 32.) 577 SB
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351 2902 12 (9) 12 SB
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363 2908 1734 ( This is based on conversations with several \223insiders\224 at DEC who would be in a position to know the true story.) 1734 SB
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351 279 1324 (Corporate Management and) 1324 SB
351 397 1423 (Background of Key Principals) 1423 SB
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351 539 1673 (By spring 1994, DEC had 126 vice-presidents by some estimates. The following list) 1673 SB
351 598 1716 (details a few key players currently or recently at DEC\222s helm. In the plots within plots) 1716 SB
351 657 1786 (within plots of DEC power politics, these people may not have been the exclusive players.) 1786 SB
351 716 1318 (But these were the names I heard most often around the company.) 1318 SB
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426 823 36 (\267 ) 75 SB
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501 827 224 (Ken Olsen) 224 SB
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725 828 1292 ( -- DEC founder and CEO until October, 1992. Ken is no longer) 1292 SB
501 887 1607 (formally associated with Digital, although people inside the company still confide) 1607 SB
501 946 186 (with him.) 186 SB
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501 1040 264 (Jack Shields) 264 SB
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765 1041 1298 ( -- Hired in 1961 in the new service organization. Rose to Senior) 1298 SB
501 1100 1627 (vice-president in charge of field sales and service and second in command. Left in) 1627 SB
501 1159 113 (1989.) 113 SB
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741 1254 1389 ( -- Joined DEC as employee number 12 in 1958. Rose to Senior vice-) 1389 SB
501 1313 1603 (president under Ken Olsen. Left in 1993 after Bob Palmer took over. Author of) 1603 SB
501 1372 1582 (absurd penny pinching policies and proposals, including canceling water coolers) 1582 SB
501 1431 1535 (and magazine subscriptions, and attempting to change payroll from weekly to) 1535 SB
501 1490 189 (biweekly.) 189 SB
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501 1584 249 (Win Hindle) 249 SB
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750 1585 1340 ( -- Another 30+ year DEC veteran, by mid 1994 is vice-president in) 1340 SB
501 1644 1625 (charge of ethics. Largely perceived by the rank and file inside DEC as ineffective.) 1625 SB
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501 1738 280 (Bill Strecker ) 280 SB
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781 1739 1307 (-- Chief technologist. Strecker was a brilliant engineer and one of) 1307 SB
501 1798 1533 (the original VAX designers. Somewhere along the way, he became arrogant.) 1533 SB
501 1857 1586 (Strecker addressed the VMS Partners in April, 1991 and at least one member of) 1586 SB
501 1916 1603 (the audience found him to be arrogant and largely ignorant of the evolving world) 1603 SB
501 1975 1635 (around him. His technology strategy is still controversial; some like it, some don\222t) 1635 SB
501 2034 719 (like it, many don\222t know what it is. ) 719 SB
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501 2128 283 (Bill Demmer ) 283 SB
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784 2129 1331 (-- vice-president in charge of Alpha and VAX systems. In essence,) 1331 SB
501 2188 1528 (this means Bill is in charge of all Digital hardware development. Bill lead the) 1528 SB
501 2247 1623 (controversial charge to publicize DEC\222s alpha RISC technology in 1991 and early) 1623 SB
501 2306 1625 (1992, before it was publicly announced. Some say these early speeches hurt DEC) 1625 SB
501 2365 1499 (by revealing future plans. Others believe it was important to reveal a future) 1499 SB
501 2424 1582 (direction so customers would believe DEC at least had a strategy for the future.) 1582 SB
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426 2514 36 (\267 ) 75 SB
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501 2518 288 (Don Harbert ) 288 SB
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789 2519 1257 (-- by mid 1994, vice-president of Operating Systems. Don is in) 1257 SB
501 2578 1411 (charge of VMS, OSF/1 \(DEC UNIX\) and DEC Windows NT software) 1411 SB
501 2637 1620 (engineering. Don is straightforward and blunt in presentations. Some see Don as) 1620 SB
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375 2791 1670 ( I met with Ken in March, 1993 to discuss some issues. I have also had conversations with other people who) 1670 SB
390 2837 1573 (discuss DEC\222s situation with him. Although he will deny it, Ken Olsen is still very much part of DEC.) 1573 SB
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375 2908 1437 ( This is based on my personal observations and conversation with people around the company.) 1437 SB
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501 278 1597 (an ineffective leader with no ability to inspire. Others appreciate his straight talk) 1597 SB
501 337 600 (and apparent candor in public.) 600 SB
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501 431 266 (Bob Supnik ) 266 SB
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767 432 1378 (-- vice-president in charge of getting alpha to market. Bob is popular) 1378 SB
501 491 1582 (with rank and file DEC employees because he regularly mixes it up in electronic) 1582 SB
501 550 1534 (conferences. Bob also regularly appears in front of DEC employee groups to) 1534 SB
501 609 493 (explain product strategy.) 493 SB
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501 703 252 (Bob Palmer) 252 SB
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753 704 1304 ( -- DEC CEO as of October, 1992. Left Texas Instruments in the) 1304 SB
501 763 1552 (1970s to start Mostek, a memory chip company. United Technologies bought) 1552 SB
501 822 1600 (Mostek a few years later. Bob took a job with DEC in 1985 as vice-president of) 1600 SB
501 881 1603 (manufacturing. Tapped by the DEC Board of Directors to succeed Ken Olsen in) 1603 SB
501 940 1603 (July, 1992. Widely acclaimed as a take-charge manager when promoted, but has) 1603 SB
501 999 1543 (so far failed to deliver results. Some complained early on because he failed to) 1543 SB
501 1058 1567 (appear live before employee groups and field ad-hoc questions. Bob set up the) 1567 SB
501 1117 1549 (business unit structure in late 1992 and early 1993. It fell apart by early 1994.) 1549 SB
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426 1207 36 (\267 ) 75 SB
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501 1211 259 (Ed Lucente ) 259 SB
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760 1212 1201 (-- Hired by Bob Palmer in early 1993 to head DEC sales and) 1201 SB
501 1271 1590 (marketing world-wide. Ed was a long time IBM sales rep and manager. He left) 1590 SB
501 1330 1524 (IBM to become executive vice-president for sales and marketing at Northern) 1524 SB
501 1389 1621 (Telecom for 2 controversial years. He was fired from DEC in April, 1994, after a) 1621 SB
501 1448 1556 (disastrous 9 months of FY 1994, especially the third quarter. Some liked Ed\222s) 1556 SB
501 1507 1432 (take-charge attitude, others found his abrasive management style to be a) 1432 SB
501 1566 205 (hindrance.) 205 SB
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706 1560 32 (12) 32 SB
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501 1660 401 (Gresham Brebach ) 401 SB
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902 1661 1232 (-- Hired by Bob Palmer in 1992 from McKinsey Consulting to) 1232 SB
501 1720 1641 (lead Digital Consulting. By early 1994, has not delivered results in this business as) 1641 SB
501 1779 1494 (morale at the grass roots continues to deteriorate. In a booming consulting) 1494 SB
501 1838 1360 (market, Digital Consulting is one of DEC\222s biggest disappointments.) 1360 SB
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426 1928 36 (\267 ) 75 SB
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501 1932 294 (Russ Gullotti ) 294 SB
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795 1933 1298 (-- Long time DEC veteran, Russ replaced Don Zereski as head of) 1298 SB
501 1992 1536 (U.S. field operations. By mid 1994., he is head of all Sales and Service in the) 1536 SB
501 2051 1064 (\223Americas Zone\224, essentially the western hemisphere.) 1064 SB
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501 2145 272 (Don Zereski ) 272 SB
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773 2146 1261 (-- Replaced Dave Grainger as head of U.S. Sales and Service in) 1261 SB
501 2205 1144 (1991. He was fired in 1993 for failing to deliver a profit..) 1144 SB
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501 2299 329 (Dave Grainger ) 329 SB
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830 2300 1263 (-- Was put in charge of U.S. Sales and Service in 1989 after the) 1263 SB
501 2359 1598 (U. S. slid into the red after 1987. He was fired in 1991 after a rumored fist-fight) 1598 SB
501 2418 705 (with Zereski in the Mill parking lot.) 705 SB
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375 2653 1776 ( \223Striving to adapt: At Digital Equipment, A Resignation Reveals Key Problem: Selling\224, Wall Street Journal, April) 1776 SB
390 2699 254 (26, 1994, page 1) 254 SB
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375 2770 1708 ( \223The Mill\224 is the old Maynard Mill, in Maynard Mass, DEC\222s original headquarters. Palmer is moving DEC\222s) 1708 SB
390 2816 1619 (headquarters down the street to a more modern building. The fist-fight was widely reported inside DEC\222s) 1619 SB
390 2862 1631 (electronic rumor mill, but Grainger and Zereski deny it. However, after several meetings with Zereski and) 1631 SB
390 2908 962 (witnessing his temper first hand, the fist-fight story is credible.) 962 SB
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501 280 342 (Enrico Pesatori ) 342 SB
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843 281 1307 (-- Recruited from Zenith Data Systems, Enrico is now head of the) 1307 SB
501 340 1634 (DEC PC business. After successfully building the PC business, Enrico was tapped) 1634 SB
501 399 1641 (to fill Lucente\222s former position as head of DEC Sales and Marketing. After being) 1641 SB
501 458 1609 (a laughingstock in the industry, DEC\222s PC business is one of the few bright spots) 1609 SB
501 517 249 (in mid 1994.) 249 SB
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501 611 320 (Charlie Christ ) 320 SB
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821 612 1194 (-- vice-president and head of the Storage Business Unit. He) 1194 SB
501 671 1562 (successfully lead the storage group through the painful transition to small, fast,) 1562 SB
501 730 1638 (open products. DEC\222s storage business was also a laughingstock through the 80s,) 1638 SB
501 789 890 (and one of the few bright spots by mid 1994.) 890 SB
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351 279 980 (Description of Crisis) 980 SB
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351 421 1711 (Some call it a paradigm shift. Some call it an economic crisis. Whatever the name, by) 1711 SB
351 480 1735 (1989, the rate of change in the economics of the computer industry accelerated as rapid) 1735 SB
351 539 1734 (innovation and new technology introductions forced prices through the floor. Consider) 1734 SB
351 598 566 (these jargon-filled examples:) 566 SB
351 690 1719 (In mid 1994, I can buy an IBM compatible PC with 50-60 times the CPU power of the) 1719 SB
351 749 1696 (original DEC VAX 11/780, 24 MB memory, 1 GB of disk space, 600 MB CD-ROM,) 1696 SB
351 808 1649 (screaming fast 1024 X 768 resolution color graphics display, for roughly $6000 list) 1649 SB
351 867 98 (price) 98 SB
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481 867 1654 (. For less than $10,000, I can buy a similarly configured RISC system with roughly) 1654 SB
351 926 955 (150 times the CPU power of that original VAX.) 955 SB
351 1018 1787 (The original VAX 11/780 with assorted peripheral devices sold for roughly $500,000. By) 1787 SB
351 1077 1770 (mid 1994, I can buy a low end PC with more disk space and memory, better applications,) 1770 SB
351 1136 782 (and 3 year warranty for roughly $1500.) 782 SB
351 1228 1681 (By mid 1994, people buy computers from warehouse superstores, catalogs, or 1-800) 1681 SB
351 1287 1683 (telephone numbers. Personal computers make up more than half the entire market in) 1683 SB
351 1346 1657 (dollar volume. In 1984, most computers were sold direct from vendors to end-user) 1657 SB
351 1405 1570 (customers with lots of hand-holding. Personal computers were expensive toys.) 1570 SB
351 1497 1764 (In 1994, Microsoft Office, a personal computer software package, lists at Computer City) 1764 SB
351 1556 1646 (Superstore for roughly $500. The product bundles a WYSIWYG word-processor,) 1646 SB
351 1615 1556 (spreadsheet, database, and slide presentation package into a single offering. A) 1556 SB
351 1674 1621 (WYSIWYG \(What You See is What You Get\) word processor allows the user to) 1621 SB
351 1733 1759 (compose a document, complete with graphics, on a computer screen and actually see the) 1759 SB
351 1792 1796 (document on the screen as it will appear when she sends it to her attached laser printer. In) 1796 SB
351 1851 1792 (1984, minicomputer and mainframe based word processing packages alone cost thousands) 1792 SB
351 1910 1774 (and thousands of dollars and offered far fewer capabilities. WYSIWYG did not yet exist.) 1774 SB
351 2002 1747 (As systems become smaller, faster, cheaper, and more powerful, the computer hardware) 1747 SB
351 2061 1797 (and software markets continue to change radically from low volume, high margin products) 1797 SB
351 2120 1679 (to high volume, low margin, commodity products. As this unprecedented revolution) 1679 SB
351 2179 1648 (sweeps the industry, brutal competition forces faster and faster innovation and ever) 1648 SB
351 2238 1622 (shorter product cycles. Vendors who refuse to accept this new paradigm will die.) 1622 SB
351 2297 1219 (Vendors who learn to exploit this new paradigm will prosper.) 1219 SB
351 2389 1646 (DEC was caught flat-footed and arrogant, starting in late 1988, after several wildly) 1646 SB
351 2448 329 (successful years.) 329 SB
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351 2565 410 (Deteriorating Pr) 409 SB
760 2565 418 (ofit \(Loss\) Pictur) 417 SB
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351 2651 1385 (The deteriorating financial picture of the 1990s sums up DEC\222s crisis:) 1385 SB
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375 2816 1707 ( Digital PC Catalog, Spring 1994; see the model DEC PC XL 560 with associated peripheral devices. Note that) 1707 SB
390 2862 1736 (prices are incorrect in this catalog due to a price reduction in March, 1994. I took delivery on this system in May,) 1736 SB
390 2908 502 (1994 for my consulting business.) 502 SB
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351 588 1393 (\(The losses in 1991 and 1992 included massive restructuring charges.\)) 1393 SB
351 680 1757 (As the first three quarters of 1994 unfold, the story gets even bleaker. DEC\222s revenue is) 1757 SB
351 739 1336 (now shrinking as VAX sales decline and Alpha fails to compensate.) 1336 SB
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351 1299 1681 (DEC has had only one profitable quarter since 1991. This occurred in Q4, FY 1993.) 1681 SB
351 1358 1694 (According to statements from DEC senior managers, the U.S. has not been profitable) 1694 SB
351 1417 225 (since 1987.) 225 SB
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351 1509 1726 (In the 1980s, DEC was essentially debt free and boasted of a AAA bond rating. At the) 1726 SB
351 1568 1750 (end of Q3, 1994, Standard and Poors downgraded DEC\222s senior debt again to BBB and) 1750 SB
351 1627 1682 (put the ratings on credit watch with negative implications. Moodys also put the debt) 1682 SB
351 1686 750 (under review for possible downgrade.) 750 SB
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1101 1680 32 (16) 32 SB
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1133 1686 1012 ( In March, the company tried to raise $500 million) 1012 SB
351 1745 1479 (with a preferred-stock issue, but it could find buyers for only $400 million.) 1479 SB
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351 1837 1780 (The only reason DEC is still alive is its strong balance sheet from the 1980s. But many of) 1780 SB
351 1896 1659 (those assets are long gone. The statistics are staggering: From the end of FY 1990) 1659 SB
351 1955 1020 (through the end of Q3 FY 1994, DEC lost roughly ) 1020 SB
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1371 1955 194 ($4 billion) 194 SB
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1565 1955 523 (. Even with these massive) 523 SB
351 2014 1163 (losses, assets still outweigh liabilities by roughly $5 billion.) 1163 SB
351 2106 1764 (The company took a $1.5 billion charge for restructuring reserves in 1992, $1.1 billion in) 1764 SB
351 2165 1617 (1991, and $550 million in 1990. At the end of Q3 1994, only $276 million of this) 1617 SB
351 2224 1630 (restructuring reserve is left. Most analysts believe DEC will need another massive) 1630 SB
351 2283 1727 (restructuring charge in the current quarter of 1994 to cover additional layoffs and plant) 1727 SB
351 2342 172 (closings.) 172 SB
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375 2603 1695 ( Don Zereski, then DEC vice-president of the U.S. Field, in an address to a gathering of DEC field consultants,) 1695 SB
390 2649 1723 (March, 1992. Although unlikely, FY 1993 may have been profitable in the U.S. DEC does not disclose segment) 1723 SB
390 2695 927 (by segment financial data in its public disclosure statements.) 927 SB
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375 2766 757 ( \223Digital Officers Promise Major Restructuring\224, ) 757 SB
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1132 2765 364 (The Wall Street Journal) 364 SB
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1496 2766 554 (, April 18, 1994, pages A3 and A14.) 554 SB
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375 2837 442 ( \223Desperate Hours at DEC\224, ) 442 SB
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817 2836 222 (Business Week) 222 SB
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1039 2837 362 (, May 9, 1994, page 27.) 362 SB
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351 278 1773 (Perhaps even more devastating than the financial statistics is the effect on people, morale,) 1773 SB
351 337 1761 (and self-worth. The first layoffs started in manufacturing in 1990 as DEC began to close) 1761 SB
351 396 1719 (plants. Layoffs hit Minneapolis and other field offices in earnest in July, 1991, again in) 1719 SB
351 455 1795 (October, 1991, and generally once per quarter since then. Before July 1991, the employee) 1795 SB
351 514 1743 (population in Minneapolis was roughly 350. By early 1994, the population was roughly) 1743 SB
351 573 367 (120 and shrinking.) 367 SB
351 665 1707 (Whispered conversations in the hallways, weekly rumors about a massive layoff round) 1707 SB
351 724 1795 (next week, managers who disappear to mysterious, closed-door meetings, hidden agendas,) 1795 SB
351 783 1717 (and plots within plots within plots are now standard operating procedure inside Digital) 1717 SB
351 842 1736 (Equipment Corporation. It is sickening to watch a once mighty company stoop so low.) 1736 SB
351 934 1112 (DEC must return to profitability very soon or it will die.) 1112 SB
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351 279 1198 (Remedial Steps and their) 1198 SB
351 397 634 (effectiveness) 634 SB
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351 572 71 (W) 70 SB
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876 572 439 (ars -- So Far) 435 SB
1311 572 380 (, DEC Lost) 380 SB
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351 684 1767 (The senior managers inside DEC never figured this out, but at the grass roots, we all saw) 1767 SB
351 743 1772 (it coming: The days of the refrigerator sized computers were numbered. The days of the) 1772 SB
351 802 1717 (liquid cooled mainframe were already over, but some people just had not figured it out) 1717 SB
351 861 1673 (yet. Customers would no longer buy a system for the elegant hardware design. The) 1673 SB
351 920 1727 (power in the industry shifted from traditional hardware vendors to application software) 1727 SB
351 979 170 (vendors.) 170 SB
351 1071 1778 (As sales of high margin midrange and high end systems declined, the low end, low margin) 1778 SB
351 1130 1731 (market exploded. New workstations hitting the market packed as much CPU power as) 1731 SB
351 1189 1750 (small mainframes at a fraction of the cost. Local area networks \(LANs\) of workstations) 1750 SB
351 1248 1689 (were more flexible and, under certain conditions, more powerful than any mainframe.) 1689 SB
351 1340 1749 (DEC introduced the DECstation 3100 in early 1989, to rave reviews. DEC\222s first RISC) 1749 SB
351 1399 1564 (UNIX workstation with Mips chips, it sold for roughly $20,000 and packed 10) 1564 SB
351 1458 556 (SPECmarks of CPU power.) 556 SB
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939 1458 1098 ( This was 10 times more powerful than DEC\222s original) 1098 SB
351 1517 1609 ($500,000 VAX 11/780 from 1977 and, for a few short weeks, the most powerful) 1609 SB
351 1576 538 (workstation on the market.) 538 SB
351 1668 1759 (DEC also introduced the VAXstation 3100, a 3 SPECmark VAX/VMS workstation that) 1759 SB
351 1727 1765 (ran the VMS operating system and all its popular applications. Although the VAX could) 1765 SB
351 1786 1710 (not sustain the same speed improvements as RISC based processors, VMS had a huge) 1710 SB
351 1845 1776 (installed base and millions of customers hungry for inexpensive platforms on which to run) 1776 SB
351 1904 40 (it.) 40 SB
351 1996 1716 (DECwindows was a breakthrough software innovation, based on the X-Window work) 1716 SB
351 2055 1774 (from MIT. Unlike traditional computer windowing systems, DECwindows allowed users) 1774 SB
351 2114 1710 (to run applications anywhere on the network to display on their desktop workstations.) 1710 SB
351 2173 1626 (Properly engineered applications could run number-crunching jobs on, say, a Cray) 1626 SB
351 2232 1745 (supercomputer host, and present a point and click graphical user interface to a user on a) 1745 SB
351 2291 1185 (DECwindows workstation on the other end of the network.) 1185 SB
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375 2586 1758 ( The SPEC consortium consists of representatives from computer industry vendors. Its charter: to come up with an) 1758 SB
390 2632 1584 (industry standard method of measuring CPU performance for all vendors. By 1989, SPEC produced the) 1584 SB
390 2678 1733 (SPECmark, an average of 10 benchmarks normalized to the speed of the original VAX 11/780. By definition, the) 1733 SB
390 2724 1715 (VAX 11/780 was a 1 SPECmark machine. A 10 SPECmark machine completed the SPEC benchmarks 10 times) 1715 SB
390 2770 1688 (faster than the VAX 11/780. Before long, all the vendors figured out ways to \221cheat\224, so the SPEC consortium) 1688 SB
390 2816 1609 (updated their suite of benchmarks in 1992. SPEC now publishes 2 numbers: SPECfp92 for floating point) 1609 SB
390 2862 1755 (operations and SPECint92 for integer and other operations. The original SPECmark was renamed SPEC89. SPEC) 1755 SB
390 2908 1428 (no longer sanctions use of the single SPEC89 number because its accuracy was compromised.) 1428 SB
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351 278 1181 (The technology was revolutionary and DEC was there first.) 1181 SB
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351 370 1393 (By mid 1990, DEC was a significant player in the workstation market.) 1393 SB
351 462 1757 (Soon after, the DECstation 5000 and follow-on VAXstation models hit the market. The) 1757 SB
351 521 1795 (new DECstation packed more than 20 SPECmarks of CPU power -- more than double the) 1795 SB
351 580 1768 (original DECstation 3100 and nearly 7 times the original VAXstation 3100 -- for roughly) 1768 SB
351 639 1681 (the same price as the DECstation 3100. Performance eventually doubled on the new) 1681 SB
351 698 941 (VAXstations, from 3 SPECmarks to roughly 6.) 941 SB
351 790 1625 (Storm clouds were gathering. IBM introduced its new POWER architecture. HP) 1625 SB
351 849 1786 (improved its PA-RISC architecture. Sun brought new versions of its SPARC architecture) 1786 SB
351 908 1636 (to market. Before long, HP and IBM were duking it out for bragging rights as the) 1636 SB
351 967 1748 (performance leader, with CPUs at roughly 50 SPECmarks and promises for hundreds of) 1748 SB
351 1026 1745 (SPECmarks in the near future. Suddenly, the DECstation was no longer the leader, and) 1745 SB
351 1085 697 (the VAX was not even in the pack.) 697 SB
351 1177 1695 (DECstation sales never took off, due mostly to lack of application software. Nobody) 1695 SB
351 1236 1768 (from DEC seriously recruited application vendors to port their software to Ultrix, DEC\222s) 1768 SB
351 1295 1746 (UNIX offering at the time. Other technical problems also surfaced with Ultrix. Lack of) 1746 SB
351 1354 1656 (shared libraries was one of the most important. Since many of the important UNIX) 1656 SB
351 1413 1726 (application software packages depended on shared libraries, it became very difficult for) 1726 SB
351 1472 1781 (software vendors to port their product to the DECstations. Further, since DEC could not) 1781 SB
351 1531 1732 (provide assurances of sufficient sales volume, many application vendors stayed away or) 1732 SB
351 1590 694 (put DEC low on their priority lists.) 694 SB
351 1682 1698 (The VAXstation enjoyed moderate success, but performance lagged badly against the) 1698 SB
351 1741 1686 (competition. The VAXstation 4000, due in fall 1990, slipped month by month for an) 1686 SB
351 1800 1783 (entire year. It finally started shipping in late 1991. At roughly 12 SPECmarks, it was fast) 1783 SB
351 1859 1685 (by VAX standards, but obsolete versus the competition even before it hit the market.) 1685 SB
351 1918 1725 (DEC lost major customers and credibility from this VAXstation debacle. For example,) 1725 SB
351 1977 1764 (one department at 3M changed their strategic direction away from DEC and VMS to HP) 1764 SB
351 2036 1787 (and HP-UX \(HP\222s version of UNIX\). This cost the sales team in Minneapolis at least 200) 1787 SB
351 2095 108 (units.) 108 SB
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491 2095 1414 ( Reports of similar situations came from around the world as DEC lost) 1414 SB
351 2154 518 (workstation market share.) 518 SB
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375 2536 1629 ( At that time, a big component of my job was to demonstrate this technology to potential customers. It was) 1629 SB
390 2582 882 (genuinely exciting to watch the skeptics become converts.) 882 SB
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351 2647 24 (21) 24 SB
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375 2653 1717 ( My ears still ring from tongue lashings I took from the people at 3M during nondisclosure presentations in 1990) 1717 SB
390 2699 1714 (and 1991. After DEC broke promise after promise, the people at 3M finally became disgusted and started to get) 1714 SB
390 2745 1667 (rid of VMS in favor of HP and UNIX. DEC lost 200 seats in this department alone. DEC lost thousands and) 1667 SB
390 2791 1264 (thousands of seats around the world due to similar situations with other customers.) 1264 SB
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351 278 284 (Argenti\222) 283 SB
634 278 873 (s Model Starts to Kick In) 873 SB
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351 390 1662 (As DEC lost market share in workstations, sales of larger and more profitable VAX) 1662 SB
351 449 1749 (systems also started to slide. The VAX 9000 mainframe was an expensive technical and) 1749 SB
351 508 1752 (business flop as sales failed to even come close to projections and service proved to be a) 1752 SB
351 567 211 (nightmare.) 211 SB
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351 684 287 (Constraints) 287 SB
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351 770 1749 (By late 1991 and early 1992, DEC all but abandoned its DECwindows development and) 1749 SB
351 829 1795 (laid off or reassigned most of the engineering team. Its other layered software engineering) 1795 SB
351 888 1784 (groups found themselves in constant turmoil as managers fought turf battles for dwindling) 1784 SB
351 947 1778 (budgets. Rumors flew around the world across the electronic grapevine about the demise) 1778 SB
351 1006 720 (of various popular layered products.) 720 SB
351 1098 1656 (In the field, presales consultants were asked to find ways to bill customers for work) 1656 SB
351 1157 1703 (formerly done for free. Pressure mounted to cut back on trade show appearances and) 1703 SB
351 1216 507 (local marketing activities.) 507 SB
351 1308 1784 (In 1992, DEC closed the VAX 9000 plant in California and quietly started removing them) 1784 SB
351 1367 281 (from the field.) 281 SB
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351 1484 620 (Mismanaged Change, Cr) 619 SB
970 1484 843 (eative Bookkeeping, Backstabbing) 843 SB
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351 1570 1780 (As DEC found itself with too many people at headquarters and apparently too few people) 1780 SB
351 1629 1710 (in the field, it started \223Career Opportunity Days\224. These were one or two day internal) 1710 SB
351 1688 1696 (\223job fairs\224, where interested people could interview with managers of field groups for) 1696 SB
351 1747 1756 (positions in local service offices. Participants report the sessions were poorly organized;) 1756 SB
351 1806 1633 (in many cases, managers and potential interviewees did not know who they should) 1633 SB
351 1865 875 (interview, or when or where they should be.) 875 SB
351 1957 1747 (Senior management promised to set up a central fund to pay for all this. However, after) 1747 SB
351 2016 1750 (local offices hired and relocated several people in 1990 and 1991, the newly reorganized) 1750 SB
351 2075 1736 (senior management team changed their minds and dictated local offices would pay from) 1736 SB
351 2134 1648 (their own budgets. Since local offices had no budgets for any of this activity, other) 1648 SB
351 2193 473 (budgets were squeezed.) 473 SB
351 2285 1725 (Results were less than satisfactory. One case in Minneapolis is typical: DEC relocated) 1725 SB
351 2344 1724 (Karen from New England to Minneapolis, at a cost of several thousand dollars, put her) 1724 SB
351 2403 1739 (through several months of UNIX training, spending several more thousand dollars, then) 1739 SB
351 2462 1716 (finally turned her loose with customers as a UNIX Software Specialist. Karen worked) 1716 SB
351 2521 1739 (hard and began building a good reputation with customers. But after just over one year) 1739 SB
351 2580 1730 (on the new job, DEC managers in Minneapolis laid her off in the fall 1992. In a market) 1730 SB
351 2639 1720 (demanding UNIX expertise, DEC in Minneapolis threw away 18 months of investment) 1720 SB
351 2802 390 ( ) 390 SB
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375 2862 737 ( We discussed Argenti\222s model in class 2/7/94. ) 737 SB
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1112 2861 742 (Corporate Collapse: The Causes and Symptoms) 742 SB
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390 2908 331 (Halstead Press, 1976.) 331 SB
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351 278 1640 (and its only UNIX expertise. Similar stories from around the world filled the DEC) 1640 SB
351 337 481 (electronic mail network.) 481 SB
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351 454 519 (Alpha -- \223The Big Pr) 518 SB
869 454 147 (oject\224) 147 SB
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351 540 1752 (Meanwhile, DEC quietly revived development on its own RISC chip, newly code named) 1752 SB
351 599 1728 (\223Alpha\224, as it became clear the VAX architecture could not perform anywhere near the) 1728 SB
351 658 1641 (speed of the newer RISC architectures. The original PRISM was altered with new) 1641 SB
351 717 1645 (capabilities that would allow it to run VMS, UNIX, or any other popular operating) 1645 SB
351 776 1703 (system. An advanced development project quietly started to investigate porting VMS) 1703 SB
351 835 904 (from the VAX to the new Alpha architecture.) 904 SB
351 927 1648 (As the project gained momentum through 1990 and 1991, word leaked out about a) 1648 SB
351 986 903 (mysterious new RISC architecture from DEC) 903 SB
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1254 980 32 (23) 32 SB
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1286 986 829 (. DEC publicly introduced the first Alpha) 829 SB
351 1045 1689 (RISC chip at the annual ISSSC convention in February, 1992. It was a mob scene as) 1689 SB
351 1104 1393 (people clamored for more information and a look at this hot new chip.) 1393 SB
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1744 1098 32 (24) 32 SB
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351 1196 1708 (VMS porting work continued in earnest and VMS Engineering delivered Alpha VMS,) 1708 SB
351 1255 1751 (version 1.0, on schedule in November, 1992. Version 1.5 followed shortly after in May,) 1751 SB
351 1314 1768 (1993. By May, 1994, VMS on the Alpha platform had all the capabilities of VMS on the) 1768 SB
351 1373 1700 (VAX platform as DEC simultaneously shipped VMS version 6.1 for VAX and Alpha.) 1700 SB
351 1432 837 (This was a monumental technical triumph.) 837 SB
351 1524 1295 (DEC had a bold strategy to conquer the market on several levels:) 1295 SB
351 1616 1773 (First, it would establish Alpha as the industry standard 64 bit chip for the 21st century. It) 1773 SB
351 1675 1743 (would do this by inventing the most powerful and bullet-proof RISC architecture on the) 1743 SB
351 1734 1710 (market and convincing system vendors and partners to use it. DEC would also recruit) 1710 SB
351 1793 1770 (other manufacturing foundries to build Alpha chips, which would provide second sources) 1770 SB
351 1852 1754 (for system vendors. Alpha chips would be everywhere -- from factory assembly lines, to) 1754 SB
351 1911 1258 (controlling fuel/air mixtures in automobiles, to kitchen toasters.) 1258 SB
351 2003 1755 (DEC would also build its own systems based on Alpha chips and would migrate all of its) 1755 SB
351 2062 1619 (software to run on alpha based platforms. These systems would lead the world in) 1619 SB
351 2121 1793 (performance, price/performance, and every relevant performance benchmark. They would) 1793 SB
351 2180 1093 (be years ahead of anything the competition could offer.) 1093 SB
351 2317 390 ( ) 390 SB
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351 2371 24 (23) 24 SB
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375 2377 1701 ( A few VMS partners and I were sources of some of these early leaks in 1990. Lacking approved nondisclosure) 1701 SB
390 2423 1740 (presentations, we made our own presentations and delivered to key customers we were in danger of losing. These) 1740 SB
390 2469 1677 (were customers who were genuinely concerned about DEC\222s future research and development investments. If) 1677 SB
390 2515 1703 (DEC had no plan to at least keep up with the rest of the industry, they would defect. If we could convince them) 1703 SB
390 2561 1718 (DEC had a credible plan, we could hopefully keep them in our camp. In Minnesota, this strategy worked well at) 1718 SB
390 2607 1682 (Mayo Clinic, not so well at 3M. Eventually, vice-president Bill Demmer began making public speeches about) 1682 SB
390 2653 1716 (alpha and the floodgates opened. Some members of the press criticize those early leaks, but I still believe it was) 1716 SB
390 2699 1727 (the right thing to do. Without early notice to key customers, we would have lost many of them to the competition) 1727 SB
390 2745 578 (before we had any chance to compete.) 578 SB
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351 2810 24 (24) 24 SB
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375 2816 400 ( The ISSSC convention is ) 400 SB
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775 2814 59 (the ) 59 SB
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834 2816 1251 (convention for chipmakeers. Vendors deliver technical papers and introduce their) 1251 SB
390 2862 1711 (wares at these shows. People who were there at the 1992 show wrote memos vividly describing people lined 10) 1711 SB
390 2908 1149 (deep all around Dan Dobberpuhl, the DEC presenter, clamoring for details.) 1149 SB
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351 278 1576 (But something happened between the chip announcement in February 1992 and) 1576 SB
351 337 1626 (introduction of formal products in November, 1992. The introduction was poorly) 1626 SB
351 396 1689 (coordinated, unclear, and unenthusiastic. DEC failed to communicate its plans to the) 1689 SB
351 455 1799 (buying public or generate any confidence in its ability to deliver. Problems with DEC sales) 1799 SB
351 514 1094 (and management were widely documented in the press.) 1094 SB
351 606 1736 (Sales did not take off as expected, DEC never did recruit partners to generate sufficient) 1736 SB
351 665 1771 (sales volume, and, by mid 1994, far from becoming an emerging industry standard, Alpha) 1771 SB
351 724 550 (is fast becoming a footnote.) 550 SB
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351 841 704 (Why isn\222t Alpha Successful?) 704 SB
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351 927 1742 (I was unable to find anybody inside DEC who would tell a candid story on the failure to) 1742 SB
351 986 1325 (recruit significant partners. As a former insider, I offer this theory.) 1325 SB
351 1078 1747 (DEC lost much of its credibility in the mid 1980s when it closed the BI bus and changed) 1747 SB
351 1137 1796 (business practices. Many vendors who depended on DEC went out of business because of) 1796 SB
351 1196 1680 (this change. Even through mid 1994, DEC is only grudgingly and slowly opening its) 1680 SB
351 1255 1774 (business practices. Nobody wants to depend on a partner who will stab them in the back.) 1774 SB
351 1347 1712 (DEC wants to sell Alpha chips to other system vendors and use Alpha chips in its own) 1712 SB
351 1406 1696 (systems. These system vendors will eventually compete with DEC , yet they will also) 1696 SB
351 1465 1621 (depend on DEC as a supplier -- a risky relationship, especially for a vendor with a) 1621 SB
351 1524 927 (reputation for stabbing its partners in the back.) 927 SB
351 1616 1739 (DEC has lots of excess manufacturing capacity, and more coming online soon. With all) 1739 SB
351 1675 1701 (this capacity, potential second source chip vendors are reluctant to invest in their own) 1701 SB
351 1734 1725 (production facilities to build potentially competing chips. So none of the major players) 1725 SB
351 1793 676 (have signed on as second sources.) 676 SB
32 0 0 75 75 0 0 0 68 /Helvetica-BoldOblique /font10 ANSIFont font
351 1918 71 (W) 70 SB
421 1918 905 (aves of Reorganizaztions) 905 SB
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351 2030 1723 (Most of DEC\222s turnaround efforts centered around constant reorganization. The DEC) 1723 SB
351 2089 1767 (electronic grapevine compared the situation to a bird cage; as somebody shakes the cage,) 1767 SB
351 2148 1669 (the birds all fly in the air and land in different spots. Ken Olsen shook the cage for a) 1669 SB
351 2207 736 (while, then it was Bob Palmer\222s turn.) 736 SB
351 2299 1703 (The situation deteriorated from 1991 through mid 1994 as vice-presidents were hired,) 1703 SB
351 2358 572 (fired, and built their empires.) 572 SB
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351 2475 1100 (Round One -- The New Management System) 1100 SB
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351 2561 1779 (In 1991, Ken Olsen tried to attack the problem by reorganizing the company around \223The) 1779 SB
351 2620 1738 (New Management System\224. Sweeping reorganizations had worked at least twice in the) 1738 SB
351 2679 1740 (past; first in the 1960s when DEC set up the now famous matrix management structure,) 1740 SB
351 2738 1322 (and again in 1983 when DEC dismantled its product line structure.) 1322 SB
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351 2848 390 ( ) 390 SB
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375 2908 548 ( This history is well documented in ) 548 SB
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923 2907 412 (The Ultimate Entrepreneur) 412 SB
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1335 2908 10 (.) 10 SB
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351 278 1665 (Like everything else in the computer industry, TNMS soon came to be known by its) 1665 SB
351 337 1765 (acronym. The theme was simple and familiar: Set up a structure such that line managers) 1765 SB
351 396 1759 (would be accountable for their actions. Push budgeting and profit and loss responsibility) 1759 SB
351 455 1388 (as far down the organization and as close to the real work as possible.) 1388 SB
351 547 1628 (It was a worthy goal, but scandalously implemented as vice-presidents all over the) 1628 SB
351 606 1792 (company jockeyed for strategic advantage against one another. The story from U.S. Sales) 1792 SB
351 665 679 (may have been the most shocking.) 679 SB
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351 782 216 (Stovepipes) 216 SB
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351 858 225 (A business ) 225 SB
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576 858 188 (stovepipe) 188 SB
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764 858 1328 ( is an organizational culture that prevents people in one segment of) 1328 SB
351 917 1763 (the business from interacting with people in another segment in a common-sense fashion.) 1763 SB
351 976 1640 (In a business stovepipe, communication travels vertically within a segment, but not) 1640 SB
351 1035 1773 (laterally. The behavior is similar to a physical stovepipe above a fireplace - smoke travels) 1773 SB
351 1094 1656 (straight up through the stovepipe. This is good in a fireplace, but bad in a business.) 1656 SB
351 1186 1688 (Business stovepipes create several problems. Stovepipe cultures tend to create semi-) 1688 SB
351 1245 1579 (independent, vertically integrated divisions within the overall organization. The) 1579 SB
351 1304 1657 (management of each of these divisions compete with each other for funds and other) 1657 SB
351 1363 1588 (organizational resources. Ultimately the divisions become personal, self-serving) 1588 SB
351 1422 1794 ("fiefdoms". Although each of the divisions depends on the other divisions to operate, they) 1794 SB
351 1481 1762 (tend to act in heir own immediate interest, often at the expense of other divisions and the) 1762 SB
351 1540 408 (overall organization.) 408 SB
351 1632 1679 (Unless somebody with overall responsibility intervenes, organizations with stovepipe) 1679 SB
351 1691 1788 (cultures eventually become choked with waste, duplication, and mistrust. The market will) 1788 SB
351 1750 1789 (eventually find a more efficient supplier and the stovepipe organization must either change) 1789 SB
351 1809 128 (or die.) 128 SB
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351 1926 535 (Red Lines and Blue Lines) 535 SB
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351 2002 1606 (To implement TNMS in the U.S., Bob Hughes, then vice-president of U.S. sales,) 1606 SB
351 2061 1731 (promised to eliminate bureaucracy and make Digital an easy company with which to do) 1731 SB
351 2120 1597 (business. Bob and his team promised to change the Sales division from a strictly) 1597 SB
351 2179 1782 (hierarchical, centralized organization, to a new form of organization where field managers) 1782 SB
351 2238 941 (would finally be empowered to make decisions.) 941 SB
351 2330 1771 (Unfortunately, these grand promises turned into a disaster as they set up what may be the) 1771 SB
351 2389 1739 (most confusing organizational structure ever witnessed in business. The system divided) 1739 SB
351 2448 1560 (Digital's U.S. marketplace into geographies, then crossed the geographies with) 1560 SB
351 2507 1800 (management structures to handle national and international customers. The idea was, each) 1800 SB
351 2566 1748 (large account would have a single sales account manager with ultimate responsibility for) 1748 SB
351 2625 296 (profit and loss.) 296 SB
351 2717 1685 (Large customers who crossed geographical boundaries and spent lots of money were) 1685 SB
351 2776 128 (called ) 128 SB
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479 2776 193 (Red Line ) 193 SB
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672 2776 1401 (accounts. Each red line account was assigned an overall manager who) 1401 SB
351 2835 1367 (had responsibility for profit and loss. All other accounts were called ) 1367 SB
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1718 2835 194 (Blue Line) 194 SB
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1912 2835 201 ( accounts.) 201 SB
351 2894 1732 (These were managed as a portfolio by the existing field management team. An account) 1732 SB
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351 278 1744 (set manager would have ultimate responsibility for profit and loss for the assigned set of) 1744 SB
351 337 488 (accounts in the territory.) 488 SB
351 429 1583 (Although the system was designed to be organized around customers, it quickly) 1583 SB
351 488 1623 (degenerated into chaos. Each red-line manager needed a sales force and technical) 1623 SB
351 547 1644 (support. Blue line managers also needed a sales force and technical support. Each) 1644 SB
351 606 1776 (manager drew up a budget for what they needed and where they needed them. Then they) 1776 SB
351 665 1720 (essentially picked teams from the existing sales and technical support force. Those not) 1720 SB
351 724 1698 (picked were laid off -- regardless of whether their skills were needed by the company.) 1698 SB
351 816 1770 (The new red line managers generally had no prior relationships with their new customers.) 1770 SB
351 875 1718 (And, although the new organization was designed to give ultimate responsibility to red) 1718 SB
351 934 1761 (line and blue line managers, nobody ever built information systems to tell these managers) 1761 SB
351 993 1771 (whether or not they were profitable. This meant that managers in one part of the country) 1771 SB
351 1052 1667 (made strategic decisions about customers in another part of the country without any) 1667 SB
351 1111 1767 (knowledge of the history or relationship. And, even worse, they had no quantitative data) 1767 SB
351 1170 1709 (to understand the basis or consequences of their decisions. This meant that significant) 1709 SB
351 1229 1635 (decisions were often made with no qualitative or quantitative data. In many cases,) 1635 SB
351 1288 899 (budgets were no better than random numbers) 899 SB
351 1380 1749 (The existing sales force in local offices across the U.S. knew their local customers down) 1749 SB
351 1439 1622 (the street, but were prohibited from calling on them. Instead, the red line account) 1622 SB
351 1498 1720 (managers would fly people from out of town to call on local customers. So a sales rep) 1720 SB
351 1557 1707 (from Denver would call on the Minneapolis branch of a company with headquarters in) 1707 SB
351 1616 1619 (Denver, while the sales rep from Minneapolis would call on the Texas branch of a) 1619 SB
351 1675 830 (company with headquarters in Minnesota.) 830 SB
351 1767 1734 (This lead to ridiculous situations, including at least one in Minneapolis. Over the years,) 1734 SB
351 1826 1584 (the Minneapolis office built a productive relationship with a large company with) 1584 SB
351 1885 1778 (headquarters in Denver and significant operations in Minneapolis. But, after red lines and) 1778 SB
351 1944 1776 (blue lines, people in the Minneapolis office were prohibited from calling on this customer.) 1776 SB
351 2003 1788 (Instead, the account manager flew in from Denver occasionally. Results were predictable.) 1788 SB
351 2062 1713 (The customer complained, ongoing projects were delayed or canceled, and the flow of) 1713 SB
351 2121 809 (money from this customer slowed down.) 809 SB
351 2213 1799 (In several other cases, technical support people possessed skills needed to make significant) 1799 SB
351 2272 1719 (sales to red line customers. But if the support people spent time with these customers,) 1719 SB
351 2331 1680 (they would have to charge that time internally to the red line business, which had not) 1680 SB
351 2390 1760 (budgeted for support time. It was internal accounting gone nuts. The predictable result:) 1760 SB
351 2449 1767 (Digital walked away from significant pieces of business because its internal structures did) 1767 SB
351 2508 953 (not allow it to apply talent where it was needed.) 953 SB
351 2600 1753 (The system forced sales managers to spend nearly all their time meeting or in conference) 1753 SB
351 2659 1707 (calls with eachother in marathon budgeting and planning exercises. With all their time) 1707 SB
351 2718 1680 (booked for planning exercises, nobody had time to run the business. Incredibly, they) 1680 SB
351 2777 1582 (sometimes turned down orders because they had not yet assigned sales reps and) 1582 SB
351 2836 813 (territories, and nobody knew what to do.) 813 SB
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351 278 1764 (In at least one case in Colorado in 1991, a customer called his local office to order a new) 1764 SB
351 337 1794 ($100,000+ VAX. The local office turned him away because it had not yet assigned a sales) 1794 SB
351 396 374 (rep to the account.) 374 SB
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725 390 32 (26) 32 SB
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351 488 1699 (The situation ultimately degenerated into total chaos as the red line account managers) 1699 SB
351 547 1728 (quickly built their empires and the system grew increasingly corrupt. Geographical line) 1728 SB
351 606 1735 (managers found themselves forced to layoff more and more people as spending budgets) 1735 SB
351 665 1266 (were squeezed harder and harder each quarter as sales dried up.) 1266 SB
351 757 1717 (The system took on a life of its own as the first wave of layoffs hit the U.S field in July) 1717 SB
351 816 1733 (1991. Suddenly, it was no longer internal funny-money. In New York, security guards) 1733 SB
351 875 1793 (met people at the door as they reported to work. People on the \223good\224 list were let inside) 1793 SB
351 934 1589 (to work. People on the \223bad\224 list were escorted to their desks to clean out their) 1589 SB
351 993 425 (belongings and leave.) 425 SB
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776 987 32 (27) 32 SB
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808 993 1318 ( In most other cities, people were escorted to the Personnel office) 1318 SB
351 1052 1759 (throughout the day, told the news, then allowed to say good-bye and leave on their own.) 1759 SB
351 1111 1731 (More than 20 people were let go that day in Minneapolis. To call that day stressful is a) 1731 SB
351 1170 1741 (gross understatement. The next round occurred in October, 1991. From that time until) 1741 SB
351 1229 1750 (mid 1994 and beyond, the constant threat of layoffs became just another fact of working) 1750 SB
351 1288 1497 (life at DEC as round after round swept various groups across the company.) 1497 SB
351 1380 1786 (Red lines and blue lines could have worked had the system been implemented with at least) 1786 SB
351 1439 1677 (some semblance of cooperation. Instead, it degenerated into competing empires and) 1677 SB
351 1498 1730 (political maneuvering. The process failed and thousands of good people lost their jobs.) 1730 SB
351 1590 1745 (Bob Hughes eventually left DEC, \223to pursue other interests\224, and the infamous red lines) 1745 SB
351 1649 526 (and blue lines died quietly.) 526 SB
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351 1766 892 (Round 2 -- Customer Business Units) 892 SB
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351 1852 1642 (Bob Palmer took over as the new CEO in the summer of 1992 and reorganized the) 1642 SB
351 1911 1764 (company again. This time, instead of dividing the company by geography, he divided the) 1764 SB
351 1970 1772 (company into 9 business units. Four of these were product divisions, such as storage and) 1772 SB
351 2029 1754 (personal computers. Five were market segments, such as medical, defense, government,) 1754 SB
351 2088 220 (and others.) 220 SB
351 2180 1664 (The idea was to organize the company around customer issues, rather than arbitrary) 1664 SB
351 2239 1763 (geographic boundaries, so each Customer Business Unit \(CBU\) concentrated on a group) 1763 SB
351 2298 1743 (of industries world wide. Their job was to penetrate their assigned markets with Digital) 1743 SB
351 2357 1374 (products and services and provide a favorable return to the company.) 1374 SB
351 2449 1596 (The 5 CBU vice-presidents were given free reign over their markets. They were) 1596 SB
351 2508 1752 (empowered to make important decisions because they would be closest to the customer.) 1752 SB
351 2567 1583 (Unfortunately, the results were disastrous. After 9 months of planning, the new) 1583 SB
351 2626 1726 (organization went into effect in July 1993. By the end of the quarter, September 1993,) 1726 SB
351 2685 390 ( ) 390 SB
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375 2745 1661 ( Scott Fischer was the MIS director at Laser Magnetic Optical in Colorado and a former DEC employee from) 1661 SB
390 2791 1371 (Minnesota. He told me this story at a Minneapolis DEC user group meeting in fall, 1991.) 1371 SB
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351 2856 24 (27) 24 SB
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375 2862 1753 ( People who were there documented their experiences in electronic employee forums. I also heard the story in face) 1753 SB
390 2908 733 (to face discussions with friends who were there.) 733 SB
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351 278 1700 (Digital's revenues dropped 10 percent and the company lost another $83 million. The) 1700 SB
351 337 1318 (December 1993 and March 1994 quarters were equally disastrous.) 1318 SB
351 429 1630 (Almost immediately after the CBU vice-presidents started on the job, a blizzard of) 1630 SB
351 488 1714 (announcements hit the electronic mail network about country-level vice presidents and) 1714 SB
351 547 1702 (regional level vice-presidents The new CBU vice-presidents each independently hired) 1702 SB
351 606 1717 (their own layer of geography based vice-presidents. Now, instead of one geographical) 1717 SB
351 665 1746 (structure, the company ended up with 5 separate geographical organizations, along with) 1746 SB
351 724 1694 (the original geographic organizations, each fighting for talent, customers, money, and) 1694 SB
351 783 170 (prestige.) 170 SB
351 875 851 (So much for getting close to the customer!) 851 SB
351 967 1716 (The story gets worse. After 9 months of planning, the senior management team finally) 1716 SB
351 1026 1699 (notified individual employees in the field of the new CBU organizations to which they) 1699 SB
351 1085 1676 (were assigned. Everyone received an electronic mail message and 24 hours to either) 1676 SB
351 1144 1737 (accept the new assignment or be essentially terminated. Nobody in authority seemed to) 1737 SB
351 1203 1761 (give much thought to the effect on employee morale or customer confidence as the word) 1761 SB
351 1262 158 (got out.) 158 SB
351 1354 1719 (And the truly bizarre: By most estimates, $11 billion of Digital's $14 billion in revenue) 1719 SB
351 1413 1693 (depend on VMS. This operating system runs the computer operations at many of the) 1693 SB
351 1472 1681 (most important companies in the world. It would be really bad if a company told the) 1681 SB
351 1531 848 (world it is abandoning its flagship product.) 848 SB
351 1623 1749 (Yet some CBU vice-presidents, in essence, did exactly that. They went out of their way) 1749 SB
351 1682 1731 (to tell the press Digital does not plan to go after new markets with VMS. Instead, they) 1731 SB
351 1741 1584 (told the press Digital expects its future growth to come from its UNIX offering.) 1584 SB
351 1800 1676 (Predictably, customers interpreted this statement and other signals to mean Digital is) 1676 SB
351 1859 1746 (abandoning VMS. This shook the confidence of many of Digital's most important VMS) 1746 SB
351 1918 1782 (customers, who had bet millions of dollars and years of staff training on VMS. Many left;) 1782 SB
351 1977 762 (many are strongly considering leaving.) 762 SB
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1113 1971 32 (28) 32 SB
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351 2069 1640 (DEC may never know how many customers they lost and continue to lose to other) 1640 SB
351 2128 1667 (vendors. Despite repeated warnings and pleas from employees across the electronic) 1667 SB
351 2187 1700 (network, nobody seemed to think about the consequences of alienating the company's) 1700 SB
351 2246 726 (employees and entire customer base.) 726 SB
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351 2363 789 (Round 3 -- Back to Geographies) 789 SB
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351 2449 1697 (In the late fall, 1993, Willow Shire, medical CBU vice-president, left \223to pursue other) 1697 SB
351 2508 1775 (interests\224. Palmer quietly put Lucente in charge of all CBUs. The business unit structure) 1775 SB
351 2618 390 ( ) 390 SB
741 2618 221 ( ) 221 SB
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351 2672 24 (28) 24 SB
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375 2678 1682 ( I talk to many people in the DEC installed base in my consulting business. Most now doubt DEC\222s long term) 1682 SB
390 2724 1700 (viability and commitment. Also see the recent trade press article, \223Good, bad news for StorageWorks, HSJ40\224,) 1700 SB
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390 2769 383 (Digital News and Review) 383 SB
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773 2770 1370 (, May 9, 1994, page 23. The article describes a survey of DEC\222s installed base customers) 1370 SB
390 2816 1745 (by Reliability Ratings about disk storage upgrade plans. Very few members of DEC\222s installed base have plans to) 1745 SB
390 2862 1726 (buy these upgrades. The article suggests the lack of interest is directly related to decreasing interest in the VAX.) 1726 SB
390 2908 999 (The survey results are consistent with my first hand observations.) 999 SB
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351 278 1797 (started to crumble. The rumors flew about more field reorganizations, but nobody seemed) 1797 SB
351 337 520 (to have any solid answers.) 520 SB
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351 454 710 (Round 3 1/2 -- Lucente is Fir) 709 SB
1060 454 58 (ed) 58 SB
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351 540 1703 (After the March 1994 quarter, DEC\222s board of directors fired Lucente and put Enrico) 1703 SB
351 599 1733 (Pesatori in charge of sales and marketing. Nobody really knows what will happen from) 1733 SB
351 658 198 (this point.) 198 SB
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351 279 1418 (Apparent Company Operating) 1418 SB
351 397 604 (Conventions) 604 SB
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351 572 394 (Field Sales) 394 SB
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351 684 1753 (Contrary to the lofty statements about \223empowerment\224 and \223quality\224, sales management) 1753 SB
351 743 1783 (inside Digital is strictly top-down and hiearchical. Budgets, quotas, and goals are decided) 1783 SB
351 802 1776 (from above after endless exercises. Most people in DEC sales become cynical after a few) 1776 SB
351 861 1618 (years of constant reassignment and incentives that have little to do with the work.) 1618 SB
351 953 1800 (The press and analysts all argue that DEC should emphasize indirect sales channels such as) 1800 SB
351 1012 1699 (distributors and retailers. DEC managers talked about this for years, but nobody ever) 1699 SB
351 1071 1661 (took concrete action to make it happen. The average DEC sales rep on the street is) 1661 SB
351 1130 1755 (simply not conditioned to thrive in the economy of 1994. Most end user DEC sales reps) 1755 SB
351 1189 1737 (still get more credit for direct sales than indirect sales. One large system sale puts more) 1737 SB
351 1248 1727 (money in their pockets than several PCs. Because of these incentives, many DEC sales) 1727 SB
351 1307 1718 (reps still operate under a model that emphasizes high-priced, low volume products in a) 1718 SB
351 1366 622 (low priced, high volume world.) 622 SB
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351 1491 644 (Digital Consulting) 644 SB
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351 1603 1722 (Digital Consulting is an industry laughingstock. This group was staffed with dedicated) 1722 SB
351 1662 1755 (and capable people at the bottom, but filled with arrogance and incompetence at the top.) 1755 SB
351 1721 1733 (In one noteworthy case, it took two vice-presidents of Digital Consulting to draft a one) 1733 SB
351 1780 1588 (page letter to the field explaining that the company would soon be consolidating) 1588 SB
351 1839 1744 (operations. When asked why, a member of their staff replied the tremendous amount of) 1744 SB
351 1898 643 (work required 2 vice-presidents.) 643 SB
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994 1892 32 (29) 32 SB
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351 1990 1693 (The system pits managers against eachother in a constant guerrilla war over who gets) 1693 SB
351 2049 1737 (credit for orders. So management forces technical experts in the field to manually enter) 1737 SB
351 2108 1626 (different, and sometimes contradictory, budget and forecast numbers into multiple) 1626 SB
351 2167 1686 (systems. Instead of dealing with the real world, managers then make layoff decisions) 1686 SB
351 2226 1736 (based on these numbers. The only metric that really counts is billable hours. Quality of) 1736 SB
351 2285 1735 (solutions and customer satisfaction are far down on the list. The system provides every) 1735 SB
351 2344 1235 (incentive to cook the books and no incentive for quality work.) 1235 SB
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351 2469 640 (Customer Service) 640 SB
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351 2581 1751 (The Customer Service group is the most efficient field group in the company. These are) 1751 SB
351 2640 1693 (the people truly on the front lines, every day, troubleshooting customer hardware and) 1693 SB
351 2699 1764 (software problems and maintaining customer relationships. The managers I have met are) 1764 SB
351 2848 390 ( ) 390 SB
741 2848 221 ( ) 221 SB
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351 2902 24 (29) 24 SB
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375 2908 879 ( It happened in 1991. I was there and asked the question.) 879 SB
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351 278 1632 (all top-notch, they all know their business, and they are all committed to operating) 1632 SB
351 337 495 (efficiently and profitably.) 495 SB
351 429 1780 (Customer Service will need every bit of that efficiency as the market continues to squeeze) 1780 SB
351 488 1736 (revenue and profit margins. With cheap, commodity hardware and 3-5 year warranties,) 1736 SB
351 547 1770 (lucrative hardware maintenance contracts will soon be a distant memory. In fact, Service) 1770 SB
351 606 1730 (Revenues were down 11 percent in Q3 FY 1994. Since Digital combines revenue from) 1730 SB
351 665 1764 (Consulting and Customer Service operations in this single income statement line, it is not) 1764 SB
351 724 1709 (possible to tell which business took the brunt of this decline. But it is well known that) 1709 SB
351 783 1762 (other companies such as Bell Atlantic routinely try to underbid DEC service and they are) 1762 SB
351 842 531 (making significant inroads.) 531 SB
351 934 1762 (Although traditionally a hardware maintenance group, Customer Service is working hard) 1762 SB
351 993 1657 (to build its software expertise. It will run into trouble as it competes internally with) 1657 SB
351 1052 1672 (Digital Consulting to deliver system management and troubleshooting expertise on a) 1672 SB
351 1111 326 (consulting basis.) 326 SB
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351 1236 280 (Storage) 280 SB
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351 1348 1617 (In mid 1994, storage is one of DEC\222s few bright spots. This group is becoming a) 1617 SB
351 1407 1740 (competitive powerhouse and building an excellent reputation as a technology leader. In) 1740 SB
351 1466 1716 (1991, Charlie Christ, vice-president of the storage group, made a tough and unpopular) 1716 SB
351 1525 1726 (decision to abandon large, proprietary disks and concentrate on smaller, more open 3.5) 1726 SB
351 1584 1668 (inch disks and standardized enclosures. Unlike other parts of DEC, they recognized) 1668 SB
351 1643 1692 (where the market was going and got in front to help lead the charge. In 1990, DEC's) 1692 SB
351 1702 1704 (storage products were the most expensive and slowest performing in the industry. By) 1704 SB
351 1761 1768 (1994, DEC storage is competitive with everyone on price, equal or better in performance) 1768 SB
351 1820 1711 (and reliability, and constantly improving. Charlie Christ led the storage group from an) 1711 SB
351 1879 932 (industry laughingstock to leadership in 2 years.) 932 SB
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351 2004 146 (PCs) 146 SB
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351 2116 1677 (By 1994, the PC business is another DEC success story. It was not always this way.) 1677 SB
351 2208 1768 (People still tell stories about the 1983 PRO 350, Rainbow, and DECmate II flops. These) 1768 SB
351 2267 1672 (systems were technically excellent, years ahead of their time, and offered capabilities) 1672 SB
351 2326 1748 (nobody could match. Unfortunately, DEC failed to recruit application software vendors) 1748 SB
351 2385 766 (and bungled its attempts at retail sales.) 766 SB
351 2477 1784 (In 1990, DEC's PC business was a laughingstock. DEC finally made a deal with Tandy to) 1784 SB
351 2536 1759 (resell their PCs and sold them at roughly double the market price. This further enhanced) 1759 SB
351 2595 793 (their reputation as a high cost producer.) 793 SB
351 2687 1689 (In 1991, DEC started up a telephone and mail order PC business, modeled after Dell.) 1689 SB
351 2746 1605 (This grew from nothing in 1991 to become one of the major PC players by 1994.) 1605 SB
351 2805 1732 (Although he did not start up this operation, Enrico Pesatori is generally given credit for) 1732 SB
351 2864 411 (making it successful.) 411 SB
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351 278 1631 (As a consumer, the PC division is pleasant to deal with. They offer good value on) 1631 SB
351 337 1682 (complete systems, but are nowhere near competitive on components and peripherals.) 1682 SB
351 396 1659 (However, they believe retailers are better able to sell components and peripherals at) 1659 SB
351 455 1760 (competitive prices. For DEC, warehousing and inventory costs are too high. Therefore,) 1760 SB
351 514 1738 (they made a conscious decision to concentrate on complete systems. They intentionally) 1738 SB
351 573 1418 (keep prices high on components and peripherals to keep demand down.) 1418 SB
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1769 567 32 (30) 32 SB
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351 665 1671 (They offer a responsive telephone sales staff, 3 year warranty, and reasonably priced) 1671 SB
351 724 540 (telephone support services.) 540 SB
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351 849 1780 (Hardware System Engineering and Manufacturing) 1780 SB
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351 961 1701 (DEC has a long reputation for excellence in hardware engineering and manufacturing.) 1701 SB
351 1020 1554 (The reputation continues with the introduction of new alpha system platforms.) 1554 SB
351 1112 1656 (The forecasting system is a joke. It has been broken since at least 1979, when poor) 1656 SB
351 1171 1723 (forecasts of the then new DEC VT100 terminal pushed lead times out beyond one year) 1723 SB
351 1230 1742 (and spawned an entire clone terminal industry. Nobody ever wanted to spend money to) 1742 SB
351 1289 1716 (fix the forecasting system, yet its shortcomings cost DEC dearly again and again. This) 1716 SB
351 1348 1722 (was common knowledge at the grass roots level inside DEC for years and nobody ever) 1722 SB
351 1407 1792 (figured out why management failed repeatedly to address the issue. By mid 1994, even the) 1792 SB
351 1466 803 (popular press knows about its problems:) 803 SB
426 1558 1438 (The next move: better systems. Insiders say one of the reasons Palmer\222s) 1438 SB
426 1617 1505 (reorganization -- built around customer-oriented business units -- failed was) 1505 SB
426 1676 1703 (inadequate sales-forecasting and manufacturing -planning systems. Designed for low-) 1703 SB
426 1735 1693 (volume, high-margin products, they could not cope with the rapid shift to commodity) 1693 SB
426 1794 1551 (products such as PCs and disk drives. One DEC sales manager says the sales-) 1551 SB
426 1853 1671 (forecasting systems have no link to DEC\222s manufacturing-planning systems -- so the) 1671 SB
426 1912 1673 (two are manually reconciled. Indeed, Lucente predicted as recently as February that) 1673 SB
426 1971 1613 (Alpha sales were going to double in the March quarter. Instead, Alpha sales rose) 1613 SB
426 2030 1695 (66%. Admits a spokesman: \221There\222s some internal work that needs to be done for us) 1695 SB
426 2089 582 (to become more predictable.\222) 582 SB
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1008 2083 32 (31) 32 SB
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351 2181 1788 (The forecast system is still hurting DEC. DEC recently announced a brilliantly engineered) 1788 SB
351 2240 1748 (new alpha based system, the DEC 2100. Most people at the grass roots believe demand) 1748 SB
351 2299 1775 (will skyrocket for this product. Yet, according to a presentation from DEC to Minnesota) 1775 SB
351 2358 1756 (DEC distributors in April, 1994, manufacturing is only planning to build 1200 systems in) 1756 SB
351 2417 1794 (the June quarter. If demand is anything near expected, product shortages and lost revenue) 1794 SB
351 2476 319 (will be rampant.) 319 SB
351 2568 1796 (DEC is pouring roughly $500 million into a new chip plant in Hudson, Mass. This state of) 1796 SB
351 2627 1793 (the art facility is scheduled to come online in 1995. If DEC survives that long, it will build) 1793 SB
351 2777 390 ( ) 390 SB
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351 2831 24 (30) 24 SB
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375 2837 1180 (Conversations with Cindy Perkins, DEC PC telesales rep \(1-800-PCBYDEC\)) 1180 SB
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351 2902 24 (31) 24 SB
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375 2908 442 ( \223Desperate Hours at DEC\224, ) 442 SB
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817 2907 222 (Business Week) 222 SB
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1039 2908 362 (, May 9, 1994, page 28.) 362 SB
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351 278 1746 (subsequent versions of its Alpha chips here. These future chips promise additional CPU) 1746 SB
351 337 1409 (performance gains of 10 to 100 times over those available in mid 1994.) 1409 SB
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351 462 773 (Software Engineering) 773 SB
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351 574 1727 (DEC software engineering was once widely respected in the industry. They are rapidly) 1727 SB
351 633 1763 (losing their credibility. They have lots of good ideas, but never seem to implement them,) 1763 SB
351 692 1775 (and the world will no longer wait for this group to get its act together. They have started) 1775 SB
351 751 1103 (and abandoned more ideas than most companies invent.) 1103 SB
351 843 1568 (As recently as 1989, DEC offered unprecedented excellence in middleware and) 1568 SB
351 902 1769 (communication software. The operating motto at the time: "Build the best, integrate the) 1769 SB
351 961 1698 (rest." Unfortunately, DEC still offers roughly the same capabilities it offered in 1989.) 1698 SB
351 1020 1643 (The rest of the industry passed DEC by as the engineering managers jockeyed with) 1643 SB
351 1079 639 (eachother in endless turf battles.) 639 SB
351 1171 1718 (In 1990, David Stone was promoted to vice-president of layered software engineering.) 1718 SB
351 1230 1704 (Stone was a visionary who preached the gospel of the \223Information Utility\224 to anyone) 1704 SB
351 1289 1559 (who would listen. He was one of the forces behind the scenes, long before the) 1559 SB
351 1348 1049 (\223Information Highway\224 made it to the popular press.) 1049 SB
351 1440 1750 (Stone believed that software products would soon become low margin commodities and) 1750 SB
351 1499 1659 (would sit on retail shelves next to PCs. He further believed that DEC\222s engineering) 1659 SB
351 1558 1641 (methodology was antiquated and would not be ready for the new paradigm. So he) 1641 SB
351 1617 1774 (attempted to reorganize several disparate and competing groups into \223The New Software) 1774 SB
351 1676 342 (Group\224 \(TNSG\).) 342 SB
351 1768 1325 (Evidently, Stone was more of a visionary than a practical manager.) 1325 SB
351 1860 1724 (By February, 1992, one manager from TNSG admitted in public it took them 6 months) 1724 SB
351 1919 1786 (just to figure out roles and responsibilities. During this period, much of the ongoing work) 1786 SB
351 1978 503 (stopped or slowed down.) 503 SB
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854 1972 32 (32) 32 SB
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351 2070 1744 (Stone left later in 1992 and went to AT&T. He was replaced by Dennis Roberson, who) 1744 SB
351 2129 1756 (appeared to be in way over his head. In public appearances in 1992 and 1993, Roberson) 1756 SB
351 2188 1789 (was unable to give coherent answers to questions and seemed to provide little guidance or) 1789 SB
351 2247 411 (leadership to TNSG.) 411 SB
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762 2241 32 (33) 32 SB
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351 2339 1757 (Through 1992 and 1993, rumors flew across the electronic grapevine about the future of) 1757 SB
351 2398 1723 (key application software products. With their futures uncertain, many of us in the field) 1723 SB
351 2457 1790 (shied away from promoting them. Meanwhile, engineering budgets were squeezed further) 1790 SB
351 2516 1060 (and further as the rest of the company went downhill.) 1060 SB
351 2639 390 ( ) 390 SB
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375 2699 1718 ( This took place at an internal seminar, \223IMSYM\224 \(Information Management SYMposium\) in Colorado Springs,) 1718 SB
390 2745 1743 (February, 1992. The highlight of that seminar was a bus trip to Cripple Creek, Colorado, where I gambled away a) 1743 SB
390 2791 1430 (50 cent roll of pennies in the slot machines in one of the newly renovated main-street casinos.) 1430 SB
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351 2856 24 (33) 24 SB
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375 2862 1677 ( I remember Roberson in at least 2 appearances. The first was a company wide closed circuit TV broadcast in) 1677 SB
390 2908 1464 (December, 1992. The second was a live appearance in front of the VMS Partners in July, 1993.) 1464 SB
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351 278 1179 (The casualties were heartbreaking and the stories shocking:) 1179 SB
32 0 0 50 50 0 0 0 50 /Symbol font
426 368 36 (\267 ) 75 SB
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501 373 1449 (DECwrite, introduced in 1989, was a great WYSIWYG word processor.) 1449 SB
501 432 1628 (DECwrite version 2, delivered in 1991, was full of bugs and had a nearly unusable) 1628 SB
501 491 1229 (user interface. From there, it failed to keep up with the times.) 1229 SB
32 0 0 50 50 0 0 0 50 /Symbol font
426 581 36 (\267 ) 75 SB
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501 586 1614 (DECpresent was a slide presentation package. It hit the market in the 1990/1991) 1614 SB
501 645 406 (time frame and died.) 406 SB
32 0 0 50 50 0 0 0 50 /Symbol font
426 735 36 (\267 ) 75 SB
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501 740 1529 (DECdecision was a spreadsheet package with the capability to mix data from) 1529 SB
501 799 1605 (applications all over the computing world. It hit the market in 1989 or 1990, but) 1605 SB
501 858 1146 (was never enthusiastically promoted and never caught on.) 1146 SB
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426 948 36 (\267 ) 75 SB
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501 953 1527 (CDA \(Compound Document Architecture\) was a revolutionary innovation in) 1527 SB
501 1012 1566 (1988. It offered \223live-link\224 capability, which meant a user of a CDA compliant) 1566 SB
501 1071 1604 (application such as DECwrite could mix images, sound, video, and graphics with) 1604 SB
501 1130 1639 (an electronic document. DEC introduced the beginnings of this capability in 1988,) 1639 SB
501 1189 1502 (improved it somewhat in the 1990 timeframe, then let it drop. In mid 1994,) 1502 SB
501 1248 1646 (Microsoft now delivers similar capability to millions of customers in its Office suite) 1646 SB
501 1307 1022 (of products. DEC is not even a footnote in history.) 1022 SB
351 1399 1771 (The operating system groups were not much better, as UNIX and VMS changed strategy) 1771 SB
351 1458 563 (and direction multiple times.) 563 SB
351 1550 1655 (Although nobody would admit it in public, ULTRIX was widely recognized as junk) 1655 SB
351 1609 1709 (because it lacked key capabilities needed by third party applications. DEC invested its) 1709 SB
351 1668 1404 (money on OSF/1, based on work from the Open Software Foundation.) 1404 SB
351 1760 1748 (With the rebirth of Alpha, a new conflict erupted: What should DEC offer to follow the) 1748 SB
351 1819 1765 (current Mips based line of RISC workstations? Should it put OSF/1 on Alpha, or should) 1765 SB
351 1878 1640 (it leave Alpha for the VMS installed base and bet on Mips for its UNIX capability?) 1640 SB
351 1970 1751 (The debates were endless and vice-presidents changed their minds constantly on what to) 1751 SB
351 2029 1689 (do. OSF/1 on Alpha was on again, off again for months. This wreaked havoc on the) 1689 SB
351 2088 1631 (engineering teams, which were forced to operate with no guidance from anyone in) 1631 SB
351 2147 192 (authority.) 192 SB
351 2239 1771 (Finally, it was decided to put OSF/1 on Alpha and publicly commit to OSF/1 on the Mips) 1771 SB
351 2298 572 (based DECstation platforms.) 572 SB
351 2390 1768 (Then the commitment to Mips started to waver as SGI bought Mips and the Mips R4000) 1768 SB
351 2449 1793 (chips became scarce. DEC\222s wavering commitment to Mips based workstations infuriated) 1793 SB
351 2508 1637 (loyal DEC customers who bought them based on DEC promises they had a future.) 1637 SB
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375 2724 1703 ( One of these situations occurred at Mayo Clinic in 1992. The Minneapolis UNIX specialist and I delivered the) 1703 SB
390 2770 1739 (presentations to them about DEC\222s future plans and Mayo made major commitments based on what we told them.) 1739 SB
390 2816 1664 (When the plans changed a few weeks later, I was given the dubious honor of explaining the new plans. DEC) 1664 SB
390 2862 1628 (eventually lost much of Mayo\222s workstation business to HP, as application software vendors canceled their) 1628 SB
390 2908 278 (DECstation plans.) 278 SB
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351 278 1689 (Sometime in 1992, Alpha became the clear priority for OSF/1. DEC finally delivered) 1689 SB
351 337 1739 (OSF/1 in March 1993, to yawns in the marketplace. They never did deliver OSF/1 on a) 1739 SB
351 396 1359 (Mips DECstation platform and the Mips platform died a quiet death.) 1359 SB
351 488 1710 (According to sources, the UNIX engineers are still groping for leadership and have no) 1710 SB
351 547 1785 (idea on what their strategic direction should be. Without goals, they just drift. Morale on) 1785 SB
351 606 1752 (the VMS side is also low as projects are canceled and more and more good people leave) 1752 SB
351 665 376 (for better pastures.) 376 SB
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351 757 1776 (By mid 1994, Microsoft, Lotus, and other PC software companies have long since passed) 1776 SB
351 816 1647 (DEC in the marketplace. Some of their development teams are led by former DEC) 1647 SB
351 875 1704 (software engineers. Meanwhile, the once proud DEC software engineering group is a) 1704 SB
351 934 192 (shambles.) 192 SB
351 2802 390 ( ) 390 SB
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375 2862 1723 (For example, Brian Breton, long time product manager, liason to user groups, and defender of VMS in electronic) 1723 SB
390 2908 1132 (discussion forums and user groups, left in March to join another company.) 1132 SB
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351 279 1518 (Analysis of the Company's Cost) 1518 SB
351 397 395 (Position) 395 SB
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351 539 1782 (DEC\222s revenue per employee has steadily improved over the years. By April 1993, it was) 1782 SB
351 598 1679 (roughly $153,00. Revenue per employee for IBM is $265,000. In order for DEC to) 1679 SB
351 657 1794 (match IBM in revenue per employee, it must slash 40,000 from the payroll of 92,000. See) 1794 SB
351 716 1073 (the appendix for a trend line of revenue per employee.) 1073 SB
351 808 1745 (At 31 percent of revenues at the end of FY 1993, SG&A expenses are way too high. In) 1745 SB
351 867 1709 (the early 1980s, SG&A was less then 20 percent of revenues. SG&A climbed steadily) 1709 SB
351 926 1694 (through the 1980s to 31 percent in 1990, 32 percent in 1991, and 34 percent in 1992.) 1694 SB
351 985 1795 (However, these figures are deceiving because the SG&A figures for 1990, 1991, and 1992) 1795 SB
351 1044 1755 (included special restructuring charges. Something happened in FY 1993 to drive SG&A) 1755 SB
351 1103 1529 (expenses up. The publicly available data gives no hint on what that could be.) 1529 SB
351 1195 1637 (For the first 9 months of FY 1994, the figure was 28.71 percent, a step in the right) 1637 SB
351 1254 188 (direction.) 188 SB
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351 1501 342 (SG&A Percentage) 342 SB
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gs 176 51 1268 1497 CB
1298 1501 141 (30.68%) 141 SB
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1476 1501 141 (32.14%) 141 SB
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351 1549 872 (SG&A Percentage without special restructuring) 872 SB
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351 1744 1755 (Inventory turns steadily increased through the 1980s, from a low of 2.0 in 1982 to 5.1 in) 1755 SB
351 1803 1675 (1993. At first glance, this seems like good news. However, as the economics of the) 1675 SB
351 1862 1711 (computer industry change from low volume, high profit hardware to high volume, low) 1711 SB
351 1921 742 (margin commodities, inventory turns ) 742 SB
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1226 1921 443 ( increase substantially.) 443 SB
351 2013 1692 (Accounts Receivable Days Sales Outstanding also improved from 83 in 1992 to 69 in) 1692 SB
351 2072 1703 (1993. This is the best performance of all the time for which financial data is available.) 1703 SB
351 2131 1335 (The number jumped back to 81 days for the first 9 months of 1994.) 1335 SB
351 2223 1688 (Much of Digital\222s cost comes from the relative increase in cost of product sales. The) 1688 SB
351 2282 1630 (following table vividly illustrates the sinking profit margins on product sales as the) 1630 SB
351 2341 1730 (industry moves towards high-volume, low-margin products. For comparison, note that) 1730 SB
351 2400 1399 (service expense percentages remained steady through the same period.) 1399 SB
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351 2593 974 (Cost of Product Sales as a percentage of product) 974 SB
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351 2744 975 (Service Expense as a percentage of Service Sales) 975 SB
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1384 2744 155 (61.43%) 155 SB
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351 279 1268 (Analysis of the Company's) 1268 SB
351 397 678 (Differentiation) 678 SB
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351 539 1762 (By mid 1994, Digital has two major differentiating factors left; clustering technology and) 1762 SB
351 598 1617 (Alpha. DEC\222s modular storage enclosures are also innovative and unique. In the) 1617 SB
351 657 1771 (commodity markets, DEC PCs, disk drives, terminals, and printers are generally the same) 1771 SB
351 716 558 (as everyone else\222s offerings.) 558 SB
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351 841 372 (Clustering) 372 SB
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351 953 1712 (Clustering is the ability to connect several computer systems into a single management) 1712 SB
351 1012 1765 (domain, such that users see a single system instead of disparate systems. The technology) 1765 SB
351 1071 1778 (offers several advantages to users and system managers. For example, if one system fails,) 1778 SB
351 1130 1630 (another system in the cluster can take over the failed system\222s processing load and) 1630 SB
351 1189 1742 (continue. Dataquest recently evaluated cluster offerings from several vendors and rated) 1742 SB
351 1248 414 (VMSclusters on top.) 414 SB
351 1340 1651 (VMS is still widely recognized as an excellent operating system. It is known for its) 1651 SB
351 1399 1799 (stability and robustness in critical, high availability environments. VMS first hit the market) 1799 SB
351 1458 1736 (in 1978 and introduced clustering to the world in 1984. Ten years later, it still provides) 1736 SB
351 1517 1594 (clustering and high availability computing capabilities unmatched in the industry.) 1594 SB
351 1609 1773 (Marketing is worse than poor as DEC allowed the competition to paint VMS as a legacy,) 1773 SB
351 1668 1739 (old, proprietary product with limited future life. Instead of continuing innovation, DEC) 1739 SB
351 1727 1780 (allowed a massive self-fulfilling prophesy to damage its reputation possibly beyond repair.) 1780 SB
351 1786 1686 (VMS may well fade from memory as other vendors catch up and pass its capabilities.) 1686 SB
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351 2023 1780 (This technology still has the potential to rule the world. It is still the only pure 64 bit chip) 1780 SB
351 2082 1769 (available. 64 bit capability is fast becoming important as users deal with larger and larger) 1769 SB
351 2141 1761 (databases and programs. The difference between traditional 32 bit systems and 64 bits is) 1761 SB
351 2200 186 (dramatic:) 186 SB
351 2292 1727 (With 32 bits, it is theoretically possible to map the contents of a typical 1994 disk drive) 1727 SB
351 2351 1665 (into a computer\222s main memory. With 64 bits, it is theoretically possible to map the) 1665 SB
351 2410 1677 (contents of every disk drive ever built since the dawn of time into a computer\222s main) 1677 SB
351 2469 175 (memory.) 175 SB
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375 2724 1770 ( A 32 bit word allows a computer to map 2^32 addresses, or roughly 4 GB \(4 billion characters\). In mid 1994, most) 1770 SB
390 2770 1665 (modern disk drives hold roughly 2 GB of data. A 64 bit word allows a computer to map 2^64 addresses, or 4) 1665 SB
390 2816 1702 (billion sets of 4 billion characters each. Assuming a disk no bigger than 4 billion characters, this means 64 bits) 1702 SB
390 2862 1664 (provides the capability to store the contents of 4 billion disk drives. It will be a long time before the industry) 1664 SB
390 2908 484 (produces that many disk drives!) 484 SB
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351 278 1665 (The Alpha architecture gets rave reviews from nearly all technical evaluations and is) 1665 SB
351 337 1765 (priced just above Intel\222s Pentium chip. At one time, DEC had plans for a low cost Alpha) 1765 SB
351 396 1737 (chip to make another run at the PC world and knock Intel out of its leadership position.) 1737 SB
351 488 1783 (If DEC can recruit even a few credible partners and fix its marketing problems, it may still) 1783 SB
351 547 1024 (emerge from its troubles as a force to be dealt with.) 1024 SB
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351 279 1268 (Analysis of the Company's) 1268 SB
351 397 1381 (Leadership and Organization) 1381 SB
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351 539 1757 (It is sickening for a long-time member of the DEC community to watch incompetent and) 1757 SB
351 598 1732 (uncaring management ruin the company. The recent leadership record of DEC\222s senior) 1732 SB
351 657 579 (management is unimpressive:) 579 SB
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351 782 737 (Lack of any Strategy) 737 SB
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351 894 1718 (As one long CIO of a long time DEC business partner put it: "When I go to Redmond) 1718 SB
351 953 1754 (and listen to Microsoft non-disclosures, everyone I talk to tells me the same story. They) 1754 SB
351 1012 1751 (could all give the same presentation. But when I go to New England and listen to DEC,) 1751 SB
351 1071 1712 (everyone seems to have their own agenda and everyone tells me a different story. The) 1712 SB
351 1130 1793 (people at Microsoft know where they want to be. The people at DEC can't seem to figure) 1793 SB
351 1189 139 (it out.") 139 SB
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490 1183 32 (37) 32 SB
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351 1281 1774 (This lack of strategy explains the many organizational failures. After DEC\222s success with) 1774 SB
351 1340 1706 (VAX/VMS, the company lost its mission. Is DEC a chip manufacturing company? Is) 1706 SB
351 1399 1649 (DEC a computer system company, a software company, a UNIX company, a VMS) 1649 SB
351 1458 1784 (company, a PC company? Without a clear mission and without a definition of success, no) 1784 SB
351 1517 696 (amount of reorganization will help.) 696 SB
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351 1642 1782 (Illusory Leadership - Why is Management Hiding?) 1782 SB
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351 1754 1723 (After some senior DEC vice-presidents stated publicly that VMS is intended for DEC's) 1723 SB
351 1813 1789 (installed base and growth will come from UNIX related sales, the DEC Users group in the) 1789 SB
351 1872 1704 (Boston area -- DEC's headquarters -- met in the fall of 1993 and invited DEC\222s senior) 1704 SB
351 1931 1749 (management to listen to their concerns. These people, with millions of dollars and years) 1749 SB
351 1990 1742 (of training invested in VMS, represented some of DEC\222s largest customers from DEC\222s) 1742 SB
351 2049 1700 (home turf. Those vice-president statements sent a signal to these customers that their) 1700 SB
351 2108 1766 (investment in information technology over the years would soon be obsolete. Obviously,) 1766 SB
351 2167 424 (they were concerned.) 424 SB
351 2259 1772 (They sent invitations with several weeks advance notice and publicized the meeting in the) 1772 SB
351 2318 1788 (media. Yet, incredibly, nobody from DEC's senior management showed up. Instead, they) 1788 SB
351 2377 1769 (sent Brian Breton, a VMS product manager with no authority to change company policy,) 1769 SB
351 2436 1593 (to defend DEC's strategy or lack of strategy. Brian did an admirable job, but his) 1593 SB
351 2495 1539 (statements carried no credibility. Brian subsequently left DEC in April, 1994.) 1539 SB
351 2587 1605 (In 1992, Digital in Minneapolis had the opportunity to become a major vendor at) 1605 SB
351 2646 1750 (Fingerhut. Fingerhut was interested in workstations, servers, and software development) 1750 SB
351 2705 1796 (to run its warehouses. The local Digital sales team put together a comprehensive proposal) 1796 SB
351 2802 390 ( ) 390 SB
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375 2862 1741 (Conversation with Mike Farrell, vice president of Information Services at NCS, Eden Prairie, Minnesota, May 10,) 1741 SB
390 2908 1601 (1994. People from Koch Refinery and other DEC customers in the Twin Cities made similar statements.) 1601 SB
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351 278 1763 (and submitted the proposal to Fingerhut. Fingerhut asked to meet with a DEC executive) 1763 SB
351 337 1770 (for assurances that DEC would continue and enhance the proposed products. Incredibly,) 1770 SB
351 396 1676 (the Minneapolis sales rep went through 18 DEC vice-presidents before he found one) 1676 SB
351 455 613 (willing to meet with Fingerhut.) 613 SB
351 547 1757 (Groups of senior field technical people meet twice yearly in New Hampshire. Ken Olsen) 1757 SB
351 606 1777 (addressed both sets of meetings in 1991, listened intently to presentations from attendees,) 1777 SB
351 665 1762 (and even argued vehemently over some points. We invited Bob Palmer and several vice-) 1762 SB
351 724 1771 (presidents to subsequent meetings. Each time, they accepted, only to cancel or disappear) 1771 SB
351 783 1728 (on mysterious vacations at the last minute. They had the opportunity to hear first-hand) 1728 SB
351 842 649 (feedback and chose not to listen.) 649 SB
351 934 1800 (These stories are typical of DEC senior management. Contrary to press articles, the grass-) 1800 SB
351 993 1669 (roots view of management shows a group of people more interested in meeting with) 1669 SB
351 1052 825 (eachother than customers and employees.) 825 SB
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351 1177 314 (Fair Play) 314 SB
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351 1289 544 (This passage from a recent ) 544 SB
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895 1289 391 (Wall Street Journal) 391 SB
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1286 1289 770 ( article describes the attitude of DEC\222s) 770 SB
351 1348 789 (current senior management on fair play:) 789 SB
426 1440 1691 (Last month, Mr. Lucente visited Dallas to meet with some of his troops in an attempt) 1691 SB
426 1499 1610 (to boost morale. His message: I\222m here to listen -- ask me anything. But when a) 1610 SB
426 1558 1676 (salesman requested elaboration of the company\222s strategy, which he called \221unclear\222,) 1676 SB
426 1617 1703 (Mr. Lucente shot back that he was \221sick of answering this question,\222 according to one) 1703 SB
426 1676 1620 (attendee. Mr. Lucente then \221took his head off, belittling him in front of the whole) 1620 SB
426 1735 1026 (room Needless to say, no one else asked anything.\222) 1026 SB
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1452 1729 32 (38) 32 SB
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351 1827 1699 (Lucente was subsequently fired in April, 1994. But several of his sales and marketing) 1699 SB
351 1886 1686 (vice-presidents and earlier middle managers remain. The ones I met carried the same) 1686 SB
351 1945 960 (hostile attitude towards rank and file employees.) 960 SB
351 2037 1778 (The recent record on fair play leaves much to be desired. Nearly every day, the employee) 1778 SB
351 2096 1781 (electronic grapevine carried yet another story about management misdeeds. These stories) 1781 SB
351 2155 1191 (could easily fill a book. The following examples are typical:) 1191 SB
351 2247 1618 (In July, 1993, after billions in losses and one profitable quarter, the DEC board of) 1618 SB
351 2306 1709 (directors raised Bob Palmer\222s salary from $770,000 per year to $990,000 per year -- a) 1709 SB
351 2365 1627 (28.5 percent increase. In November, 1994, DEC cut its tuition reimbursement for) 1627 SB
351 2424 1672 (employee education. Senior management relented after protests erupted all over the) 1672 SB
351 2483 1726 (company and pushed the decision down to local management. But, in a sleight of hand) 1726 SB
351 2542 1678 (worthy of Houdini, they gave no budget to local offices to fund employee education.) 1678 SB
351 2634 1789 (In June, 1993, after hiring dozens of new vice-presidents, 9 months of offsite planning and) 1789 SB
351 2693 1753 (strategy meetings, and endless discussions, Bob Palmer\222s new CBU structure was finally) 1753 SB
351 2802 390 ( ) 390 SB
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375 2862 1117 ( \223At Digital Equipment, A Resignation Reveals Key Problem: Selling.\224, ) 1117 SB
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1492 2861 364 (The Wall Street Journal) 364 SB
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1856 2862 254 (, April 26, 1994,) 254 SB
390 2908 110 (page 1.) 110 SB
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351 278 1746 (in place. Senior management sent an electronic mail message to field sales and software) 1746 SB
351 337 1676 (consultants to either accept arbitrary new job assignments or face de-facto dismissal.) 1676 SB
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2027 331 32 (39) 32 SB
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351 396 842 (Employees were given 24 hours to decide.) 842 SB
351 488 1744 (As week after week after week went by, each week brought a new rumor of yet another) 1744 SB
351 547 1661 (layoff round as managers would sneak away for secret, offsite meetings. Life inside) 1661 SB
351 606 1771 (Digital Equipment Corporation became very unpleasant during 1992 and 1993 as the fear) 1771 SB
351 665 454 (and paranoia mounted.) 454 SB
351 2756 390 ( ) 390 SB
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351 2810 24 (39) 24 SB
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375 2816 1698 (I saw the memos to people in the DEC office in Minneapolis. I made electronic inquiries to friends all over the) 1698 SB
390 2862 1745 (United States and found everyone in Sales, technical Sales Support, and Consulting, was given a similar letter and) 1745 SB
390 2908 167 (ultimatum.) 167 SB
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351 279 1771 (Appraisal of the Company's Handling) 1771 SB
351 397 695 (of its Situation) 695 SB
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351 539 412 (Bright spots include:) 412 SB
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426 629 36 (\267 ) 75 SB
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501 634 350 (Alpha technology) 350 SB
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426 691 36 (\267 ) 75 SB
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501 696 575 (hardware system engineering) 575 SB
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426 753 36 (\267 ) 75 SB
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501 758 409 (the Alpha VMS port) 409 SB
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426 815 36 (\267 ) 75 SB
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501 820 80 (PCs) 80 SB
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426 877 36 (\267 ) 75 SB
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501 882 146 (storage) 146 SB
351 991 240 (Low points:) 240 SB
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426 1081 36 (\267 ) 75 SB
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501 1086 1457 (lack of any coherent strategy compounded by internal conflicts of interest) 1457 SB
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426 1143 36 (\267 ) 75 SB
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501 1148 496 (too many vice-presidents) 496 SB
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426 1205 36 (\267 ) 75 SB
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501 1210 818 (a losing attitude throughout the company) 818 SB
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426 1267 36 (\267 ) 75 SB
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501 1272 707 (chronic sales and marketing failures) 707 SB
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426 1329 36 (\267 ) 75 SB
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501 1334 1105 (software engineering other than the VMS port to Alpha) 1105 SB
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426 1391 36 (\267 ) 75 SB
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501 1396 336 (the Mips debacle) 336 SB
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426 1453 36 (\267 ) 75 SB
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501 1458 1061 (outdated business practices that make customers mad) 1061 SB
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426 1515 36 (\267 ) 75 SB
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501 1520 842 (failure to recruit significant Alpha partners) 842 SB
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351 1662 1469 (Lack of Strategy and Conflicts of Interest) 1469 SB
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351 1774 871 (If Digital is to survive, Palmer and his team ) 871 SB
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1222 1774 107 (must ) 107 SB
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1329 1774 769 (address the strategy issue immediately.) 769 SB
351 1833 1628 (By mid 1994, since nobody can articulate any coherent strategy, people across the) 1628 SB
351 1892 1742 (company fill the vacuum with their own. Without any guiding plan, the strategy for one) 1742 SB
351 1951 1660 (group often conflicts with strategies of other groups. This leads to vice presidential) 1660 SB
351 2010 1145 (fiefdoms, who regularly duke it out in endless turf battles.) 1145 SB
351 2102 1740 (Operating systems are a prime example. Digital offers VMS, UNIX, and Windows NT.) 1740 SB
351 2161 1745 (Nobody admits to a conflict in public, but behind the scenes, the UNIX group and VMS) 1745 SB
351 2220 1716 (group have been at war for years. Both are after eachother\222s markets and both groups) 1716 SB
351 2279 1798 (regularly squash marketing and promotion efforts by the other group. This war plays itself) 1798 SB
351 2338 1728 (out daily inside DEC with constant plots within plots within plots and political schemes) 1728 SB
351 2397 1734 (designed to gain advantage at the expense of the other camp. Windows NT is not yet a) 1734 SB
351 2456 1332 (major DEC investment, but everyone is already suspicious of them.) 1332 SB
351 2548 1664 (Conflicts of interest are everywhere. At the grass roots, Customer Service wants to) 1664 SB
351 2607 1748 (expand its base by offering consulting services. But Digital Consulting offers consulting) 1748 SB
351 2666 1593 (services. So Customer Service and Digital Consulting duke it out for consulting) 1593 SB
351 2725 195 (contracts.) 195 SB
351 2817 1754 (In sales, the end-user reps and indirect channels reps regularly duke it out over customer) 1754 SB
351 2876 1763 (situations. The channels reps want to see the sale go through their favorite distributor or) 1763 SB
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351 278 1712 (reseller. The end-user reps want to sell directly to the end user. The politics often get) 1712 SB
351 337 1271 (nasty as each camp hatches plots to outmaneuver the other side.) 1271 SB
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351 462 46 (T) 43 SB
394 462 375 (oo Many V) 372 SB
766 462 511 (ice Presidents) 511 SB
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351 574 877 (At last count, DEC had 126 vice-presidents.) 877 SB
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1228 568 32 (40) 32 SB
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1260 574 773 ( It is mind-boggling why any company) 773 SB
351 633 1725 (needs this many vice-presidents. I clearly remember watching the electronic memos fly) 1725 SB
351 692 1787 (almost daily announcing yet another new vice-president of something. For example, Sales) 1787 SB
351 751 1627 (has an overall vice-president company wide. Russ Gullotti is vice-president of the) 1627 SB
351 810 1792 (Americas zone. Scott Roeth is vice-president of sales in the United States. There are also) 1792 SB
351 869 1711 (regional vice-presidents and several industry specific vice-presidents left over from the) 1711 SB
351 928 1776 (CBU days. At the grass roots, nobody really knows who reports to whom or which vice-) 1776 SB
351 987 1709 (president is in charge. Many people believe the vice-presidents do not know who is in) 1709 SB
351 1046 1593 (charge either, as they hatch plots against one another in an endless guerrilla war.) 1593 SB
351 1138 1746 (Meanwhile, as DEC continues to lose market share and lay off employees, the managers) 1746 SB
351 1197 1656 (and vice-presidents tend to get rid of the people with weak power bases. These are) 1656 SB
351 1256 1773 (usually the technical support people at the bottom of the pyramid. These people typically) 1773 SB
351 1315 1660 (find jobs at other companies or start their own businesses in direct competition with) 1660 SB
351 1374 1601 (Digital. This further weakens the company and accelerates the downward spiral.) 1601 SB
351 1466 1703 (The dumb ideas, poor morale, losing attitude, and many of the failures over the recent) 1703 SB
351 1525 1780 (years can be traced directly back to internal conflicts of interest, political fiefdoms, hidden) 1780 SB
351 1584 1789 (agendas, and seething animosities inside DEC. The system forces managers to spend their) 1789 SB
351 1643 1777 (energy waging internal political wars instead of serving customers. Employees watch this) 1777 SB
351 1702 1800 (happen, eventually become cynical, and eventually either leave or are laid off. DEC is on a) 1800 SB
351 1761 1677 (viscous downward spiral that will only stop if top management takes decisive action.) 1677 SB
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351 1886 728 (What to do about it?) 728 SB
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351 1998 1777 (After nearly 40 pages documenting DEC\222s problems in detail, this section offers some get) 1777 SB
351 2057 1328 (well suggestions from a long time member of the DEC community.) 1328 SB
351 2149 1784 (By mid 1994, DEC still has a limited opportunity to succeed but only if it takes immediate) 1784 SB
351 2208 346 (corrective action.) 346 SB
351 2300 1740 (First, senior management must come out from the shadows and interact with employees) 1740 SB
351 2359 1789 (and customers at the grass roots. Beyond face to face meetings, they must get involved in) 1789 SB
351 2418 1651 (the electronic marketplace of ideas that regularly fly around the internet and DEC\222s) 1651 SB
351 2477 1663 (internal network. DEC\222s electronic network is one of the most powerful interactive) 1663 SB
351 2536 1673 (communication mediums on earth and rank and file employees are expert at using its) 1673 SB
351 2595 1787 (capabilities to keep in touch with eachother and customers. At the press of a few buttons,) 1787 SB
351 2654 1754 (people can send information to thousands of employees and customers around the world) 1754 SB
351 2713 1747 (in seconds The top DEC managers serve their egos but ignore a motherlode of valuable) 1747 SB
351 2802 390 ( ) 390 SB
741 2802 221 ( ) 221 SB
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375 2862 1721 ( DEC keeps an internal electronic company database, called VTX,. A friend in the Minneapolis office looked up) 1721 SB
390 2908 402 (this figure in VTX for me.) 402 SB
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351 278 1611 (information by failing to exploit the electronic communication capabilities at their) 1611 SB
351 337 199 (fingertips.) 199 SB
351 429 1709 (Using data gathered from electronic conversations and face to face meetings, come up) 1709 SB
351 488 1786 (with a simple, specific, coherent strategy. Write it down in one page or less and distribute) 1786 SB
351 547 1689 (it to all employees. Use the electronic network to test it informally and get feedback.) 1689 SB
351 606 1683 (Then refine it and test it again until it is right. Once the strategy is finished, convince) 1683 SB
351 665 1560 (everyone to buy into this strategy and then spin off operations not central to it.) 1560 SB
351 757 1638 (DEC management has a huge credibility problem with employees, Wall Street, and) 1638 SB
351 816 1754 (customers. They can only overcome this problem by taking a genuine interest in the real) 1754 SB
351 875 1275 (marketplace and forgetting about internal political backstabbing.) 1275 SB
351 967 1615 (The analysts and pundits call for radical restructuring, massive layoffs, and selling) 1615 SB
351 1026 1741 (businesses. This may well be the correct course of action. But before blindly stumbling) 1741 SB
351 1085 1612 (into the next quick cure and lurching wildly from one strategy to the next, DEC\222s) 1612 SB
351 1144 1791 (management absolutely must begin listening to its employees and customers and develop a) 1791 SB
351 1203 1711 (coherent strategy that makes sense. Management needs to understand why it is taking) 1711 SB
351 1262 1726 (action before doing it. Once the strategy is in place, make the bold moves necessary to) 1726 SB
351 1321 205 (execute it.) 205 SB
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351 1446 988 (Some Specific Suggestions) 988 SB
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351 1558 1780 (These are suggestions from a former employee with a strong interest in the survival of the) 1780 SB
351 1617 1674 (DEC marketplace. I offer these as a test to begin discussions, not as a final product.) 1674 SB
351 1676 1618 (These suggestions might be dumb ideas. The only way to find out: offer them for) 1618 SB
351 1735 744 (discussion and see what people think.) 744 SB
351 1827 1615 (DEC needs to quit trying to kill VMS. VMS and clustering are the only software) 1615 SB
351 1886 1717 (capabilities DEC has left that are unique. Instead of apologizing and trying to milk the) 1717 SB
351 1945 1779 (product, DEC needs to actively develop and market it. At one time, VMS had the largest) 1779 SB
351 2004 1790 (installed base and the richest set of application software of any computer operating system) 1790 SB
351 2063 981 (on earth. In mid 1994, that base is shrinking fast.) 981 SB
351 2155 1692 (Begin active development again on DECwindows and offer a VMS PC with a usable,) 1692 SB
351 2214 1763 (standalone configuration for around $3000. Add a MS-Windows programming interface) 1763 SB
351 2273 1758 (and recruit Microsoft and other PC application vendors to offer their applications on this) 1758 SB
351 2332 182 (platform.) 182 SB
351 2424 1750 (Spin off semiconductor operations into a wholly owned subsidiary or separate company.) 1750 SB
351 2483 1708 (This will help DEC find alpha partners to achieve its goal of making Alpha an industry) 1708 SB
351 2542 182 (standard.) 182 SB
351 2634 1725 (Spin off Storage, PCs, Consulting, Customer Service, Application Software, Terminals) 1725 SB
351 2693 1746 (and Printers, and Databases \(RDB\) into subsidiary companies. Each of these businesses) 1746 SB
351 2752 1724 (are separate entities with their own interests and operating conventions. It might make) 1724 SB
351 2811 1735 (sense for them to support themselves as separate businesses. They would live or die on) 1735 SB
351 2870 337 (their own merits.) 337 SB
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351 278 1766 (This would leave the parent company with a core system business based mostly on Alpha) 1766 SB
351 337 1762 (platforms. The parent company would concentrate on these platforms and offer a choice) 1762 SB
351 396 1648 (of VMS, OSF/1 \(UNIX\), Windows NT, and perhaps Novell Netware for operating) 1648 SB
351 455 1725 (systems. Customers and distributors would contract directly with Storage, Consulting,) 1725 SB
351 514 1792 (Customer Service, etc. for application software, support, and peripheral components. In a) 1792 SB
351 573 1734 (free market, customers and distributors would also be free to contract with competitors) 1734 SB
351 632 574 (for value added components.) 574 SB
351 724 1723 (In large system integration situations, the Consulting company would contract with the) 1723 SB
351 783 1751 (DEC parent or another system vendor for hardware platforms, and with other subsidiary) 1751 SB
351 842 1253 (companies or outside vendors for other components as needed.) 1253 SB
351 934 1799 (The various operating systems offered by the remaining DEC parent company would likely) 1799 SB
351 993 1771 (compete with eachother for the same markets. But this time, instead of guerrilla warfare,) 1771 SB
351 1052 1656 (actively promote the competition. The sales force and distributors would be free to) 1656 SB
351 1111 1764 (choose products that make most sense in the individual situation, and engineering groups) 1764 SB
351 1170 1588 (would openly compete with eachother for sales in an internal market. This way,) 1588 SB
351 1229 1494 (prosperity would be determined by market acceptance, not internal politics.) 1494 SB
351 1321 1741 (Time is fast running out. DEC can still save itself by taking positive action. And, in the) 1741 SB
351 1380 1784 (spirit of a free enterprise economy, if it takes the right steps, it will prosper. If it takes the) 1784 SB
351 1439 464 (wrong steps, it will die.) 464 SB
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63 217 2334 (Appendix - Financial Performance over Several Y) 2328 SB
2391 217 207 (ears) 207 SB
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63 392 1943 (Operating Summary -- Fiscal 1982 through Fiscal 1993) 1943 SB
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2689 277 72 (1984) 72 SB
gr
gs 188 39 2818 276 CB
2877 277 72 (1983) 72 SB
gr
gs 187 39 3006 276 CB
3064 277 72 (1982) 72 SB
gr
32 0 0 50 50 0 0 0 46 /Helvetica-BoldOblique /font10 ANSIFont font
gs 894 59 52 319 CB
63 321 673 (Financial Position Summary) 673 SB
gr
32 0 0 33 33 0 0 0 31 /Helvetica /font8 ANSIFont font
gs 894 39 52 384 CB
63 385 155 (Inventories) 155 SB
gr
gs 187 39 946 384 CB
1024 385 99 ($1,755) 99 SB
gr
gs 187 39 1133 384 CB
1211 385 99 ($1,614) 99 SB
gr
gs 187 39 1320 384 CB
1398 385 99 ($1,595) 99 SB
gr
gs 188 39 1507 384 CB
1586 385 99 ($1,538) 99 SB
gr
gs 187 39 1695 384 CB
1773 385 99 ($1,638) 99 SB
gr
gs 187 39 1882 384 CB
1960 385 99 ($1,575) 99 SB
gr
gs 188 39 2069 384 CB
2148 385 99 ($1,453) 99 SB
gr
gs 187 39 2257 384 CB
2335 385 99 ($1,200) 99 SB
gr
gs 187 39 2444 384 CB
2522 385 99 ($1,756) 99 SB
gr
gs 187 39 2631 384 CB
2709 385 99 ($1,852) 99 SB
gr
gs 188 39 2818 384 CB
2897 385 99 ($1,354) 99 SB
gr
gs 187 39 3006 384 CB
3084 385 99 ($1,137) 99 SB
gr
gs 894 39 52 427 CB
63 428 534 (Accounts receivable, net of allowance) 534 SB
gr
gs 187 39 946 427 CB
1024 428 99 ($3,020) 99 SB
gr
gs 187 39 1133 427 CB
1211 428 99 ($3,594) 99 SB
gr
gs 187 39 1320 427 CB
1398 428 99 ($3,317) 99 SB
gr
gs 188 39 1507 427 CB
1586 428 99 ($3,207) 99 SB
gr
gs 187 39 1695 427 CB
1773 428 99 ($2,965) 99 SB
gr
gs 187 39 1882 427 CB
1960 428 99 ($2,592) 99 SB
gr
gs 188 39 2069 427 CB
2148 428 99 ($2,312) 99 SB
gr
gs 187 39 2257 427 CB
2335 428 99 ($1,903) 99 SB
gr
gs 187 39 2444 427 CB
2522 428 99 ($1,539) 99 SB
gr
gs 187 39 2631 427 CB
2709 428 99 ($1,527) 99 SB
gr
gs 188 39 2818 427 CB
2897 428 99 ($1,125) 99 SB
gr
gs 187 39 3006 427 CB
3111 428 72 ($808) 72 SB
gr
gs 894 39 52 470 CB
63 471 482 (Net property, plant and equipment) 482 SB
gr
gs 187 39 946 470 CB
1024 471 99 ($3,178) 99 SB
gr
gs 187 39 1133 470 CB
1211 471 99 ($3,570) 99 SB
gr
gs 187 39 1320 470 CB
1398 471 99 ($3,778) 99 SB
gr
gs 188 39 1507 470 CB
1586 471 99 ($3,868) 99 SB
gr
gs 187 39 1695 470 CB
1773 471 99 ($3,646) 99 SB
gr
gs 187 39 1882 470 CB
1960 471 99 ($3,095) 99 SB
gr
gs 188 39 2069 470 CB
2148 471 99 ($2,127) 99 SB
gr
gs 187 39 2257 470 CB
2335 471 99 ($1,867) 99 SB
gr
gs 187 39 2444 470 CB
2522 471 99 ($1,731) 99 SB
gr
gs 187 39 2631 470 CB
2709 471 99 ($1,511) 99 SB
gr
gs 188 39 2818 470 CB
2897 471 99 ($1,340) 99 SB
gr
gs 187 39 3006 470 CB
3084 471 99 ($1,605) 99 SB
gr
gs 894 39 52 513 CB
63 514 174 (Total assets) 174 SB
gr
gs 187 39 946 513 CB
1006 514 117 ($10,950) 117 SB
gr
gs 187 39 1133 513 CB
1193 514 117 ($11,284) 117 SB
gr
gs 187 39 1320 513 CB
1380 514 117 ($11,875) 117 SB
gr
gs 188 39 1507 513 CB
1568 514 117 ($11,655) 117 SB
gr
gs 187 39 1695 513 CB
1755 514 117 ($10,668) 117 SB
gr
gs 187 39 1882 513 CB
1942 514 117 ($10,112) 117 SB
gr
gs 188 39 2069 513 CB
2148 514 99 ($8,407) 99 SB
gr
gs 187 39 2257 513 CB
2335 514 99 ($7,173) 99 SB
gr
gs 187 39 2444 513 CB
2522 514 99 ($6,369) 99 SB
gr
gs 187 39 2631 513 CB
2709 514 99 ($5,593) 99 SB
gr
gs 188 39 2818 513 CB
2897 514 99 ($4,541) 99 SB
gr
gs 187 39 3006 513 CB
3084 514 99 ($4,024) 99 SB
gr
gs 894 39 52 556 CB
63 557 215 (Long term debt) 215 SB
gr
gs 187 39 946 556 CB
1024 557 99 ($1,018) 99 SB
gr
gs 187 39 1133 556 CB
1256 557 54 ($42) 54 SB
gr
gs 187 39 1320 556 CB
1425 557 72 ($150) 72 SB
gr
gs 188 39 1507 556 CB
1613 557 72 ($150) 72 SB
gr
gs 187 39 1695 556 CB
1800 557 72 ($136) 72 SB
gr
gs 187 39 1882 556 CB
1987 557 72 ($124) 72 SB
gr
gs 188 39 2069 556 CB
2175 557 72 ($269) 72 SB
gr
gs 187 39 2257 556 CB
2362 557 72 ($333) 72 SB
gr
gs 187 39 2444 556 CB
2549 557 72 ($837) 72 SB
gr
gs 187 39 2631 556 CB
2736 557 72 ($441) 72 SB
gr
gs 188 39 2818 556 CB
2942 557 54 ($93) 54 SB
gr
gs 187 39 3006 556 CB
3129 557 54 ($92) 54 SB
gr
gs 894 39 52 599 CB
63 600 285 (Stockholders' equity) 285 SB
gr
gs 187 39 946 599 CB
1024 600 99 ($4,885) 99 SB
gr
gs 187 39 1133 599 CB
1211 600 99 ($4,931) 99 SB
gr
gs 187 39 1320 599 CB
1398 600 99 ($7,624) 99 SB
gr
gs 188 39 1507 599 CB
1586 600 99 ($8,182) 99 SB
gr
gs 187 39 1695 599 CB
1773 600 99 ($8,036) 99 SB
gr
gs 187 39 1882 599 CB
1960 600 99 ($7,510) 99 SB
gr
gs 188 39 2069 599 CB
2148 600 99 ($6,294) 99 SB
gr
gs 187 39 2257 599 CB
2335 600 99 ($5,728) 99 SB
gr
gs 187 39 2444 599 CB
2522 600 99 ($4,555) 99 SB
gr
gs 187 39 2631 599 CB
2709 600 99 ($3,979) 99 SB
gr
gs 188 39 2818 599 CB
2897 600 99 ($3,541) 99 SB
gr
gs 187 39 3006 599 CB
3084 600 99 ($3,165) 99 SB
gr
gs 894 39 52 642 CB
63 643 429 (Stockholders' equity per share) 429 SB
gr
gs 187 39 946 642 CB
1024 643 99 ($36.19) 99 SB
gr
gs 187 39 1133 642 CB
1211 643 99 ($38.58) 99 SB
gr
gs 187 39 1320 642 CB
1398 643 99 ($61.18) 99 SB
gr
gs 188 39 1507 642 CB
1586 643 99 ($66.76) 99 SB
gr
gs 187 39 1695 642 CB
1773 643 99 ($66.12) 99 SB
gr
gs 187 39 1882 642 CB
1960 643 99 ($59.47) 99 SB
gr
gs 188 39 2069 642 CB
2148 643 99 ($49.87) 99 SB
gr
gs 187 39 2257 642 CB
2335 643 99 ($44.54) 99 SB
gr
gs 187 39 2444 642 CB
2522 643 99 ($38.43) 99 SB
gr
gs 187 39 2631 642 CB
2709 643 99 ($34.42) 99 SB
gr
gs 188 39 2818 642 CB
2897 643 99 ($31.42) 99 SB
gr
gs 187 39 3006 642 CB
3084 643 99 ($28.65) 99 SB
gr
32 0 0 50 50 0 0 0 46 /Helvetica-BoldOblique /font10 ANSIFont font
gs 894 59 52 685 CB
63 687 749 (General Information and Ratios) 749 SB
gr
32 0 0 33 33 0 0 0 31 /Helvetica /font8 ANSIFont font
gs 894 39 52 750 CB
63 751 178 (Current ratio) 178 SB
gr
gs 187 39 946 750 CB
958 751 72 (1.8:1) 72 SB
gr
gs 187 39 1133 750 CB
1145 751 72 (1.4:1) 72 SB
gr
gs 187 39 1320 750 CB
1332 751 72 (2.0:1) 72 SB
gr
gs 188 39 1507 750 CB
1520 751 72 (2.3:1) 72 SB
gr
gs 187 39 1695 750 CB
1707 751 72 (2.0:1) 72 SB
gr
gs 187 39 1882 750 CB
1894 751 72 (2.9:1) 72 SB
gr
gs 188 39 2069 750 CB
2082 751 72 (3.4:1) 72 SB
gr
gs 187 39 2257 750 CB
2269 751 72 (4.9:1) 72 SB
gr
gs 187 39 2444 750 CB
2456 751 72 (4.9:1) 72 SB
gr
gs 187 39 2631 750 CB
2643 751 72 (3.8:1) 72 SB
gr
gs 188 39 2818 750 CB
2831 751 72 (3.9:1) 72 SB
gr
gs 187 39 3006 750 CB
3018 751 72 (4.1:1) 72 SB
gr
gs 894 39 52 790 CB
63 791 167 (Quick Ratio) 167 SB
gr
gs 187 39 946 790 CB
958 791 72 (1.2:1) 72 SB
gr
gs 187 39 1133 790 CB
1145 791 72 (1.0:1) 72 SB
gr
gs 187 39 1320 790 CB
1332 791 72 (1.4:1) 72 SB
gr
gs 188 39 1507 790 CB
1520 791 72 (1.6:1) 72 SB
gr
gs 187 39 1695 790 CB
1707 791 72 (1.9:1) 72 SB
gr
gs 187 39 1882 790 CB
1894 791 72 (2.0:1) 72 SB
gr
gs 188 39 2069 790 CB
2082 791 72 (2.4:1) 72 SB
gr
gs 187 39 2257 790 CB
2269 791 72 (3.5:1) 72 SB
gr
gs 187 39 2444 790 CB
2456 791 72 (2.8:1) 72 SB
gr
gs 187 39 2631 790 CB
2643 791 72 (1.9:1) 72 SB
gr
gs 188 39 2818 790 CB
2831 791 72 (2.0:1) 72 SB
gr
gs 187 39 3006 790 CB
3018 791 72 (2.3:1) 72 SB
gr
gs 894 39 52 833 CB
63 834 229 (Working Capital) 229 SB
gr
gs 187 39 946 833 CB
1024 834 99 ($2,964) 99 SB
gr
gs 187 39 1133 833 CB
1211 834 99 ($2,015) 99 SB
gr
gs 187 39 1320 833 CB
1398 834 99 ($3,777) 99 SB
gr
gs 188 39 1507 833 CB
1586 834 99 ($4,332) 99 SB
gr
gs 187 39 1695 833 CB
1773 834 99 ($4,501) 99 SB
gr
gs 187 39 1882 833 CB
1960 834 99 ($4,516) 99 SB
gr
gs 188 39 2069 833 CB
2148 834 99 ($4,377) 99 SB
gr
gs 187 39 2257 833 CB
2335 834 99 ($4,223) 99 SB
gr
gs 187 39 2444 833 CB
2522 834 99 ($3,694) 99 SB
gr
gs 187 39 2631 833 CB
2709 834 99 ($3,001) 99 SB
gr
gs 188 39 2818 833 CB
2897 834 99 ($2,377) 99 SB
gr
gs 187 39 3006 833 CB
3084 834 99 ($2,181) 99 SB
gr
gs 894 39 52 876 CB
63 877 648 (Investments in property, plant, and equipment) 648 SB
gr
gs 187 39 946 876 CB
1051 877 72 ($529) 72 SB
gr
gs 187 39 1133 876 CB
1238 877 72 ($710) 72 SB
gr
gs 187 39 1320 876 CB
1425 877 72 ($738) 72 SB
gr
gs 188 39 1507 876 CB
1586 877 99 ($1,028) 99 SB
gr
gs 187 39 1695 876 CB
1773 877 99 ($1,223) 99 SB
gr
gs 187 39 1882 876 CB
1960 877 99 ($1,518) 99 SB
gr
gs 188 39 2069 876 CB
2175 877 72 ($748) 72 SB
gr
gs 187 39 2257 876 CB
2362 877 72 ($564) 72 SB
gr
gs 187 39 2444 876 CB
2549 877 72 ($572) 72 SB
gr
gs 187 39 2631 876 CB
2736 877 72 ($452) 72 SB
gr
gs 188 39 2818 876 CB
2924 877 72 ($419) 72 SB
gr
gs 187 39 3006 876 CB
3111 877 72 ($511) 72 SB
gr
gs 894 39 52 919 CB
63 920 179 (Depreciation) 179 SB
gr
gs 187 39 946 919 CB
1051 920 72 ($699) 72 SB
gr
gs 187 39 1133 919 CB
1238 920 72 ($733) 72 SB
gr
gs 187 39 1320 919 CB
1425 920 72 ($772) 72 SB
gr
gs 188 39 1507 919 CB
1613 920 72 ($759) 72 SB
gr
gs 187 39 1695 919 CB
1800 920 72 ($659) 72 SB
gr
gs 187 39 1882 919 CB
1987 920 72 ($516) 72 SB
gr
gs 188 39 2069 919 CB
2175 920 72 ($435) 72 SB
gr
gs 187 39 2257 919 CB
2362 920 72 ($384) 72 SB
gr
gs 187 39 2444 919 CB
2549 920 72 ($315) 72 SB
gr
gs 187 39 2631 919 CB
2736 920 72 ($253) 72 SB
gr
gs 188 39 2818 919 CB
2924 920 72 ($203) 72 SB
gr
gs 187 39 3006 919 CB
3111 920 72 ($153) 72 SB
gr
gs 894 39 52 962 CB
63 963 716 (Total debt as a percentage of total debt plus equity) 716 SB
gr
gs 187 39 946 962 CB
1013 963 110 (17.50%) 110 SB
gr
gs 187 39 1133 962 CB
1218 963 92 (1.80%) 92 SB
gr
gs 187 39 1320 962 CB
1405 963 92 (2.20%) 92 SB
gr
gs 188 39 1507 962 CB
1593 963 92 (2.00%) 92 SB
gr
gs 187 39 1695 962 CB
1780 963 92 (2.00%) 92 SB
gr
gs 187 39 1882 962 CB
1967 963 92 (3.60%) 92 SB
gr
gs 188 39 2069 962 CB
2155 963 92 (4.20%) 92 SB
gr
gs 187 39 2257 962 CB
2342 963 92 (5.90%) 92 SB
gr
gs 187 39 2444 962 CB
2511 963 110 (15.70%) 110 SB
gr
gs 187 39 2631 962 CB
2698 963 110 (10.30%) 110 SB
gr
gs 188 39 2818 962 CB
2904 963 92 (3.00%) 92 SB
gr
gs 187 39 3006 962 CB
3091 963 92 (3.20%) 92 SB
gr
gs 894 39 52 1005 CB
63 1006 754 (Operating income \(loss\) as a percentage of revenues) 754 SB
gr
gs 187 39 946 1005 CB
1009 1006 114 (\(1.70%\)) 114 SB
gr
gs 187 39 1133 1005 CB
1178 1006 132 (\(15.30%\)) 132 SB
gr
gs 187 39 1320 1005 CB
1383 1006 114 (\(4.20%\)) 114 SB
gr
gs 188 39 1507 1005 CB
1593 1006 92 (0.10%) 92 SB
gr
gs 187 39 1695 1005 CB
1762 1006 110 (10.50%) 110 SB
gr
gs 187 39 1882 1005 CB
1949 1006 110 (14.20%) 110 SB
gr
gs 188 39 2069 1005 CB
2137 1006 110 (17.20%) 110 SB
gr
gs 187 39 2257 1005 CB
2324 1006 110 (10.90%) 110 SB
gr
gs 187 39 2444 1005 CB
2529 1006 92 (6.70%) 92 SB
gr
gs 187 39 2631 1005 CB
2716 1006 92 (7.10%) 92 SB
gr
gs 188 39 2818 1005 CB
2904 1006 92 (8.50%) 92 SB
gr
gs 187 39 3006 1005 CB
3073 1006 110 (15.10%) 110 SB
gr
gs 894 39 52 1048 CB
63 1049 700 (Income before taxes as a percentage of revenues) 700 SB
gr
gs 187 39 946 1048 CB
1009 1049 114 (\(1.60%\)) 114 SB
gr
gs 187 39 1133 1048 CB
1178 1049 132 (\(14.90%\)) 132 SB
gr
gs 187 39 1320 1048 CB
1383 1049 114 (\(3.70%\)) 114 SB
gr
gs 188 39 1507 1048 CB
1593 1049 92 (1.00%) 92 SB
gr
gs 187 39 1695 1048 CB
1762 1049 110 (11.20%) 110 SB
gr
gs 187 39 1882 1048 CB
1949 1049 110 (15.20%) 110 SB
gr
gs 188 39 2069 1048 CB
2137 1049 110 (18.00%) 110 SB
gr
gs 187 39 2257 1048 CB
2324 1049 110 (11.30%) 110 SB
gr
gs 187 39 2444 1048 CB
2529 1049 92 (6.40%) 92 SB
gr
gs 187 39 2631 1048 CB
2716 1049 92 (7.20%) 92 SB
gr
gs 188 39 2818 1048 CB
2904 1049 92 (9.60%) 92 SB
gr
gs 187 39 3006 1048 CB
3073 1049 110 (17.30%) 110 SB
gr
gs 894 39 52 1091 CB
63 1092 237 (Effective tax rate) 237 SB
gr
gs 187 39 946 1091 CB
1013 1092 110 (12.00%) 110 SB
gr
gs 187 39 1133 1091 CB
1200 1092 110 (11.20%) 110 SB
gr
gs 187 39 1320 1091 CB
1387 1092 110 (18.80%) 110 SB
gr
gs 188 39 1507 1091 CB
1575 1092 110 (40.00%) 110 SB
gr
gs 187 39 1695 1091 CB
1762 1092 110 (24.50%) 110 SB
gr
gs 187 39 1882 1091 CB
1949 1092 110 (25.00%) 110 SB
gr
gs 188 39 2069 1091 CB
2137 1092 110 (32.70%) 110 SB
gr
gs 187 39 2257 1091 CB
2324 1092 110 (28.00%) 110 SB
gr
gs 187 39 2444 1091 CB
2507 1092 114 (\(3.70%\)) 114 SB
gr
gs 187 39 2631 1091 CB
2698 1092 110 (18.00%) 110 SB
gr
gs 188 39 2818 1091 CB
2886 1092 110 (31.00%) 110 SB
gr
gs 187 39 3006 1091 CB
3073 1092 110 (38.00%) 110 SB
gr
gs 894 39 52 1134 CB
63 1135 663 (Net income \(loss\) as a percentage of revenues) 663 SB
gr
gs 187 39 946 1134 CB
1009 1135 114 (\(1.70%\)) 114 SB
gr
gs 187 39 1133 1134 CB
1178 1135 132 (\(20.10%\)) 132 SB
gr
gs 187 39 1320 1134 CB
1383 1135 114 (\(4.40%\)) 114 SB
gr
gs 188 39 1507 1134 CB
1593 1135 92 (0.60%) 92 SB
gr
gs 187 39 1695 1134 CB
1780 1135 92 (8.40%) 92 SB
gr
gs 187 39 1882 1134 CB
1949 1135 110 (11.40%) 110 SB
gr
gs 188 39 2069 1134 CB
2137 1135 110 (12.10%) 110 SB
gr
gs 187 39 2257 1134 CB
2342 1135 92 (8.10%) 92 SB
gr
gs 187 39 2444 1134 CB
2529 1135 92 (6.70%) 92 SB
gr
gs 187 39 2631 1134 CB
2716 1135 92 (5.90%) 92 SB
gr
gs 188 39 2818 1134 CB
2904 1135 92 (6.60%) 92 SB
gr
gs 187 39 3006 1134 CB
3073 1135 110 (10.70%) 110 SB
gr
gs 894 39 52 1177 CB
63 1178 821 (Net income \(loss\) as a percntg of avg stockholders' equity) 821 SB
gr
gs 187 39 946 1177 CB
1009 1178 114 (\(5.10%\)) 114 SB
gr
gs 187 39 1133 1177 CB
1178 1178 132 (\(44.50%\)) 132 SB
gr
gs 187 39 1320 1177 CB
1383 1178 114 (\(7.80%\)) 114 SB
gr
gs 188 39 1507 1177 CB
1593 1178 92 (0.90%) 92 SB
gr
gs 187 39 1695 1177 CB
1762 1178 110 (13.80%) 110 SB
gr
gs 187 39 1882 1177 CB
1949 1178 110 (18.90%) 110 SB
gr
gs 188 39 2069 1177 CB
2137 1178 110 (18.90%) 110 SB
gr
gs 187 39 2257 1177 CB
2324 1178 110 (12.00%) 110 SB
gr
gs 187 39 2444 1177 CB
2511 1178 110 (10.50%) 110 SB
gr
gs 187 39 2631 1177 CB
2716 1178 92 (8.70%) 92 SB
gr
gs 188 39 2818 1177 CB
2904 1178 92 (8.50%) 92 SB
gr
gs 187 39 3006 1177 CB
3073 1178 110 (14.30%) 110 SB
gr
gs 894 39 52 1220 CB
63 1221 816 (Net income \(loss\) as a percentage of average total assets) 816 SB
gr
gs 187 39 946 1220 CB
1009 1221 114 (\(2.30%\)) 114 SB
gr
gs 187 39 1133 1220 CB
1178 1221 132 (\(24.10%\)) 132 SB
gr
gs 187 39 1320 1220 CB
1383 1221 114 (\(5.20%\)) 114 SB
gr
gs 188 39 1507 1220 CB
1593 1221 92 (0.70%) 92 SB
gr
gs 187 39 1695 1220 CB
1762 1221 110 (10.30%) 110 SB
gr
gs 187 39 1882 1220 CB
1949 1221 110 (14.10%) 110 SB
gr
gs 188 39 2069 1220 CB
2137 1221 110 (14.60%) 110 SB
gr
gs 187 39 2257 1220 CB
2342 1221 92 (9.10%) 92 SB
gr
gs 187 39 2444 1220 CB
2529 1221 92 (7.50%) 92 SB
gr
gs 187 39 2631 1220 CB
2716 1221 92 (6.50%) 92 SB
gr
gs 188 39 2818 1220 CB
2904 1221 92 (6.60%) 92 SB
gr
gs 187 39 3006 1220 CB
3073 1221 110 (11.20%) 110 SB
gr
gs 894 39 52 1263 CB
63 1264 657 (Number days accounts receivable outstanding) 657 SB
gr
gs 187 39 946 1263 CB
1087 1264 36 (69) 36 SB
gr
gs 187 39 1133 1263 CB
1274 1264 36 (83) 36 SB
gr
gs 187 39 1320 1263 CB
1461 1264 36 (76) 36 SB
gr
gs 188 39 1507 1263 CB
1649 1264 36 (86) 36 SB
gr
gs 187 39 1695 1263 CB
1836 1264 36 (76) 36 SB
gr
gs 187 39 1882 1263 CB
2023 1264 36 (75) 36 SB
gr
gs 188 39 2069 1263 CB
2211 1264 36 (78) 36 SB
gr
gs 187 39 2257 1263 CB
2398 1264 36 (79) 36 SB
gr
gs 187 39 2444 1263 CB
2585 1264 36 (75) 36 SB
gr
gs 187 39 2631 1263 CB
2772 1264 36 (83) 36 SB
gr
gs 188 39 2818 1263 CB
2960 1264 36 (82) 36 SB
gr
gs 187 39 3006 1263 CB
3147 1264 36 (73) 36 SB
gr
gs 894 39 52 1306 CB
63 1307 211 (Inventory turns) 211 SB
gr
gs 187 39 946 1306 CB
1078 1307 45 (5.1) 45 SB
gr
gs 187 39 1133 1306 CB
1265 1307 45 (5.1) 45 SB
gr
gs 187 39 1320 1306 CB
1452 1307 45 (4.6) 45 SB
gr
gs 188 39 1507 1306 CB
1640 1307 45 (4.3) 45 SB
gr
gs 187 39 1695 1306 CB
1827 1307 45 (3.9) 45 SB
gr
gs 187 39 1882 1306 CB
2014 1307 45 (3.6) 45 SB
gr
gs 188 39 2069 1306 CB
2202 1307 45 (3.4) 45 SB
gr
gs 187 39 2257 1306 CB
2389 1307 45 (2.9) 45 SB
gr
gs 187 39 2444 1306 CB
2576 1307 45 (2.3) 45 SB
gr
gs 187 39 2631 1306 CB
2763 1307 45 (2.1) 45 SB
gr
gs 188 39 2818 1306 CB
2951 1307 45 (2.1) 45 SB
gr
gs 187 39 3006 1306 CB
3138 1307 45 (2.0) 45 SB
gr
gs 894 39 52 1349 CB
63 1350 606 (Number of employees at year end - regular) 606 SB
gr
gs 187 39 946 1349 CB
1024 1350 99 (89,900) 99 SB
gr
gs 187 39 1133 1349 CB
1193 1350 117 (107,900) 117 SB
gr
gs 187 39 1320 1349 CB
1380 1350 117 (115,100) 117 SB
gr
gs 188 39 1507 1349 CB
1568 1350 117 (116,900) 117 SB
gr
gs 187 39 1695 1349 CB
1755 1350 117 (118,400) 117 SB
gr
gs 187 39 1882 1349 CB
1942 1350 117 (113,900) 117 SB
gr
gs 188 39 2069 1349 CB
2130 1350 117 (103,000) 117 SB
gr
gs 187 39 2257 1349 CB
2335 1350 99 (88,300) 99 SB
gr
gs 187 39 2444 1349 CB
2522 1350 99 (83,000) 99 SB
gr
gs 187 39 2631 1349 CB
2709 1350 99 (79,800) 99 SB
gr
gs 188 39 2818 1349 CB
2897 1350 99 (68,100) 99 SB
gr
gs 187 39 3006 1349 CB
3084 1350 99 (67,100) 99 SB
gr
gs 894 39 52 1392 CB
63 1393 579 (Number of employees at year end - other) 579 SB
gr
gs 187 39 946 1392 CB
1042 1393 81 (4,300) 81 SB
gr
gs 187 39 1133 1392 CB
1229 1393 81 (5,900) 81 SB
gr
gs 187 39 1320 1392 CB
1416 1393 81 (5,900) 81 SB
gr
gs 188 39 1507 1392 CB
1604 1393 81 (7,100) 81 SB
gr
gs 187 39 1695 1392 CB
1791 1393 81 (7,400) 81 SB
gr
gs 187 39 1882 1392 CB
1978 1393 81 (7,600) 81 SB
gr
gs 188 39 2069 1392 CB
2166 1393 81 (7,500) 81 SB
gr
gs 187 39 2257 1392 CB
2353 1393 81 (6,400) 81 SB
gr
gs 187 39 2444 1392 CB
2540 1393 81 (6,000) 81 SB
gr
gs 187 39 2631 1392 CB
2727 1393 81 (5,800) 81 SB
gr
gs 188 39 2818 1392 CB
2915 1393 81 (4,900) 81 SB
gr
gs 187 39 3006 1392 CB
3084 1393 99 (55,227) 99 SB
gr
gs 894 39 52 1435 CB
63 1436 354 (Stockholders at year-end) 354 SB
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1 #C
EJ RS
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