Conference 7.286::digital

    Hey, why not start a rumour?
    
    Would it perhaps make sense for us to talk about a MERGER with HP?
    (Of course, this brings up all sorts of problems, not the least of
    which is redundant staff.)
    
    Sandy

    < Would it perhaps make sense for us to talk about a MERGER with HP?
    
    What a winning combination this would be.  If the SLT are plugged into
    this notesfile, I hope they take note.........(loose pun intended)
    
    -Dave.
    

    re: .1
    
    The 'redundant staff' problem exists whether we merge or not.  The
    industry we are in is able to support fewer and fewer employees each
    year, regardless of what company we work for.  I don't think HP would
    ever go for a merger with Digital -- they may like a couple pieces of
    our business, but they're currently quite profitable, and I suspect
    they wouldn't be interested in dealing with the extreme complications
    and expense of merging two huge enterprises.  Apollo worked out very
    well for them, but they were tiny in comparison (akin to buying one
    component of Digital, like Storage).  Just my 2 cents.
    
    	Steve

>    What would happen if we started selling ALPHA chips
>    to HP for use in their next generation of systems?  HP would
>    not have to spend a dime in developing its own 64bit technology.
    
    Today HP and Intel announced that they will together develope a 64bit
    risc processor.  
    
    -Bruce

    re .3
    
    >>The industry we are in is able to support fewer and fewer employees
    >>each year, regardless of what company we work for.
    
    Rubbish, every year for the past 30 years the number of people in the
    computer industry has grown. The problem is with fat old giants whose
    profit margins have collapsed and have had their traditional markets
    pulled out from under them. e.g. Digital, IBM, Wang...
    
    Joe. 

    re:. 6
    and have software that takes advantage of the 64 bit power when it's
    introduced...

    IMHO the real merger should be with XEROX.  We would be a $30B giant
    covering the entire enterprise for information needs.  We focus on
    input and throughput, they focus on interface and output.  They also
    have top notch training, consulting and sales.  
    
    ..Larry

re: .1
>    Would it perhaps make sense for us to talk about a MERGER with HP?
>    (Of course, this brings up all sorts of problems, not the least of
>    which is redundant staff.)

Yeah. Instead of one management chain, HP would then have four or five.
Whatever would they do with them?

    Forget a merger with HP. It would not be fiscally smart
    for HP today. Rather then a merge with Xerox why not GE? The alpha
    chip would provide GE with smarter appliances/equipment etc
    etc.
    
    			-Jim-

    Actually, what I think we should do is merge with Sony.  They already
    make video monitors, and CDROM drives.  They own a rather large movie
    library.  Seems likely that they would want to get into multimedia
    computing.
    
    And we can supply them with the Alpha:  the Betamax of CPU chips
    (Betamax:  technically superior format, but not sold correctly)

    
    	Give me a break. I do not want to merge with, be purchased by, etc.
    anyone. I would like to see Digital get organizationally streamlined to
    just three levels of management. This one act alone would probably get
    our stock back over $40/share. This would be most appreciated by all
    employees. This one, for example, would sleep easier knowing at least
    two kids can now go to college.
    
    	Maybe we should start a new note. "If you were CEO, how would you
    fix Digital?"
    
    		the Greyhawk
    

    >>"If you were CEO, how would you fix Digital?"    
    
    Aside from the management levels, I would get back to the customers... 
    kinda like the Airline commercial.
    
    I actually had this dream once...  I was CEO of Digital.  My first day
    I held a press conference followed by a DVN.  I announced to everyone
    that I was selling my home and would be travelling for the next 18
    months to focus on customers.
    
    For the Digital employees, I set up an -800 number service for
    scheduling me with customers or potential customers anywhere in the
    world.  As CEO, I believe having direct conversations with a customer
    interested but not sure of whether to buy Digital can turn the sale in
    our favor.  This can be a very heddy experience for many customers and
    certainly shows direct committment from the top.
    
    I would hire two people from the previous Presidential Advance Team to
    make sure my time is used wisely in each location.  They would be
    responsible for helping the local area rep or manager create a profile
    of the customer, their business and environment and what needs to be
    conveyed in my visit.  The reps know what will push the right buttons.
    
    I would set up another -800 number for customers wishing to leave
    suggestions and/or concerns about our products or strategies.  I would
    receive regular reports on these calls and make sure they are tracked
    and followed up on.
    
    Internally, my VPs and management teams would propose to me
    recommendations and solicit my ideas, however lower levels would
    certainly have a great deal more autonomy in "getting the job done."
    
    ..Larry 

                      <<< Note 3155.17 by DPDMAI::ROSE >>>
                             -< If I were CEO... >-

*    >>"If you were CEO, how would you fix Digital?"    
*    
*    Aside from the management levels, I would get back to the customers... 
*    kinda like the Airline commercial.
*    
*    ..Larry 

     Bob Palmer in Japan and China since June 4, 1994 

	Source: didital today (Vol V, Issue 22, June 6, 1994)

     Lee

    >> Bob Palmer in Japan and China since June 4, 1994         
    
    Big deal, he's been traveling for six whole days.  What's your point?
    
    ..Larry
    

 >> Bob Palmer in Japan and China since June 4, 1994 

How can he be in two places at once?


(For non-Firesign fans, this is a joke.)

    ...when he's really nowhere at all?  :^]
    
    						Firesign fan

	Larry

	Your dream was that as CEO you would visit the customer.

	That is what BP is doing.....

	BP agrees with you ergo

	We dont need you as CEO

	Lee

    I disagree on CEO travel:  A CEO's job is to keep the business flowing
    smoothly, not to be a salesman.  If we want a mock-CEO to travel and a
    real CEO to run the show, then fine, but every minute that a CEO is
    away is a minute when conflict between VPs can't be resolved.  And that
    is the heart of the problem.
    
    Steve Smith of Payne Webber has a perfectly plausible scenario which
    led him to put a "buy" on Digital stock a few weeks ago, after it went
    to around 20.  He sees a company like H-P buying Digital.  They can
    keep the assets that complement their own, and take over an extremely
    valuable installed base customer list.  They sell off the pieces that
    don't fit, some of which businesses are potentially valuable.  They pay
    for it mostly with the company's biggest asset, which alone is probably
    worth near the stock price:  Our tax-loss carry-forward.
    
    I know some PBU managers who really want to be spun off from Digital,
    and I really can't blame them.

    In today's modern day of communications, does it really matter if the
    CEO is at HQ or travelling?  The President of the United States travels
    frequently and is able to respond to anything happening anywhere in the
    world.
    
    RE: .22
    
    Was I ever being considered for CEO?  ...always the last to know. ;)
    
    RE: .23
    
    If products aren't sold, the CEO won't be CEO for long.  Making sure
    revenue flows in should be first priority.  That is pretty broad and
    must include internals:  making sure costs are down, products are
    solid, and manufacturing is smooth to name a few.  VPs have
    responsibilities for each of these.  If the CEO can leverage new sales
    in competitor installed bases, he/she is promoting growth.  This is a
    top priority and responsibility to the Board of Directors.  A CEO
    directly involved in creating revenue and stimulating growth can't be
    wrong.  A CEO focused on resolving VP squabbles can't be good.
    
    ..Larry

    	TIME !!!!!!
    
    		The concept of CEO thinking is this.
    
    	We have margins dropping faster than SG&A expenses (these are the
    $$$ most of us live off of..). This creates the "death spiral" where
    you are chasing yourself downward trying to generate a profit
    somewhere.
    
    	The idea of being the CEO is arresting this spiral. For example,
    I would flatten the management hierarchy immediately to three levels
    between a worker-bee and RP. These jobs would go bye-bye, never to be
    seen again. The funding gets pushed down to level one mgrs. and they
    live and die by their decisions. I'd put firing people for
    incompetence in vogue at Digital (no more CLUB DEC).
    
    	Then I'd start selective pruning. Spin off Digital Consulting
    after letting the field sales force choose up sides (meaning sales
    folks who have been successful selling DC projects can go to work
    there). Keep 60% initially, spin off 40% to existing stockholders.
    
    	Next would be Networks Engineering and Mfg. Again a spin off.
    
    	Last for this FY would be increasing investment in storage while 
    decreasing R & D spending another $100-million.
    
    	This is the kind of thinking I was looking for. Who cares where
    RP is today? What the H*** is he doing to build Digital? That is the
    question.
    
    	By following the above plan I set forth. At least we are on the
    road to recovery. If you can't focus responsibility and resources,
    you can't get the party even started.
    
    		the Greyhawk

    As an Account Manager my attitude to anything (rumoured to be) 
    happening in Digital is simple: "What will my customer's reaction be?"
    
    Or putting it differently: "Why for Pete's sake would they (continue to) 
    prefer Digital?"
    All our current actions ignore this question. The focus is internal.
    Reshuffling of management results in reshuffling of spead sheets only.
    Management hopes the numbers shuffle will suddenly/magically show
    profit.
    The "market" feeds us and ignore that trivial fact.
    
    What my customer is saying:
    "IT is increasingly complicated to implement, use and manage. The number
    of vendors of products and solutions is astounding and increasing. So
    I look for a simple interface with this market. Ideally it would deliver 
    me ease in doing business, with good advise and optimal price/performance. 
    This interface should, by definition, have a broad product range, and 
    superior knowledge of these products and how to use them, with good 
    knowledge of leading products from other vendors and suppliers."
    
    So I am basically selling solutions to him, not products (these
    solutions are of course loaded with products).
    
    Our reaction:
    Channel strategy, preventing customers to buy from Digital directly,
    because a $ 10 million/year partner can offer more cheaply than Digital
    Sales can to this $15 million/year customer. 
    Channels were supposed to broaden the market, but they go after the easy 
    kill of big accounts first. We just add extra mouths to feed in the supply 
    chain. Bye, bye profits!
    This may well be the auto-destruct strategy for big accounts of Digital.
    
    Suggested solutions/rumours:
    DEC (this stupid customer continues to call us so) to ditch Rdb, Storage, 
    OIS-products, ALPHA-chips factory...? Probably his confidence in our 
    product commitment will be dented. ;^)
    DEC/DC being spun off? Customers will go for advise on implementation
    and use of our products to someone else, who (surprisingly) might be
    biased on the competitor's product.
    Laying off employees in cascades. The customer is NOT impressed, because
    of the haphazard way it is carried out. He is noticing it drives every
    employee into survival mode for him/herself, defocussing this person
    from the client's issues.
    
    My customer presses me more and more to explain our commitment, vision
    and directions. I'd love to! We want to be THE Open Client/Server
    vendor in the market; fine, but with whom or what, in the future? 

One of the first tenets of business...COMPETITION is GOOD !!!  

Why would we want to merge with another HARDWARE company ? We have a clear 
leadership position in the technology business. We are AHEAD of the large
centralized systems business decline. We are driving the shift in technology
to decentralized computing which will make information power more robust and
profitable for MILLIONS of outplaced industrial workers. As the market begins
to demand more speed and simpler applications we will regain the market share
we had with VAX technology and before anyone realizes it, we will be releasing
even more advanced computing technology. If a merger is in the works we should 
be talking with Microsoft, Lotus, or Novell...a SOFTWARE focused company. A 
partnership like that would be profitable and provide a position of great 
market strength. Sure, alliances and partnerships will do, but these are in force
only as long as the ink is wet. 

Historically, we have always been a company driven to explore the very edges of 
new technology. In the future, the same will hold true. As we re-invent ourselves
and get used to running organizationally and strategically lean with solid 
margins the interest in our company will grow. As a company we will learn and 
be better postioned for future business cycles and shifting technology - never
forget that this is our first major evolution, HP , IBM have been through this 
before.

In fact, we will participate in the technology changes and foster new
business alliances that promote the industry as a whole. We may lose some of our
best and brightest along the way but with so many of you out there we will retain
the competent personnel required to support the rapidly changing environment and 
later to attract and re-attract some old friends. 


Dave

    I sometimes get the feeling that Digital Equipment Corporation is a lab
    experiment for the Harvard Business school.  Using the "Swiss Cheese
    Method" of cost contol, we are also providing the Swiss Cheese Method of
    infrastructure support.  The same expense, budget, cost reporting,
    finance and administration kinds of things that made it possible for
    our company to not know where the money goes nor where it comes from
    are being used to measure the success of the cost-cutting strategy.  If
    we ship a bunch of computers and then expect 2 years from now to get
    the contract revenue from the machines, a year from now expect to get
    some software upgrade revenue, a couple of months from now get some
    consulting service bucks, but the reporting system lags by 6 months to
    a year. How can the same system be used to measure the current layoff
    strategy?  Yet, does anyone see any difference in the way we report?  I
    don't.  If the infrastructure collapses, recovery is, in my opinion,
    unlikely.  Once customer confidence is gone, it's gone!  An earlier
    note in this string says that we are only looking from the inside. 
    That appears to be true.  To recover we need to start at the customer
    and work our way IN.  Does anybody really know where our customers are? 
    I think not.

    re: .25 Greyhawk
    
    Interesting...
    
    The DC spin off may present some problems you may not be aware of... 
    For example, all system management, network, telecom, audio/visual
    functions are done by DC.  In addition, they are deeply involved in
    selecting vendor software for internal use.  As well as developing
    custom software for internal use.  There are numerous 'internal' other
    functions done by DC.  This is, of course, in addition to the work done
    for Digital customers.
    
    I am not saying that all these functions are needed.  But clearly some
    of them do add value to company.  I leave the reader to determine which
    are of value.  I, for one, kind of like being able to communicate
    electronically across the company.
    
    My point is: Spinning off DC is not a cut and dry operation.  There are
    a whole host of considerations.
    
    Of course, if DC were to become an independent company, it most likely
    would have to view prospective customers' ability to pay... ;}
    
    Of course there is EDS and AA... ;} ;} ;}
    
    rww
    

    I thought that most of the support that DC currently does for Digital
    is on an outsource basis. Even if DC is spun off, I still see us being
    able to support our current clients (i.e., Digital).
    
    Just don't call me no DECoid! :)
    
    --- Gavin

    re: .30 Gavin
    
    I am not sure of the basis that DC does for Digital.  There is an
    exchange of mony (at some level) for services rendered.  Just as there
    is (was?) money exchanged with sales for selling DC services.
    
    The questions in my mind: Is the sum exchanged an internal or external
    rate, i.e. does Digital get a discount and how do the company benefits
    factor into this money, etc...
    
    But I guess the bigger question is which components of DC could, would,
    might, possibly, in theroy, and/or actually be sold?  Do we want to
    carve this up and , if so, how?
    
    According to some rumors, this has already been done.
    
    rww

        By a weird coincidence the "landmark" Maynard Hotel, between
        MSO2 and Powdermill Road, was leveled this week;  the final
        traces are being removed as the Board of Directors meets in
        MSO2 (100 yards from me), according to some speculation, to
        dismantle Digital Equipment Corporation.

        Anyone care to estimate how many years of people's lives have
        gone into building what is now being broken up?  It is
        clearly more than a million (10 years at 100K employees would
        be a million).

        Bob

    
        Re: .32   Wendy's is suppose to be going in there to feed the
                  multitudes looking for lean cuisine at MSO.
    
                          Mark