Conference 7.286::digital

    See HUMANE::DIGITAL_INVESTING 10.2025
    It can probably be reposted here if the author of 10.2025 wishes
    (and maybe even then it doesn't need permission).

    It is important that everyone read the note referenced in -.1  This
    article hits at the heart of digital's future success or lack of.
    
    Just some significant highlights of the article:
    
    	1.  The Alpha Chip is not being adopted as much as it should in
            the marketplace
    
    	2.  The new Hudson, MA chip plant is only running at 30% capacity.
    	    Digital needs to find a partner soon, since the Cirrus deal
            fell through.
    
    	3.  Intel and HP are co-producing a chip (P7) that will be a real
            threat to Alpha
    
    	4.  Digital is coming out with some software (FX!32) that will
            enable Intel based SW to run under ALPHA
    
    Bottom line is that if digital does not market the ALPHA technology to
    gain more acceptance, if the P7 does "beat out" ALPHA in the coming
    years, and if digital doesn't find a chip partner; digital is in deep
    trouble for any future beyond the year 2000.  On the other hand, if
    ALPHA does become an accepted "winner" and gain market share, things
    look bright for digital.
    

>>    See HUMANE::DIGITAL_INVESTING 10.2025
>>    It can probably be reposted here if the author of 10.2025 wishes
>>    (and maybe even then it doesn't need permission).

Or some enterprising person can extract it again from http://www.boston.com and
post it again.

						Brian

    Or wait for tomorrow's VNS.
    
    		Steve

    Back Up and Running: Though on the rebound from
    massive losses, company faces tough future

    By Jon Auerbach, 05/12/96 

Among recent sitings: New York, where the impeccably groomed chairman of
Digital Equipment Corp. shared a stage with Microsoft chief Bill Gates and MCI
chairman Bert Roberts to announce a vaunted business alliance; and at
Cambridge's ultrahip Cybersmith, where a mere video link to a sales pitch by
Palmer drew a media mob. 

For a company that just three years ago was teetering on the edge of a steep
cliff (at one point it was losing $125,000 every hour), Digital has once again
found its balance. 

But the recovery is far from complete. 

While Digital is making money again, it has underperformed the computer
industry as a whole over the last three years. Its sales growth has lagged key
rivals such as Hewlett-Packard Co., Sun Microsystems Inc. and IBM. Products
have been slow to catch on with new customers. And after an aggressive bid to
become a force in the personal computer industry, Digital retreated from the
home PC market and remains a bit player when it comes to business sales. 

All of this comes as Digital is paying less attention to the thousands of big
companies it onced called on directly. Analysts say a 1994 decision to turn
over a big chunk of its customers to third-party distributors has left some
questioning Digital's long-term commitment. 

``I hear everywhere, `Yeah, Digital has great technology, but I just can't
trust them,''' said John Logan, president of Aberdeen Group in Boston and a
veteran Digital watcher. 

To be sure, a company in the middle of a massive restructuring can be excused
for posting sluggish financial results. But the rest of the computer world
hasn't paused while Digital regroups, and the company faces the real danger of
losing more ground to fast competitors. 

Analysts warn that if Digital wants to regain a prominent spot in the business,
it must move quickly to boost sales, especially of its most powerful systems. 

Stamford-based Gartner Group, a leading research firm, has given Digital just a
60 percent chance of being a viable computer maker five years from now.
``That's not a hearty endorsement,'' said George Weiss, a Gartner vice
president who nonetheless believes Digital has come a long way under Palmer. 

The Maynard company, the state's second-largest private employer, has cut its
payroll in half, slashed costs, sold nonessential operations and tried to
define a clear mission. Under Palmer's leadership, Digital has charted five
consecutive quarters of profit - not extraordinary for a company in the heart
of a booming industry, but impressive considering it had racked up $4 billion
in losses just four years ago. 

Investor confidence has been restored, sending Digital's share price climbing.
(From a low of 18 in the summer of 1994, its stock has rallied to as much as 76
in February of this year; it closed Friday at 53.) 

Financial analysts are generally sanguine about Digital's short-term prospects.
For the fiscal year 1996, which ends June 30, analysts predict earnings of
about $3.23 per share, up from 15 cents a share in 1995, according to Zacks
Investment Research. Estimates for 1997 average $5.25 a share. 

After years of trying to compete across all product ranges and in many markets,
Digital has narrowed its focus to building the fastest machines for the most
power-hungry corporate customers. Be first with the speediest, so the argument
at Digital goes, and all the rivals will be playing catch up. 

Digital has pegged its future on a tiny piece of silicon the size of a postage
stamp. Called the Alpha, the chip, packed with 9.4 million transistors, is the
fastest processor on the market, and Digital believes it will become the
standard engine inside muscle-bound computers. 

If Alpha fails to catch on among large companies, however, it leaves Digital
``at the prom without a date,'' said John McCarthy, a top analyst at Forrester
Research Inc., of Cambridge.

For most people, a computer chip is an invisible bit of confusing technology
stuffed inside computers. But at Digital, the Alpha chip has come to symbolize
the company's momentum. It has given many employees something to be proud of
after years plagued by job insecurity and an institutional loss of confidence.
In most ways, no person at Digital has come to be as closely linked with the
Alpha as Robert Palmer. 

In 1985, Palmer, an engineer with years of experience in the chip industry, was
recruited into Digital's semiconductor unit by company founder Kenneth H.
Olsen. Then, most Digital computers ran on the VAX line of chips introduced in
1978. 

After a series of misstarts - including the scrapping of a new operating system
program that led to the exodus of about 40 engineers in 1988 - the company
decided to build a chip of its own, based on a design called RISC, for reduced
instructing set computing. 

Palmer was chosen to go before Olsen and the Digital executive committee to
peddle the Alpha plan in early 1988. ``Apparently I was persuasive that day,''
smirked Palmer in a recent interview. Design on the Alpha began in 1989. 

By the time Alpha rolled off the assembly line in 1992, most competitors had
RISC chips on the market. But being last gave Digital the luxury of learning
from their errors. 

With blazing speed and the ability to run advanced software, Alpha quickly
claimed technical superiority. Digital's bet: For companies needing to process
huge databases or analyze billions of bits of information, the Alpha solution
would catch like wildfire. 

It has not. 

Despite what Palmer - who took the top spot when Olsen was forced out in July
1992 - refers to as a new Alpha surge generated by the need for big computers
as the Internet grows, Digital has hardly broken into the big leagues, analysts
say. The company has ``one of the lowest unit shipments of any architecture
being promulgated by a major vendor,'' said Nathan Brookwood, a semiconductor
specialist with Dataquest Inc., a San Jose, Calif.-based market research firm.
``Alpha is the low man on the totem as far as building market share.'' 

Moreover, Alpha has yet to win adoption by other chipmakers, a Digital goal.
For at least a year, Digital has been searching for a partner to help bring its
new semiconductor plant in Hudson, called FAB-6, up to capacity. A preliminary
agreement with Cirrus Logic Inc. of Fremont, Calif., fell through. Currently
the plant is running at about 30 percent capacity, which analysts say is
costing Digital precious dollars and hampering their effort to recoup a $450
million investment. 

Palmer will only say that the search for a partner is continuing. 

Measuring market share in the high-end computer segment is complex and often
ambiguous. But because Alpha was designed to run most efficiently on what is
known as a 64-bit Unix operating system, analysts say the Unix market is the
best yardstick to measure the chip's success. 

In 1994, the most recent year for which complete information is available,
Alpha's Unix sales accounted for 2.8 percent of the market, or $825 million.
That compared with 16.2 percent for both Sun and H-P, 13 percent for
International Business Machines Corp. and 5.4 percent for Silicon Graphics
Inc., according to the International Data Corp. in Framingham. 

Analysts had expected Digital's Unix sales to increase significantly in 1995,
the first year in which the company's new line of high-powered computer servers
was widely available. But based on preliminary calculatios, sales climbed only
about $250 million, to $1.09 billion, according to IDC. ``We expected more,''
said Jay Bretzmann, director of systems research at IDC. 

Digital is also pumping out computers built around Intel Corp. chips. It struck
a high-profile deal in August to market Microsoft Corp.'s NT operating system
for networks, saying that offering customers a choice between Microsoft and
Digital software would make Alpha more appealing.  hinner on the Intel
computers, and analysts say these sales will not provide the steam to fuel the
continued Digital recovery. 

The slow adoption rate of the Alpha chip translates almost directly onto
Digital's balance sheet. Over the past four quarters, Digital's quarterly sales
growth averaged 4.5 percent, over the same periods in the previous year. That
pales in comparison with H-P's 25 percent, Sun Microsystems Inc.'s 18 percent
and even IBM's 9.5 percent. 

To be sure, many large companies found the Alpha was just what they were
looking for. Pratt &Whitney,for instance, turned to Alpha to handle the
graphics and numbers required to design jets. SmithKline Beecham tapped into
Alpha's power to analyze and store chemical information. General Electric,
Samsung and Mitsubishi found Alpha could handle the kind of hefty number
crunching capabilities they required. 

Analysts say Alpha demand may be picking up. ``They are coming in on more and
more short lists,'' said Weiss. 

Today, sales of Alpha chips and systems account for roughly 50 percent of
Digital's earnings, according to Vincent J. Mullarkey, the company's chief
financial officer. 

Total sales of Alpha systems have grown to $1.9 billion last year, out of
overall sales of $13.8 billion, according to estimates by IDC. (The rest of
Digital's sales come from the VAX line, Intel computers and software and
services.) 

Still, industry watchers believe Alpha - with its fatter profit margins -
remains the key to Digital's future. Simply put, they say, Digital needs to
dramatically expand sales, both to existing and new customers. And that
requires basic blocking and tackling: aggressive marketing, continued alliances
with high-profile companies and possibly price cuts. 

``This is the time when they should be blowing [Alpha] out the door,'' Logan
said. If not, he added, ``people are concerned that they'll never get out of
the fringe.'' 

Perhaps the most important threat looming over Digital's shoulder is a plan by
Intel and H-P to co-produce a chip to rival the Alpha. Known by the codenames
P7 and Merced, the RISC-based processor is scheduled to be released in 1998 or
1999. At an H-P meeting in California last week, there were rumors buzzing that
a test version would be out as early as this year. 

``Intel has every intention of blowing [the Alpha] away,'' said Weiss, at
Gartner Group. 

As the world's largest chipmaker, and a company recognized as brimming with
marketing savvy, Intel has as good a chance as any making the P7 a standard
among big companies, analysts said. Having H-P's proven technical excellence on
its side only increases the odds. 

When the P7 comes out, ``everything is up for grabs,'' said Gene Lee, an
analyst with IDC's California office. 

Palmer is adamant the P7 will pose no threat. He points out that about half of
Digital's sales are composed of Intel-based systems. 

By the time the P7 is released, Digital vows to be making an Alpha that is far
faster. ``We are going to have the fastest microprocessors forever,'' boasted
Ed Caldwell, the vice president who heads Digital's semiconductor unit. 

Moreover, Digital plans to roll out software this summer called FX!32 that
Caldwell said will allow Intel-based applications to run on the Alpha system.
Digital plans to give away the product, and some analysts believe it will help
win customers who like Alpha but are swayed by Intel's enormous software base. 

For customers that want the best and fastest in computing, Digital will sell
Alpha. For others, it can offer systems with the Intel/H-P processor, Palmer
said. ``It's good for our customers because Digital will continue to offer the
broadest range of performance on both Intel and Alpha architecture,'' he said. 

Others are less optimistic. 

One of the main problems, analysts said, is that Digital is having difficulty
winning new accounts. Logan, of Aberdeen Group, blames this partly on a 1994
Digital decision to cut the number of companies it sells to directly to 1,000
from around 10,000. The companies that were cut away were handed over to
third-party vendors, a move that Logan believes destroyed the customer loyalty
that Digital salespeople created. 

Digital denies there has been any drop in confidence. In fact, the company
says, the switch has made it more efficient and allowed it to focus on the
1,000 biggest accounts. Mullarkey said the direct sales system was costing
Digital ``significant money.'' By cutting down to the most important customers,
Digital has considerably reduced sales and support costs. Similarly, Mullarkey
cited recent customer satisfaction surveys that ``would certainly lead one to
conclude that the situation is not only good but improving.'' 

Even critical analysts say that Digital is in no danger of financial crisis.
Rather, they point out that if the Intel chip is a big success, it would be
difficult for Digital to continue its expansion in earnest. 

``Digital will have had to make some significant moves by 1998 in terms of
market share so that Alpha is a major established technology,'' said Weiss.
``If their strategy is not broadened, they are going to be facing a huge hurdle
around the year 2000.'' 

This story ran on page 73 of the Boston Globe on 05/12/96. 

    So is anyone of the Corporate wizards in Communications putting
    together a response on this or do I get to hear from my Business
    Partner, "Gee, interesting article in the Sunday Globe!"
    
    Didn't someone famous say somewhere, "Never say Never, and Never use
    Forever"  Ed-  Nothing is forever except Death and I suspect if the
    politicans have anything to do with it, Taxes.  You know it's kinda'
    catchy, Death and Taxes both of which are a continum if you assume that
    life goes on for those you leave behind after you are out of the canoe.
    
    The lights are on, is anyone home?
    
    Mav

    I heard a rumor that Digital is downsizing our direct channels customer
    base from 1000 to 100 accounts.
    
    Has anyone heard this same rumor.  If so, it will be an even greater
    blow to customer loyalty.
    

    Whilst the Boston Globe article is being digested with interest in the
    GMA and by us reading Notes and VNS, what interest is there in the rest
    of the US?
    
    If there's no access to the article or widespread interest in it by the
    Wall St. market makers and stock buyers - what's the impact?

    re .8  You're right: nothing in the Globe article is news to the
    market; probably the biggest impact is the eye opening for the
    large number of employees in the greater Boston area.  .02 K
    

>> Re:  .5
Everybody seems to be talking about Alpha and yet no one is talking
about Alpha. I read an article a while ago in a prominent daily
investment publication. It was a hot debate over the fastest micro-
processor on the market. The article cited pros and cons for both
the Pentium and the PowerPC - one of these is apparently the fastest
microprocessor on the market. There was *NO* mention of Alpha. 

                           Hello?

This seems to me to be a big problem - and not a new one. Alpha, like
many Digital products, is one of the best kept secrets in technology
today. What is Digital doing to mass market the Alpha chip and Alpha
systems?  Why don't I see TV ads all the time about Alpha? How is it
that people on the street have heard of Pentium, and even PowerPC, but
never Alpha? Is there no one in this whole company, starting at the
top, who can see that we need more visibility and marketing?  Digital
has always had vastly superior products that no one ever knew about
because Digital never marketed them. This is simply not a new problem.
The bad news is that it seems it also not being addressed.

It's very frustrating to see these fabulous products brought to you
by dedicated and incomparable employees fall into the abyss because
no one knows about them. There are so many great marketing companies
out there, it seems surprising that Digital couldn't learn from them
or even recruit from them, for that matter. To use the age old sports
analogy, Digital needs a goal scorer...

    Did'nt we a few months back with to a new marcketing company that was
    suppose to do get us in front of the masses??? I do see us in a lot of
    the trade, but these are for the more informed!! Obviously somone is
    not doing there job!!! And the fustration for me is that I have been
    at the customer site generating revenue for the company, I wonder how
    the company is spending the hard earned consulting dollars that we
    bring in???? 

    If the DS pricing committee sets Alpha prices of $1913 per chip
    (and that's before chipset cost and lots of expensive fast L2
    cache), it really makes marketing difficult, if not impossible
    in the NT space.  How would you like to try and market a hamburger
    stand that sells $40 hamburgers?
    
    Er, bad example, been used recently... how about a lemonade stand
    analogy?
    ;-)  K

  There's also the slight problem that someone seems to think we're
  going to someday make some money selling Intel products, so we must
  always be nice and obsequious and never say anything about Alpha that
  might cast a pall on our vastly profitable line of Intel products. ~/~

  (This is not to deny Kratz's point about pricing, or the point
  I've made over the years that lack of Byte/Word operations was
  a killer in any market other than the Ivory Tower of Computer
  Science Theoreticians.)

  *THE DAY* I see a real killer comparison ad *ON TV* showing
  an Alpha Rabbit streaking past an Intel Turtle, or an Alpha
  F16 streaking past an Intel DC-3, or an Alpha F-1 car streaking
  past an Intel Hyundai, is the day I believe that Digital might
  actually pull itself out of the mess its created by betting
  the corporation on Alpha and then forgetting to watch its
  hand of cards.
                                   Atlant

    Atlant,
    You do realize that the ABU saleforce gets compensated for selling
    Alphas, but not anything from the PCBU?  So for our very profitable
    server line, our first line of competition is not COMPAQ, not HP,
    but ourselves.  If this artifical barrier weren't present, the PCBU
    would probably make a consistent profit (50% of COMPAQ's latest profit
    came from servers that did just 25% of revenue, for example).  Quite
    frankly, if I were an ABU salesperson and I had a 1% chance of selling
    an Alpha and 99% chance of selling an Intel, I'd still bid the Alpha;
    there's at least a slight chance it'd put food on my family's table.
    Kratz
    

    Re: .10
    
>It's very frustrating to see these fabulous products brought to you
>by dedicated and incomparable employees fall into the abyss because
>no one knows about them. There are so many great marketing companies
>out there, it seems surprising that Digital couldn't learn from them
>or even recruit from them, for that matter. To use the age old sports
>analogy, Digital needs a goal scorer...
    
    Hey, we have a goal scorer.  It called "metrics" - BP sez make the
    numbers I assign to you.  If you don't, your successor will!
    
    Metrics is a greate way to measure lots of things.  However, it does
    not do a good job of measuring "vision".  This comapny at one time was
    run by a visionary person but he lost the touch.  Our current
    leadership team seems to have a vision based on Alpha but is this
    vision the only one that should drive Digital?
    
    Ultimately, I think that the Alpha vision will not be the success that
    everyone hoped that it would be.  Everytime I use my PC here at work
    and at home, I'm reminded about the difference between a niche and a
    broad market.
    
    What is it that HP, SUN, Intel, and other do they makes them grow while
    we poke along at a measly single digit grown rate.

    They have "constancy of purpose".
    
    Go look up the thoughts of the late J Edwards Deming on the subject.
    I'd say more but someone seems to have borrowed my book on the subject.
    
    regards
    john

    RE: last
    
    I'll tell you what HP, Sun and Intel do to grow their business at the
    rates they are.  They define a market, identify customers, understand
    and learn key applications they want to own, then they build technology
    to attack the market and they completely try and dominate that space. 
    They get all the wood behind the arrow tip, all the powder behind the
    bullets and go right to the heart of the market.  They design print ads
    that support their vision of where they want to be.  They design tv
    ad's which market their vision to the masses ("Intel inside) such that
    it becomes a panacea.  "Oh boy, I better take my dose of P6 today or
    I'll get sick in corporate land"  and everyone from the CEO to the
    person screwing it together understands and sings the corporate mantra
    of "We are the __________ Company and we do it better than anyone else
    in the universe."
    
    Now, along comes the Digital company.  And we have hot products.  We've
    got hot alliances.  We've got hot professionals.  We have a hot ad
    agency (DDB Needham).  We've got hot executives that drive hot cars. 
    Hey lo and behold we're a hot company.  Pause.....YAWN...... who cares?
    
    Everyone has hot products, alliances, pro's, exec's, and even cars. 
    The point is we do not have market share.  Once again folks, Market
    Share.  MARKET SHARE!  If you have it you will own the customer's
    mindset.  ("Intel Inside... Sun, we are the Network....IBM...solutions
    for a small planet....HP....well everyone just knows who they are).
     
    And then there's Alpha.  Hmmmm what is this Alpha thing?  Is it fancy
    military lingo for the first letter of the alphabet?  Is it a cereal as in
    Alpha bits?  Is it medicine?  Is it a car (Alpha Romeo)?  Just pray
    tell what is this thing that they call Alpha.  How can it help me with
    my work?  Where can I get some?  Who can I talk to?  How does it work? 
    What does it do?  and on and on and on.
    
    Market share people.  It is Marketing 101.  It's Marketing 100.  It's
    the Basics.  So, it's not about running hot dog stands.  It's not about
    metrics.  It's about capturing the lions share of a market.  Catering
    to the customers needs, under promising and over delivering, and on and
    on and on.  You won't need metrics.  You will only need Brinks trucks
    to haul the money away.  Lot's of em.  HP needs enough to handle $32
    billion.  IBM needs $70 billion.  Digital needs.....oh just put it in
    one of the other's there it's less than a truck load.
    
    Mav 

    I agree with the general comments about our almost criminal lack of
    advertising and marketing around Alpha and Digital.  We ahve a
    tremendous product that is languishing because of a lack of
    advertising.  We have distribution network that is focused on selling
    high margin servers that do nothing to get volume Alphas in the market. 
    we can win the Intel/Alpha wars, but not going about it in the current
    fashion. 
    
    I wonder why the press is not making much of a story about
    the HP/Intel P7 chip.  This is a chip that is going to be available to
    all Intel OEMs, including Digital.  If the P7 is a screamer and
    outperforms the Alpha, we can resell this chip as easily as HP.  What
    will HP offer to their customers to keep them buying HPs?  Compaq can
    sell the P7 and has a much better record in the Intel space than HP. 
    It seems as if HP has created a double-edged sword.  It has partnered
    with Intel to produce a new chip, that may or may not run all HP
    software transparently, but this will not be an exclusive agreement. 
    Why would anyone want to buy from HP when they can buy from anyone to
    get the P7 chip.  It would seem that HP has a very slippery strategy
    with the P7.  Also, it would seem to endanger any PA RISC sales as this
    is now an obsolete line of processors.
    

    Marketing problems?  (shock/horrors)
    
    Hayes is getting a big ride out of their Winston Cup stock car.
           
    MadMike

    
    As I am the one to sign the "stealth Marketing song" in many
    cases, I urge you all to get a copy of Webmaster publication
    and see the ad about Webservers and Alpha, you will have a NEW
    opinion of our Marketing.  It is one of the best ads I have
    seen in my life at Digital.
    
    

    the bottom line purpose of an ad is to get NAME RECOGNITION....it's to
    make someone in the market for a computer product say"Why not try
    Digital?"
    
    to date, our marketing has been woeful lacking in getting that message
    acrosss 

P7?  Which P7?  Currently, the P7 has evolved into two seperate devlopment
teams as the Intel/HP alliance has fragmented.  The HP developed version of
P7 may -or- maynot run x86 code.  Current estimates for some version of P7 
are now out to 1998.  Most people in the PC world believe P7 is still only
a dream.

I would be more concerned if Intel could bring out a 300-400mhz P6 in the
near future.


							-Paul

        Right now Digital, as a place to work, from the perspective
        of an employee, feels like a company in dire financial
        condition.

        There are layoffs (and rumors of layoffs) of some of the best
        people working in what have been proclaimed as some of the
        most strategic markets for Digital (internet and intranet,
        from where I sit).

        I've been with Digital a long time, and I remember the mood
        of three years ago, when I was listed "at risk" and nearly
        tapped -- it seems worse now.  Back then, when we were
        bloated and bleeding red ink, it made sense that the most
        important thing the company had to do was cut costs and cut
        headcount -- even at the expense of supposedly important
        work.

        But why now, especially when the "Digital Today" headline
        boasts "Q3 revenue highest ever, net profit best in 6 years"?

        (I can certainly understand, and support, the continued need
        to control and reduce costs -- but why is it happening at
        this pace and with such priority?)

        Is there something happening that we workers just don't know
        about?  (This mood of a company in dire straits is certainly
        reinforced by the building closing and office "densification"
        going on all around.)

        It's getting really hard to do real work for real customers.

        Bob

    re: Note 4590.20 by VFOVAX::BRAMBLETT
    
    You and I use Internet, but many people we want to be reaching
    (the big cheese who controls the spending) probably still has a
    VT100 on his desk.  Maybe not, but you know what I'm trying to say.
    
    I think we need to be in the mainstream, reaching managers and
    decision makers who are "too busy to surf" internet.  Our internet
    ads may be fabulous, but we need to target the people with the cash.
    
    MadMike

    Re: .20
    
    Hmmmm, well it shows that at least one group has a sense of purpose in
    this company.  Now what BP needs to do is hire more Ilene Langs to turn
    this company around.  I get the feeling that she is out to dominate the
    internet market.  The idea of leveraging the Altavista name was a good
    idea.
    
    
    Re; .22
    
    Regarding the P7.  Is the P7 effort really important for HP to succeed? 
    Right now they are eating our lunch without one.  The trick is that
    they are more diversified than we are and those other divisions don't
    sell "technical workstations".  They sell "solutions".
    
    Clearly, for Intel, the P7 is important but they will keep on producing
    faster chips.  After all, they do have more chip designers and fabs
    than we do.
    
    So we have chosen a winning strategy we got rid of all our application
    software groups (health care, manufacturing, on and on) and instead we
    are concentrating on high end processors.  So, we can't compete with HP
    and I don't see us taking on Intel because we don't have the size.
    
    Am I missing someting?

    RE: .22 and .25
    
    While we understand (or think we do) the reasons why P7 will/will not
    deliver as promised, the fact is that people are talking about it
    in the press.  Do we need to revisit Beta vs VHS?  Technical 
    superiority without discussion or widespread availability won't cut it.
    VHS served a purpose and was easier to get/use than Beta.  Thats
    why it won.  Only dweebs like me still have Beta machines :-)
    [I would guess that the percentage of engineers who own Beta machines
    ia MUCH greater than non-engineers.]
    
    				-John

    re .19 
    
    Not only Hayes Modems, but Prodigy, too.
    
    I read all these "You have to read *THIS* ad" comments, and pardon me
    <Yawn>
    I don't want to READ it, I want to see it on TV, worldwide every day.
    I want to see a Winston Cup TEAM with a big old ALPHA logo on the hood,
    I want customers to say "Hey! Cool commercial the other night",
    I want Stealth Marketing to GO AWAY (TFSO anyone?)
    
    I know we have cool<er> products and lots of other do too, but we need
    more - WE NEED VISIBILITY AND WE NEED IT NOW!
    
    and to think that this has been going on for decades now. 
    
    .mike.
    

    Re. .16
    
    >    They have "constancy of purpose.
    >    Go look up the thoughts of the late J Edwards Deming on the subject.
    >    I'd say more but someone seems to have borrowed my book on the subject.
    
      Obviously not someone of any importance within Digital! 8*)
    
    Ken

>   <<< Note 4590.26 by TLE::REAGAN "All of this chaos makes perfect sense" >>>
>
>    Do we need to revisit Beta vs VHS?  Technical 
>    superiority without discussion or widespread availability won't cut it.
>    VHS served a purpose and was easier to get/use than Beta.  Thats
>    why it won.  

VHS beat Beta because standard VHS tapes were 120 minutes long, long enough
for most movies, and standard Beta tapes were only 75 minutes, NOT long
enough for most movies.  Movie rentals made the early home video market,
ergo VHS rules.

>    Only dweebs like me still have Beta machines :-)
>    [I would guess that the percentage of engineers who own Beta machines
>    ia MUCH greater than non-engineers.]

(Why, do we have shorter attention spans?)

- tom]

    Digital has had some good Ads over the years, but one thing
    they seriously lack is frequency.  Having a good campaign that
    only shows a couple times and goes away doesn't cut it.  Its almost
    better to have a simpler, cheaper campaign and put the dollars into
    more air time.  How many days go by that you don't hear an ad for
    McDonalds?  You have to keep bombarding the crowd to make your ads 
    start to pay off or your basically throwing your money away. 
    
    RS

    RE: frequency
    
    i'd add "consistency" to that list.

More on HP in the press recently:

HEWLETT-PACKARD

 HP CONTINUES TO EXPAND INTO NEW MARKETS
 CMP Publications via FIRST! by Individual, Inc., April 23, 1996

 * In this decade of downsizing, rightsizing, and mega-mergers, HP is
   emerging as an industry powerhouse. The company is recognized as:
   -- The world leader in printers
   -- The top revenue generator in UNIX workstations and servers
   -- The leading tape storage products supplier in the U.S.
   -- A growing PC giant
 * Last year, HP moved from ninth to seventh place on the list of leading
   worldwide PC manufacturers.
 * HP has demonstrated its ability to adapt, respond, and grow like a small
   Fortune 1000 company, even though it is actually a $31 billion giant.
   "What we have learned to do is to fly the divisions in formation without
   destroying their fundamental independence." (Brice Clark, Director of
   Strategic Planning, HP's Networks Division, Roseville, CA)
 * A look ahead to HP's future prompts the following questions:
   -- Will collaboration with Intel produce the world's most powerful and
      most popular generation of microprocessors?
   -- Can HP hold its own against IBM, a company that sells twice that of
      HP every year?
   -- Will its slow entrance into the Internet market force HP to play
 * Once defined by calculators and printers, HP is aggressively expanding
  its product focus to include a wide array and computer products, medical
   instruments, and innovations for new markets, culled from core research.
 * Innovative, new products introduced since 1993 were responsible for more
   than half of the company's orders for 1995.
 * HP's 1995 milestones include:
   -- A 27-percent increase in component product orders
   -- Introduction of a new PA RISC processor
 * Although it engages in ambitious partnerships, HP has managed to avoid
   any problematic initiatives. In fact, the company has never faced an
   economic crisis resulting in massive layoffs.
 * Dick Watts, Vice President and General Manger, HP's Computer Systems
   Organization: "Safe not only means secure in the sense of a reliable
   vendor that is financially sound and able to stand behind the product
   and support it. It also means addressing some of the future questions
   that our customers have."
 * A good example of HP's pragmatism is its collaboration with Intel.
   -- A solo attempt to develop a competitive, next-generation
      PA-RISC chip would have cost the company about $2 billion.
   -- With Intel on-board, HP may net better price/performance that RISC
      and compatibility with the world's most popular chip architecture.
 * Accounting for 80 percent of the company's 1995 revenue, HP's Computer
   Organization is comprised of five distinct entities:
   -- Customer support
   -- LaserJet printers
   -- InkJet printers
   -- UNIX systems
   -- Intel-based computers
 * Each entity is headed by a group vice president, who, in turn, reports
   directly to Executive Vice President Rick Belluzzo, Computer
   Organization General Manager.
 * HP hopes to more closely align its various computer properties. However,
   the UNIX and Intel computer groups will remain separate entities and
   pursue independent channel agendas.

 HEWLETT-PACKARD REORGANIZES FORCE; SEEKS NT MARKET
 Reuters via First! by Individual, Inc., May 6, 1996

 * Two major announcements at Hewlett-Packard
   -- The direct sales force will now sell personal computers and laptops,
      in addition to workstations.
   -- Changes are being implemented to improve sales and service to
      customers in commercial and technical markets.
 * Industry analysts are saying that these changes position HP as the one
  company selling in both the UNIX workstation market and the Windows
   NT-based personal computer market.

   (HP is leveraging their successful HP/UX direct sales force into the NT mark
et
    now that the NT iron is hot.  This moves signals they are now ready to
    sacrifice HP/UX to NT if necessary and capture these HP/UX customers on NT
    before any competitor can move in.)

 * Herwick Capital Management take:
   -- "There is nothing hotter today ... than people wanting to implement
      NT servers and clients. HP very strongly seized on that opportunity."
   -- HP is in a "unique or leadership position in terms of having a very
      strong UNIX offering as well as putting strong support behind NT."
 * HP's direct sales force, previously responsible for selling higher-end
   workstation, middleware, and server products, will continue to work
   closely with resellers, critical players on the HP sales team.

 HP TO STOP USE OF MAINFRAME COMPUTERS
 Kyodo via First! by Individual, Inc., April 25, 1996

 * HP will discontinue the use of mainframe computers at its facilities in
   California during the third week in May.
 * Information management will be taken over by an in-house communications
   network of server and personal computers.

    So, what happened to them today??
    
    HP stock is down 9 1/4 to 104 1/2.
    
    	Steve

>>    So, what happened to them today??


  They are annoucning earnings today, although I haven't heard what they are...


  Bob

The Globe article really echos what I've heard from colleagues
looking to buy development and reselling workstations and servers.

In a nutshell, most think Digital is out of the game.  They want
to buy Sun/SGI/HP.  They think Digital may go under at any time.
I convince them that we are fast, try one.  They try a Digital 
workstation.  So far, I've seen two results.  1) They decide to
buy Sun anyway (site quality of service, etc...).  2) They compare
to P6, P6 wins price/performance ratio with a 4/1 margin.  End
result: these guys/gals try to convince me my job is at risk at Digital!

This happened with 4 places now and a 5th doing evalutations.  None
are very large accounts now, 1 could turn out to be large. 2 are
startups, 3 are large companies.  Some get a machine to compile on.

Who is our target for the Alpha?  People who need it fast at any cost?
Who are these people?

In my limited experience, the poor folks who didn't buy Alpha's, but
bought Sun/HP/SGI instead did so because they thought of Sun/HP/SGI
as better.  So my guess is that we lack mindshare in that segment.

    re: P6 4:1 price/performance advantage over Alpha
    
    Things *are* getting better for Alpha... when it ships, an EV56-based
    Alpha XL 366 at <$10k should open quite a few eyebrows and stop the
    embarrassing situations we currently send our sales force/resellers
    into with the older Alpha products.  Alas, you can only embarrass
    these folks so often before they give up.

    re .35

>In my limited experience, the poor folks who didn't buy Alpha's, but
>bought Sun/HP/SGI instead did so because they thought of Sun/HP/SGI
>as better.  So my guess is that we lack mindshare in that segment.

    And what does better mean? I've seen HP put one or more technical 
    specialists at the customer site every day to work on their performance
    problems. Sun dropships hardware in the customer's data center and has
    their people on-site to replicate the customer's environment. Try doing 
    that with an SBU account. 

    Right now it's chicken and egg. The customers in the large opportunities 
    I work on want references. No references, no sale, no sale, no
    references.

    Lisa

>                      <<< Note 4590.36 by PCBUOA::KRATZ >>>
>
>    re: P6 4:1 price/performance advantage over Alpha
>    
>    Things *are* getting better for Alpha... when it ships, an EV56-based
>    Alpha XL 366 at <$10k should open quite a few eyebrows and stop the
>    embarrassing situations we currently send our sales force/resellers
>    into with the older Alpha products.  Alas, you can only embarrass
>    these folks so often before they give up.


Is this a first? Kratz actually said something positive about a 
non-Intel/MicroSoft product!!!

    
    Actually, I don't believe that any customer buys strictly on price
    performance when deciding on what computer to buy.  Customers buy
    business solutions from Consulting firms which understand their
    business problems and how to solve them.  The flavor of the box
    under the solution is much less important than the problem which
    is being solved.
    
    

    Heed me.....read me.......the BOX does not matter.  It never did.  The
    solution matters.  If you have *THE* solution on a *FAST CHEAP* box and
    can SUPPORT the customer with outstanding SERVICE after the sale then
    you will win.  If you do it once, jolly good for you.  10 times great. 
    100 times even better. 10,000 times now you are talking.  A 100,000
    times boy the trains on a roll now, and a 1,000,000 times, well guess
    who owns Everest folks.  Market share King.  
    
    It's a simple, simple thing folks........sell 'em and keep 'em happy.
    
    Mav 

>    Heed me.....read me.......the BOX does not matter.  It never did.  The
>    solution matters.  If you have *THE* solution on a *FAST CHEAP* box and
>    can SUPPORT the customer with outstanding SERVICE after the sale then

In the research and development computing or startup arena, 
the solution is sometimes (often?) UNIX + GNU tools.  Or NT.  Now 
it comes down to who has the best bang for the buck.  So the PC 
wins until the machine Kratz mentioned hits the streets.  I hope it 
comes out soon!

As for the rest of your argument, it deals with arenas that I'm
unfamiliar with, but it seems very reasonable.  Of course, if they
never call Digital, they'll never know what our solution is.  When
we call them, do we have the service & solution they are looking 
for?


My guess is that the box+OS is a commodity item.  Where can we add value?

Raw speed. Or price/performance.  Or the OS.  Or service & 
solution (or is that a seperate item?).  Probably more.

    Boxes may not matter, but the perception of the boxes w.r.t. the
    solution DOES matter.
    
    I have been fighting an uphill battle for YEARS at my current customer.
    He is doing true 3D imaging and 3D image manipulation.  His peers in
    his research keep telling him "You should be using SGI!  Alphas may be
    fast, but they don't have the leading applications that everyone in
    this field uses!  SGI _IS_ the graphical research platform!".
    
    I have managed to keep the Alphas and VAXen intact so far, but I go
    through this drill every quarter or so.  Digital simply doesn't have
    the reputation in this field that SGI does.  We've managed to make sure
    that the Alphas are doing everything that has been needed so far, but
    the perception of SGI as a superior graphics/imaging/research platform
    simply won't go away.
    
    Also, when I try to pin the customer down on the benefits of SGI versus
    Digital, it inevitably boils down to "SGI is a serious player in this
    field, while Digital is nothing but hotboxes and empty talk".
    
    We've got to learn how to play this game!  We should be putting serious
    effort in creating the perception that Digital is _THE_ research
    platform for the year 2000 and beyond.  If just ONE major new
    technology is born on and requires the "hotbox" capability of the
    Alpha, we could see this company soar far above the levels of the "old"
    Digital.
    
    Instead, we are seen as offering mere hotbox toolkits: a box with an O/S,
    networking, and compilers, but NOTHING that really addresses the
    direct needs of the customer.  The fact that we seem destined to sell
    off just about every other piece of software we make is NOT HELPING OUR
    PERCEPTION.  We are selling the same hotbox toolkits that everyone else
    sells; if we want to win market share, we've GOT to sell something
    other than the "we're hotter than the other guys" line.
    
    -- Russ

    
    Talk to the folks that have the VAN with ALL competetive systems
    and ALPHAS for benchmarking.....whenever there is a problem with
    customers perception of our equipment against others, they drive this
    VAN up, and give the customer a tour and they see for themselves......
    
    I was impressed...  Only problem was they needed to keep the chrome
    wheels of the tractor-trailer shinier!!! ;^)  Upset's us Harley Chrome
    freaks!
    
    chet

I'd say we haven't convinced enough companies to port their 
software to the Alpha architecture.  This has got to make it
harder to sell Alpha boxes.

    Re .42
    
    Interestingly enough, the name SGI sez what that company does best:
    graphics!
    
    Now, we may say that we have a blzingly fast machine but BIG DEAL! 
    What SGI has done is lead the graphics industry.  We pushed PHIGS
    (pigs) and SGI blew us away with GL, and then OpenGL, which is part of
    Windows NT (is it included in W95?).
    
    On top of that, they have some really fancy 3d visualization and
    modeling software: Open Inventor comes to mind here.
    
    So we tout our hot boxes but fail to see that SGI has it all WRT high
    end graphics.
    
    

    So, what about our new $10,000 graphics card?  How does that compare to
    what SGI is peddling?
    
    Maybe we can paint AXP on the back of our stock car and dedicate the
    hood to touting how we blow away SGI with our graphics hardware.
    
    MadMike, not all that up on the new hardware kinda guy. 

AXP?  What's that?

	Steve

    er, alpha.  nevermind, we'll paint "digital" on the side instead.
    We make fast watches. that's the ticket.

    Digital Semiconductor showed a videotape at the Nat'l Assoc. of
    Broadcasters show in April that has several of the film and TV
    animation industry's hottest video engineers (Amblin Imaging, Digital
    Domain, etc.) saying how Alpha blows SGI out of the water in image
    rendering and animation using Windows NT, how they get equal or better 
    results from Alpha systems for a fraction of what comparable SGI systems 
    cost, and how they can work at home on Intel NT systems and bring the
    work to the office and finish it (fast) on Alpha, whereas SGI doesn't
    do NT, so it's work at the office or nothing.
    
    Alpha OEM Carrera Computers gets some exposure, but the key words are
    Alpha-Alpha-Alpha.
    
    For info call Pat Hart at DTN 225-4767.
    
    M 

    
    re: .49
    That's what I wanted to hear.  So, the word on the street is SGI
    is the hot ticket.  They even have the word "graphics" in their name.
    But the facts are, we (dec, er, digital) run circles around them.
    Another well known secret, or are we blowing our horn about this?
    
    I think my point is, we have a perception problem (horrors).  What is true
    and what people THINK are not the same.  We KNOW we have superior
    products/services, but we don't tell anyone.  OR, we tell the
    wrong people.  weenies KNOW we are superior.  People who surf
    internet know about things, but when push comes to shove, the
    boston globe writes us off.  This is why I'm thinking about needing
    to target a more mainstream audience.  I know a housewife isn't
    going to buy bazzilions of dollars of stuff from us, but her husband,
    the director at the local bank many watch TV with her, and might
    accidentally see one of our ads (or, gasp, might even see our
    stock car every weekend) and decide to give us a call.  We don't just
    make alpha, we make a whole line of superior items which make
    superior solutions for current and POTENTIAL customers.
    
    Someone should be responding to the Boston Globe.
    
    MadMike

>> I'd say we haven't convinced enough companies to port their
>> software to the Alpha architecture.  This has got to make it
>> harder to sell Alpha boxes.

Hello?  We're right back to marketing again. Not sales, Marketing.
Think back to the Pro series in the 80's. That Pro 380 was a rocket
ship on the desktop before it's time. Guess what Digital didn't do?
NO ONE was writing software for it. Sound familiar?  Gee, maybe, in
order not to repeat the very same mistake ten years later, we ought
to go out and encourage, court, prod other companies into writing 
Alpha stuff???  I can't understand how this gets missed - time after
time...

    In the case of the PRO there were THOUSDANDS of programs that could
    have run on it, but our clever marketing insited we restrict RT-11 and
    only allow the wonderfull POS to run.
    
    Nobody wrote code for POS.
    
    When you get into the 'what if' mode, just imagine if we had opend up
    the pdp11 chipset and PRO, with an installed base like that.

	RE .44

	What's "enough" The current Alpha Applications catalog lists 
1741 vendors, 7,384 applications. 2,934 on Digital UNIX, 2,973 on 
OpenVMS, and 1,475 on Windows/NT. Maybe their not the "right" 
applications or maybe we just don't know how to tell the world !

 The statistics are on the web page:

	http://www.unix.digital.com/catalog/stats/index.html

	\Bob Lail

    Just where is the current NT Alpha applications catalogue ? The only
    one I can find is dated July 95. Doesn't inspire confidence to start
    with. Then you call a couple of vendors listed and they say "yeah, we
    ported once, didn't sell any, we just do Intel now. But you're the
    third person this month to ask, so if Digital would encourage us, maybe
    we'd look again". So I could use an up to date version...
    
    regards
    john

    
    Re .33
    
    .33> So, what happened to them today??
    
    .33> HP stock is down 9 1/4 to 104 1/2
    
    
    	It's in the San Jose paper today,profits are  up 25% to 
        to 723 million from 577 million the same period last year.
    	I guess it wasn't good enough for wall street.
               

http://www.unix.digital.com/catalog/index.html

    Re: PRO
    
    In addition to the mistake of POS, the proprietary bus was stupid--
    it should of had a Q-bus.  A "personal" PDP with graphics and Q-bus
    could have cleaned up in the engineering market.
    
    And we should have sold the uVAX II chipset to anyone who wanted it...

> And we should have sold the uVAX II chipset to anyone who wanted it...
    
    Like Apple.
    

> > And we should have sold the uVAX II chipset to anyone who wanted it...
> 
> Like Apple.

  Just like we sold our RISC architecture to anyone who wanted it.

  Like Apple.

  NOT!

  Thus was born the PowerPC consortium.

                                   Atlant


P.S.: We can probably do this bone-headed trick at least one
      more time before we go out of business.

	RE .54

	Alpha Applications Catalog - World Wide Web (www) 

	http://www.unix.digital.com/catalog/index.html

	\Bob Lail

> Just like we sold our RISC architecture to anyone who wanted it.

    IMO if Palmer was running the company in 1990 Apple would be using 
    Alpha in Mac's.  Ken just didn't see the need to share.
    
    
> P.S.: We can probably do this bone-headed trick at least one
>      more time before we go out of business.
    
    Good thing we are willing to sell StrongARM to Apple.
    
-Bruce
    
    
    

Bruce:

> > P.S.: We can probably do this bone-headed trick at least one
> >      more time before we go out of business.
> 
> Good thing we are willing to sell StrongARM to Apple.

  I'm pretty open about bashing Digital's stupidity but I'm
  glad you put your reply in. StrongARM for the Newton PDA
  really does represent a departure for us; I hope it's
  the beginning of a new trend.

  Now if we can just "generalize" the idea to include
  widespread OEM sales for Alpha!

                                   Atlant

Bruce, Atlant -

I thought we *did* offer Alpha to Apple in ~1991, but they turned it down.
At the time, something based on the successful IBM RS6000 line would probably
have seemed like a much less risky bet than a new architecture from a company
that was clearly falling behind in the performance game.

  The way I heard the rumor, John Sculley came to Ken Olsen
  looking for a RISC architecture, and Ken basically wasn't
  interested in talking about it.

  But I have no hard facts to support this rumor and I wasn't
  a "fly on the wall" at any meeting. :-)

                                   Atlant

    I heard the same thing as Atlant.  I also heard that Apple approached
    us on MicroVAX but we were interested then either.  
    
    -Bruce  

Digital is listed in the Globe's top 100 MA companies today.  I don't
know where we place, but I heard it on WBNW.

    Digital is #52 on the 100 most profitable.
    
    It also gets mentioned on a 'most improved' or some such heading.

    Also got number 1 on highest sales.
    
    Debbie
    

    
     They *love* us, they *hate* us.
      They *hate* us, they *love* us.
    
       At least they *talk* about us!
    
    -Later.
     Mike Z.