Conference 7.286::digital

         I love it. Now DO it.

What if AXP chips cost $250 each to make?  Then selling 20M will result in $5B
loss...doesn't sound like a good plan to me...

What if it costs more than $200 to deliver complex client/server software for
large networks?  And what about expensive software that delivers value to our
customers?

And do you know what it takes to ramp volumes in semi-conductor processes?

It's really easier than we (Digital) make it, but not as easy as .0 implies.

re .2

In point 1, I forgot that you want to sell AXP chips for $100...that reduces the
loss to $3B, if we sold 20M, and the chips cost $250 each to make...

    re: .2
    If AXP chips cost $250 each to make..we find a way to make them @
    $50.00.
    If it costs $200 to deliver complex client/server solutions..we find
    out why,fix it and deliver it less expensively.
    We've been holding on to the status quo for to long.
    Time to be inventive and aggressive.
    I like .0

Your suggestions have a lot of merit.  I have two questions:

1) If we "abandon" our installed base, what will be the impact on
   Pathworks sales?  [Same applies to terminals, disks, and other
   profitable segments]

2) How can we support our installed base if we can't support ourselves?
   Our we doing our customers a dis-service by clinging to unrealistic
   development and support expectations?

- Peter   

Isn't it illegal to sell chips for less than it costs to make them?
It's called dumping, no?

    RE .0
    
    VMS is still approx. a  3 Billion $$$ a year business. I think that
    it has some future. Even at a billion a year.
    
    Selling workstations for the price of PCs is absurd.
    We have to make a PROFIT to stay in business. For too long we
    have given things away. Those days are over. We have the best
    line of workstations ever. If we can't make money selling them
    we shouldn't be in business.
    
    			-Jim-

I have always wondered why , when I go to local outlets like Frye's, or Circuit
City, I have never seen a Digital Equipment Corporation item for sale.

Where is the visiblity? When Joe User goes shopping, he doesn't buy our PC's.
Why? Because it's not readily available. It's not there "in their face" like
any other computer manufacturer.

Someone please explain why we are not selling our wares on the shelves where
people are shopping?

Bob

Some of our printers will soon be sold at many retail chains soon.  The April 11
issue of Digital Today has an article on this.

I agree that a retail prescence for PCs is a good idea, although we're #6
already just with our catalog business.

Paul

    BUT, is Digital striving for #6 or #1... or #0
    
    

    At the last talk given by the CPBU VP, Larry Cabrinety, to "the
    troops", he asserted that the PCBU is looking at what the CPBU has
    learned and is doing in retail and will be following us soon. Someone
    in the PCBU has posted here or in MARKETING--sorry, can't find it
    now--that their products could be in stores before the end of the
    calendar year, if my memory serves.
    
    The DECwriter 65, in particular, should be in Fry's already. 

    how about if we set up some committee that will collect proposals
    from DECeeees (in certain format) for suggestions on how
    to improve profit and make a vision, then this committee will
    sort all these proposals out, and select the best part from
    each one and come up with a final proposal and make that available
    and act upon it.

    because many DECeeees now come and say do this and do that, and no
    one is taking the best from each, so my proposal is to fix this
    problem.

    this committed will be made up of the top DECeeees in the company, at
    least a senior consultants will be invited to be part of the selection
    committee , and the head of the committee must be at least a corporate
    consultant.

    every DECeeee is welcome to send their proposal , and a dead line
    will be given, then the committee will set to work with no interruption
    and with no bias to come up with the final proposal, and this proposal
    will then be give to Bob Palmer for final review.

    what do you think? is this a good idea?
                                      
    \bye
    \nasser

re:
>    If AXP chips cost $250 each to make..we find a way to make them @
>    $50.00.

And while we're at it, should we invent warp drive as well? There are things
which are, and things which are not, within the realm of technical
possibilities. I was under the impression that the FAB producing Alpha chips
was already about as "state of the art" as you could get in that business.

re: Retail exposure

You've been able to buy DEC PC-compatible printers at Lechmere for several
months now - maybe even a year.

-Jack

    Unfortunately, those who are paid to determine what we need to do
    and will ultimately control what actually happens don't seem to 
    have a clue.  
    
    That a superior technology such as ALPHA can be squandered is
    testament to how dysfunctional Digital is at this time.

>> re: Retail exposure

>> You've been able to buy DEC PC-compatible printers at Lechmere for several
>> months now - maybe even a year.


	LECHMERE ?  Hmmm, me thinks Digital can not envision a world
   outside of the 128 loop....OK may be on a good day when the sun is 
   shinning and the stock is rising, the 495 loop.

    re .0
    
    Actually, there are quite a few companies selling PC software for
    considerably more than $200, and people pay willingly.  The two major
    categories are software with unique capabilities that have few
    competitors and high value to their target audience (consider AutoCAD),
    and client/server packages where the per SEAT cost is low, but the
    total cost for a large configuration is still quite high.
    
    /Butch

           I'll probably get bashed tremendously for this idea, but here
           goes anyway.  WHY NOT cut everyone's pay by some percentage
           (10%?).  So, if you're making $50K/year, you'd be cut by $5K.
           I don't know the mean salary is, but if it was $50K/year,
           Digital would save $455M/year (91,000 x $5,000).  
           
           Hey, it's better than hitting the streets, isn't it?  WELL,
           I'm sure this will lead to some interesting discussion ... :-)
           
           Steve
           
           PS- AND, as an incentive, you'd get it back once Digital (or
           your division) started turning a profit.

re .17:

Sure.

And watch all the bright people left go straight out the door to other places
that would be more than willing to pay them industry-standard salaries.

It's a bit of a non-starter, no?

john

    One catch to this.... Digital is already approximately 100% lower in
    salary range than most other employers in the industry today... So, if
    you want to cut 10% from an already lower than industry salary, you
    would most definately loose most of your best workers/managers.
    
    This information is from personal and current experience!
    
    

Why do this when company leader B.P. did not turn down a raise a while back?

Sorry.

Lee

    .17
    
    
    HAHAHAHAHAHAHAHAHAHAHAHA!!!  Obviously a joke! I thought April Fool's
    Day already passed by!  HAHAHAHAHAHAHAHAHAHAHAHA!!

    RE: .17
    
    The problem with the idea is that we'll never see our 10% again.  This
    company, like many other large companies, has a problem with the salary
    planning.  First we're told that it's pay for performance.  Then we're
    told reviews are being stretched out (for obvious reasons).  Then when
    we do get a review, the increase is for inflation.  Now I don't mind
    receiving a cost of living increase, just call a spade a spade.
    
    If the company came to me and said, we want 10% of your salary, you'd
    hear the papers rustling.
    
    chg

>	LECHMERE ?  Hmmm, me thinks Digital can not envision a world
>   outside of the 128 loop....OK may be on a good day when the sun is 
>   shinning and the stock is rising, the 495 loop.

Lechmere has stores in upstate NY.

Re: .0

An interesting set of proposals. I don't think it's as radical as some
replies would infer. In a recent Business Week there was an article about
IBM and it had some very candid comments from IBM execs.
Some interesting points:
 
 o the chart with profits from mainframes shows them "going down a cliff".
   $14bn in profit lost from mainframe related revenues since 1990.

 o minicomputers (AS400) are at best holding their own, expected to go down
   the same cliff within 2 years.

 o IBM PC sales are booming. The current revenue from PC's falls just short
   of the mainframe and AS400 sales combined.

By the end of 1995 IBM forecast their mainframe sales as being under $5bn!


The Computer market is the PC market, everything else is just a niche.

Obviously DEC is not IBM but we are subject to the same market forces. 

I would like to add one to your list in .0 - 

Palmer should go visit IBM, Intel, Apple, Motorola, Sun. Get everyone to
agree on THE RISC Architecture and then scrap the rest. The market will
force this in time anyway!   And yes I know there are too many vested
interests to make it happen!

Mark

    Re: .15, .23 (positively) and .24 (?)
    
    It takes VOLUME to sell retail nationwide. When you don't have the
    volume or distribution to keep up with a nationwide potential demand,
    you have to keep your sights on a limited sales area. The big chains
    demand that you keep up your end or you lose your contract. That's one
    of the lessons you learn when you step into the retail world.
    
    The next wave of stores where CPBU products will be sold includes
    nationwide chains (e.g. Sears) and several regional ones (e.g. Fry's,
    which I mentioned earlier.) You can find two of our laser printers in
    this month's MacWarehouse catalog at least. There's one list of
    retailers given in reply 1627.1 in REGENT::ANSI_PRITNING.

    re .17
    I used to work for Intel and they often had cost problems in the
    beginning.When they asked for volunteers to take a pay cut of 10% for
    six months,89% of European employees volunteered.When they asked
    manufacturing to step up production,all of manufacturing worked 25%
    extra time for no pay and of the remainder of the
    employees,approximately 70% did the same without being requested to do
    so.Good spirit?Yes and good management.
    I,for one,will give the company the chance and VOLUNTEER to reduce my
    salary by 10%.If the lead can't come from the top then lets do it from
    the bottom.Crazy?Yes but can YOU afford to wait fot someone to give you
    a 100% salary reduction-especially if that someone in the management
    morass keeps his salary?
    Think about it.

          <<< Note 3006.17 by SALEM::SCARDIGNO "God is my refuge" >>>
            -< Salary ............ cuts (oops, there I said it) >-
       
        >>>  I'll probably get bashed tremendously for this idea, but here
        >>>  goes anyway.  WHY NOT cut everyone's pay by some percentage
        >>>  (10%?).  So, if you're making $50K/year, you'd be cut by $5K.
     
    
    	Having had, like so many others in UK if not elsewhere, ZERO%
    salary increases for the last three years reviews - now well into the
    fourth year without any increase, I have already had a pay cut of
    around 20%(!!!!!!!) due to inflation!
    
    	Like the other contributor to this Topic wrote - it's a bit late
    for April Fools day!
    
        >>> So, if you're making $50K/year,
    
    	As for $50k a year - is that also part of the joke?  All rather
    sick, I'd say!
    
    	Now, please don't think I' trying the "I'm alright Jack" bit, my
    future depends upon this company too, so, I have a vested interest in
    DIGITAL recovering.  That interest also includes the Stock for which I
    have paid between $28 and $85.  So I'm looking for that to increase,
    not decrease in order that I can sell them when I retire - which isn't
    that far away!
    
    	Several of the suggestions in this conference, for the turning
    around of DIGITAL seem emminently sensible, but .0 seems to suggest
    abandoning most of our installed base in order to concentrate on the PC
    market.  Well, I thought that I was part of an ethical company that
    didn't abandon its' customers.  Not only that, as another contributor
    here pointed out, OpenVMS is a $3B business.  .0 seems to suggest that
    we walk away from that.  There is much more to the world of computing
    than PCs.
    
    	Not only that, is PATHWORKS all that it is cracked up to be?  Here,
    we have taken out PATHWORKS and replaced it with Novell Netware because
    there are too many perfomance problems with PATHWORKS - and this is
    internal DEC!  Please pursue this of line, not rathole this topic.  I
    am VERY deeply grieved about this situation and I can't see why the
    problems with PATHWORKS cannot be rectified, not go out and buy a
    competitors product!  Again, please do not pursue a rathole here - off
    line it.
    
    				Malcolm.

        re: .19
>                                                                ... So, if
>    you want to cut 10% from an already lower than industry salary, you
>    would most definately loose most of your best workers/managers.

           First of all, WHERE are they going to go?
           
           Second, maybe we'd lose our worst people, too.
           
           Third, as one of the other replies eluded to, this MUST apply
           to those at all levels... 
           
           Or, we can just cut 20,000-30,000 more jobs, and hope we
           didn't cut the wrong ones.
           
           Steve

               
>           Or, we can just cut 20,000-30,000 more jobs, and hope we
>           didn't cut the wrong ones.

    I have yet to be convinced that we should have cut as many people
    as we have already. Before anyone should consider taking a 10% cut
    to help the company out they should first ask themselves if it's
    a good investment. In other words, do you believe that management
    can turn things around. If not, best to look out for number one
    and take your chances.

    			Alfred

    BTW, several times in the past 12 years employees have been asked to
    delay raises. Most went along with this believing that when good times
    returned the company would reward its employees and "catch up." Well
    we've had some good times, even very good times, between those salary
    actions and guess what? The company never rewarded its employees. I've
    seen nothing to indicate that "share the pain and you'll share the
    gain" is likely to be reality in the future either. If we all take
    a 10% cut the company may or may not improve, my guess is that it
    will not help because the problems are systemic are not being fixed,
    but we can be sure that any gain will be shared equally. Equally 
    among top management but not filtered down the the rank and file
    employee.

    Actually the thing that would help the company most is an across the
    board *raise* of 10%. It would let the people know that they were
    valued, that they were needed, and that the company wants them around
    and productive. That and a major reduction and replacement of
    management people would really turn things around.

    			Alfred

    
    I believe a salary cut of 10% was part of a HP revival back in the
    1980's.  At least in Europe (unless I'm confusing them), they aksed for
    a 10% salary cut and something like a 2 year wait to recover.
    
    Would it work in DEC; it depends, only as an earleir noter said, it
    could work (saving $500m a year ), but its only viable if there is a
    strategy to get us out of this downward spiral.

>>  Actually the thing that would help the company most is an across the
>>    board *raise* of 10%. It would let the people know that they were
>>    valued, that they were needed, and that the company wants them around
>>    and productive. 
Youve yet to show that employees are improtant to DEC management. Matter of
fact looking over the past few years Id say the track record shows that
management views the work force (those producing a salable product) as
expendable/replacable. I know that some groups layed people off and then hired
externally. Matter of fact not long ago a memo circulated around VMS land that
stated DEC would rather layoff and rehired externally rather than retrain an
existing employee. The subject of that memo was to warn external employees
that they shouldnt use confidential information from their previous job.

A friend of mine at IBM Canada told me that they all took a 5% cut in pay
last year.  She didn't seem upset about it and felt it was the best thing for
the company until they return to profitability again.  Although, with the 
raises (or lack of) Digital has been giving over the past few years a cut
like this wouldn't be easy for a lot of people.

GRM.

  Given the option of a 5-10% cut or losing your job; what would you
  do ? A few individuals have predicted *exactly* what has transpired
  over the past few years. I'm afraid the future is not too bright
  if their remaining predictions are realized.

  And in case you're wondering; Digital will be a profitable company
  in a few specific markets that employee about 20K employees by 1997.
  Two years ago, I said, yeah, right. Now, I'm going to night school.

    Since noone can tell me if a 5-10% cut will keep me in my job, I don't
    think I'll take the risk, because in the worst case, it's also an
    immediate cut in my unemployment pay.
    
    Charles

It all depends in your trust of Digital doing the right thing.

Let's use the US Govt. as an example... would you support a 10% increase
in your federal taxes in order to 'turn around' the current fiscal picture?
Most people would say "NO" (or maybe even "#(*& NO!!!") because the US
Govt. has a track record of jacking up spending each time tax revenues
increase with a net result of zero or negative progress towards reducing
the deficit.

Now in DEC's example... are you convinced that all DEC needs to solve its
problems is a bit more cash? Cutting salaries by 10% is going to generate
cash but that is all. It does nothing to change the way we do business
and is certainly a demotivator. If the pay cut was part of a good, solid
plan for recovery that is visibily communicated throughout the
corporation, then I would say fine... but to me, DEC still seems to be
suffering from the same kinds of problems that got us into this mess. If
there is a solid recovery plan news has not reached me yet.

Lee

re: .-1, Lee

> If there is a solid recovery plan news has not reached me yet.

Amen. That _IS_ the scary part. This company used to be managed by folks who
made their reputations by putting a stake in the ground and taking a risk.
That was the environment upon which the product lines thrived.
And there were the occasional heads that rolled as a result of missing the
targets. Today, everyone's too damn scared to mount any targets and we just
sit around waiting for the end of the quarter to see how the numbers turn
out as if it were a roulette wheel or something.

And the odd thing is, none of this is rocket science.

-Jack

re pay cuts

I'll take the same pay cut % as our CEO and SLT.


Willingly.


I'm not re-planning my household budget.

Dave

RE $100 Alpha chips:

Unfortunately, it would probably take a 50-VP task force
a good two years to figure out exactly how much they DO cost
us to make...  By which time the picture would have changed radically.

Accounting seems to be one of the things we do worst of all...

And before anyone flames me, I am NOT requesting that ANYONE give out
the actual figures.  I know that they are highly confidential (if they
are known at all, which I sincerely doubt)

According to the recent Forbes article, it costs $190 to make an Alpha chip.

    In 1987 HP began rolling out a program of pay "incentives" which
    affected the field organization.  You were paid your base salary with
    the potential for a -5% to +10% dependant upon your area's meeting
    their sales budget (I was in sales support - SE - not sales).  Managers
    lead the way for the first two quarters, and they lost 5% in both.  I
    came to Digital before it hit the worker bees.
    
    More of the picture - HP gave out profit sharing checks to all
    employees twice a year (in addition to the stock purchase plan).  The
    average was about 5% during the mid-80's (but is probably more today). 
    Rather than a pay cut, profit sharing may get things moving in a more
    positive direction.
    
    From my point of view, the problem Digital has is not a $$ one, it's a
    "what business am I in?" one.  We constantly confuse the market to the
    point where customers don't know what we stand for.  All they know is
    64 bits, which means we get to sell a bunch of workstations and Alpha
    PCs.  Roll in storage and you have the 20,000 person company, if that.
    
    Mike

Why don't we just buy some of our own stock (or print it for that matter) 
and give it to employees instead of 10% of their pay.  If we can get the company
to turn around we could all get rich.  

After all isn't investing in the future what we are talking about?

I would really like to see Bob Palmer and some of the top staff start taking half
of their pay in stock.  Tell me Bob can't live on $450K/year in cash.

I want to see Digital succeed and am doing what I can to make that happen but
it seems the company structure just gets in the way and much of the informal
network is gone.

And it is hard to get real excited when it seems you have more commitment to the
success of Digital and the willingness to make sacrifices than the upper
management does.

Until the employees get excited about contributing we will never see their best
efforts or our best efforts as a company.  Our best effort as a company is 
exactly what it will take to get us out of the current quagmire.

It is management's responsibility to inspire employees to do their best.  This is
what is missing.

	Kim Mains

    Pay cuts?  I've already had mine.  I've worked in the same job for
    slightly over six years.  In that time, my salary has been raised
    twice.  The average time between raises was 2.5 years.  Neither raise 
    was over 5%. 
    
    I've made my monetary donation to the cause; I know I'm not alone
    in my position.  
    
    Why should I take an additional cut in salary then the President and
    CEO accepts a bonus that is several times larger than my entire salary?

        I have thought about whether I would be willing to take a pay cut
        before the issue  was raised here.  My decision was that I would,
        under certain conditions:
        
        A) A clear plan in place that I believed would turn us around
        
        B) Some mechanism that would guarantee that when we turned around
                I would get my money back, plus hopefully a bit more.
        
        I totally agree with an earlier  sentiment  that  a  pay  cut  is
        infinitely better than being laid off!
        
        Anker

    Re. 45
    
    After thinking about this a very lot. I would also agree a pay cut
    is better than the company going out of business.
    
    I also agree with your statement about certain conditions being put
    in place. I have a very distinct feeling a lot of people in this
    company and in this conference do not realize how close we are to
    going out of business. 
    
    A pay cut would be better than losing everything that I have worked
    for, over the last 22 years.
    
    People have to start doing everything that is humanly possible to get
    this company back on track, cut the moaning and complaining. The time
    for complaining is over. If each of us do not do whatever we can do
    to turn this company around, there will not be one for any of us is
    calendar year 1995.
    
    It is time to take action. The time is right now. I will not be in any
    notes file until I have done my part, no matter what it takes, until
    our fourth quarter closes on June 30th 1994.
    
    It is time to get it done!
    
    Dave
    

    
    
    i'll take my pay cut just as soon as BP and friends take theirs. And
    they absolutely would have to produce a clearly articulated plan as to
    how they intend to right this ship and how we will also be rewarded 
    for our collective sacrificing. And by the way, a 10% pay cut for BP just 
    isn't the same as a 10% pay cut for me. I don't think this is likely to 
    occur. My loyalty to DEC has been chipped away with each successive
    round of layoffs absent any clarity of vision.  

    
.46>    A pay cut would be better than losing everything that I have worked
.46>    for, over the last 22 years.

Everything I have worked for exists outside of Digital or within me. If
Digital collapses I will survive.

Lee

    My pay, along with just about all in sales dropped by 20% effective
    Nov 1st.  Yes, three out of four weeks it is actually 80% of what it
    used to be.  On the third thursday, I get extra for what revenue was
    shipped to my accounts for the previous month.  If I sustain a 12%
    revenue growth over last year while per unit NOR has dropped by 40%, I
    might make it all back.  Might get an F16 for Christmas too.,
    
    So sure, come on in the water's fine.  
    
    

An across-the-board 5% pay cut would be clearly regressive.  I could see maybe
a cut of 1% for every $20K of salary you make, or something like that.  And
maybe let the real stalwarts here voluntarily give back more if they want,
with it being reimbursed in the event of involuntary severance.

But why not try a voluntary buy-out first?  Either a "volunteer for the current
TFSO package and keep your pension" or a pension buy-out like the one rumored
in here before.

There are plainly many unhappy people in Digital today.  If some of them would
rather leave but are afraid of doing so without some sort of severance, isn't
it better to just get them out?  At least you'll know that the people left are
highly motivated or possessed of blind faith in the company.  We've demonstrated
by now that we can't do TFSO fairly or in ways that leave us with the kind of
resources we need--there are too many places for the politically connected to
hide, and too many others where talented people are under(or wrongly)-utilized.

And we don't seem to have the stomach to make the tough cuts, like mandating
a 1-to-20+ manager-to-report ratio and sharply limiting the number of displaced
managers who could then move into consulting or "project management" positions.

And we can guess that all the tough talk about "firing nonperformers" will cause
the pain to fall disproportionately on individual contributors and political
mavericks...there's just no consistency to performance reviews to support it.

Why keep beating our heads bloody against the same walls?
								- paul

Re: Salary cuts...

How about a slightly different angle:

For salaries <30K:		voluntary reduction up to 10%
For salaries 30K...110K: 	reduction by 10%
For salaries >110K		reduction to 100K

but with the difference (i.e. the 10% or the excess of 100K) paid
in stock purchase options spread, for example, at 40% for 1 year options,
40% for 3 year and 40% for 10 year.  Yes, that is 120%, or an effective
increase of 20% on the difference.

To illustrate:  Someone making 50K is reduced to a 45K base salary
plus 2K each in 1 year, 3 year and 10 year options.  Someone making
200K is reduced to 100K with 40K in each of the options.

This would sharply reduce the short-term liabilities, link long-term
liabilities to profitability and create a strong incentive for those
presumed to be the most influential in Digital's success.

For the employees it would offer the possibility of significant increase
as long as Digital continues at least as well as is currently expected.
This it would do without unduly taxing those in the lower income
brackets.  

John

        RE: .50 voluntary TFSO

    The problem is that anybody worth his/her salt can take the knowledge
    gained at Digital and find gainful employment elsewhere.  I'm sure
    there are areas which are not as flexible, but as a general rule, most
    dedicated, hardworking, committed, capable engineers and s/w pukes can
    find work.  So, the company doesn't want to encourage any mass exodus.

    If you disagree, why hasn't he company offered it before?  Let's go
    back to when they had nice packages.  I've been with the company now 4
    years (well, I have two weeks too go).  I calculated that I would
    receive 16 weeks severance.  If my manager walked in and said, would
    you leave for 16 weeks pay, plus options on your systems at home, I'd
    be gone.  Whoosh!  I'm tired of the bull.

    chg
    
    p.s. - I like Digital.  I like working in the field and the equipment I
    can get my hands on.  But I have 9 mouths to feed in my family. 
    Remember the big emphasis on client/server?  I just received a mail
    message indicating some Client/Server Integration group was disbanded.
    {does not compute, does not compute......}

    
    re: .-1
    
    i don't think it would take a mass exodus to cripple the company. You 
    need only lose the "right" few thousand or so to cripple the company.
    Sort of like an ocean liner with a total passenger count of 500 and
    a crew of 50. You need only lose 50 of the "right" sort (the crew) and
    the ship becomes basically useless.
    

    re: .46
    
    After all that's gone down, would you trust management to keep any
    commitment regarding future compensation for a pay cut?
    
    Perhaps THAT's the real problem around here...
    
    \dave

    
    re. cross the board pay cuts ...
    
    There is tons of evidence from other firms that have ton this that this
    results in a flight of a lot of the best people.  (and it is not
    proportional ... the best people have the easiest time finding another
    job).
    
    Greg
    

Hello,

  I'm looking for some help.  My wife works for a software company in Cambridge.
Her company has a collective marketing agreement with Digital.  The company
has a proprietary software suite that is sold to financial institutions.  The
software runs on both Digital and IBM platforms.  They don't really influence
which platform to run on, but configure the system once the choice is made.

  They will be holding the annual user's meeting at the end of May.  There will
be five hardware vendors there to present their equipment.  Digital, IBM, 
Kodak, and two optical disk storage companies will be given booths to 
demonstrate hardware, as well as, a half hour slot to give a presentation to 
customers.  Digital and IBM are the CPU vendors, the others sell peripheral 
products for the software.

  IBM will be presenting it's RS6000 UNIX boxes.  Digital will feature a couple
of ALPHA AXP systems in their booth, but has chosen to present some 
re-engineering software that runs on INTEL based 486 Digital PCs.  My wife's
company was very surprised to hear what the Digital representative chose to
present to their customers.  There are a few reasons for their surprise.  First;
the software we are presenting is commercially available for a fraction of the
cost that Digital sells it for.  Second; my wife's company sells a similar 
product (they don't really care that the software overlaps, just surprised).
The third and most surprising thing is;  there will be representatives from over
100 banks in the United States and Europe, include the ten largest banks in
the U.S. in attendance...WHY ARE WE NOT PUSHING ALPHA, ALPHA, ALPHA!!!!!

  My wife's company has already planned to port to ALPHA AXP by the end of the
year; so this is not the problem.  There are only five vendors to show products 
(ie. plenty of time for each potential customer to visit); is this too few a
number of vendors to make it interesting to us as a company?  There won't be
a direct opportunity to sell equipment at the show; is this the problem?

  There are a number of other interesting facts that are not for this public
forum, but I would be able to share off-line.  So where do I get help with this?
Give me a name.  Give me a phone number.  I've already spent far too much time
with this problem, this is not my job (but I feel it is my responsibility).  I
walked around Hudson for a day talking with everyone I knew to get the name of
someone to help me.  I either got:  I don't know, or a false lead.  I came close
once.  I had my old cost center manager call someone he knew in marketing and
sales.  He left a message, the sales and marketing person's secretary said the
person to talk to was in a meeting, but would call me at 4:00 last Thursday,
April 14th.  I left a meeting early to be by my phone to take the call....it's
Friday the 22nd....I'm still waiting.

  Maybe I don't know all the facts.  If I don't, I sure would like to be
enlightened.

  So...is there anyone out there that can help me?  I can be reached at DTN
225-5050.  I will be here most of the day.  I can be reached with mail on
CADSYS::BENOIT.  If you send mail, and I don't have time to talk today, I will
send you my home phone number.  We can talk this weekend.  I didn't put 12 years
into this job to watch it slip away.

Michael T. Benoit

    The organization which I work for has been losing its best people
    to other companies for a while now, two or more years. The lack
    of concern with management is amazing. 
    
    Jim C.
    

    Before I see my wages reduced, I'd like to see non-performers fired,
    staff between VP sales and District Management fired, staff between
    District management and branch management fired, marketing outsourced
    and the ability to ship product returned.
    

    	There are certainly already financial incentives to move out if you
    are good. 18 months ago my son was TFSO'd. It was just one week after
    he had received a significant pay rise, so he was TFSO'd on the higher
    salary. Within 3 weeks he had another job at 30% higher salary again,
    and has had another pay rise since. If he had stayed with DEC (not that
    he was given any choice) he would probably not have had much after the
    first pay rise.

    Well, it depends how you define "staff", i.e. there IS a certain amount
    of staff function (but we don't tend to take a minimalist approach
    here, do we ;-) neccesary, but too oftn staff jobs tend to be "holding"
    patterns in a good-old-boy net.
    
    I also think that we need to focus on single points of accountability,
    with commensurate authority. From a field perspective, that would mean
    END THE STOVEPIPES, and give the Sales Rep metrics and authority over
    the revenue stream from the account.
    

Re: .54

Good analog... ship with CREW and PASSENGERS. 

Digital needs MORE crew and LESS passengers.

Lee

Re: .62

I disagree.  What we need are more passengers ... fare paying passengers, 
but we won't get them unless they know where we're sailing.

Personally I think the pay cut is a bad idea and will not work. This is OK 
for non-performers and those who have no qualifications and have no place 
to go, if they lose the job. Probably these non-performers are already paid too
much for their job. I am of the opinion that if Digital forces the pay cut, 
many good performers will leave. Only the non performers will cling to this 
    company.

Also I do not believe that the money saved will be used wisely. The boondoggle
trips to Europe and Far East will continue. More VEE PEE hirings will continue.
and the management will find more ways to waste money. 

I wonder the topic is just yet another trial balloon launched by some one in
personnel to test the waters.. Just Curious..


    

    Yes, I'd be another one that could sign up for a 10% pay cut, 
    but only under some conditions:

        It has to be voluntary.  Some people could afford to do it, 
        others can't.  The latter shouldn't be penalized.

        It has to be clear how this will help Digital, so that 
        the money saved doesn't just disappear into the general 
        black hole that company finances seem to be; i.e., make it 
        clear that the pay cuts save N jobs, or whatever .....

	There needs to be some reward to the individual, whether 
        it's deferred payment, or alternative compensation (stock, 
        shorter hours, etc.), or whatever .....

        Not least by far, upper management (Mr. Palmer and SLT to 
        begin with) finally would have to lead us by example.  No 
        more "handsome" pay increases, but instead a handsome 
        voluntary pay cut, like some other CEOs, to show commitment 
        the company and the troops.  At this point our head guy 
        still doesn't understand what an opportunity he lost to 
        affect positively every single person in the corporation 
        by declining his increase.


    Well, haven written that, and multiplying out the probabilities, 
    I'd say that unfortunately the chances of such conditions being 
    met are approximately negligible.  But try your own math.


    Peter

    FWIW:  Mgr. and IC 

    If I were going to use my own money to help this company out, I would
    rather put it in a local or regional "pot" to buy decent advertising
    and/or marketing.  Too many people still do not even know we exist. 
    How could they make a decision to do business with us?
    
    OR.......
    
    I would put my money with other employees to buy out the company....
    pretty soon it might not take that much!
    
    I definitely agree with other noters who wouldn't give any more than
    what our leadership would give as far as my income is concerned.  I
    have been appalled at news of Palmer's bonus before the company was in
    the black and that of the four VPs who sold their stock at a time when
    morale is already so low we have to look up to see bottom!
    
    Another $.02 worth

    
    I'm not sure about what to do, but the SLT, BOD and CEO should be sure.
    There should be a swift statement about what we are going to do, and
    not one of those wishy-washy PR statements. WHY HASEN'T ANYTHING BEEN
    STARTED? 
    
    	This is one of the major reasons we're in this mess, it takes
    forever to get anything done. 
    
    ed

           RE: 3006.64

>Personally I think the pay cut is a bad idea and will not work.

           Well, everything else hasn't worked, either!  It's high time
           for a "breakthrough" idea, isn't it? (to use a mgmt term) And,
           I agree, the mgmt leadership is this company MUST take the
           lead!!!
           
>I wonder the topic is just yet another trial balloon launched by some one in
>personnel to test the waters.. Just Curious..

           No, I don't work in Personnel, nor am I Jack Smith :-)
           
           Steve
           
           PS- If anyone in Personnel is reading this, please don't blame
           it on me :`-)

re: .53

It's hard for me to believe that the people who would leave will instead be
hard-charging contributors if they stay.  A buy-out doesn't give them any
more money than they'd make by staying--what it gives them is TIME to get on
track with other things.  So presumably they'd rather be spending their time
on those other options rather than spending it working for Digital.

We've tried most of the other approaches.  They haven't worked.  QED.

								- paul

    re: 10% pay cut
    
    When I completed my taxes this year, I discovered I already took a
    cut of nearly that much (according to the IRS) when I lost my Digital 
    vehicle.
    
    Things are very tight now.  I have no room in the budget for yet
    another paycut, and I believe I am not alone.  A pay cut would be a 
    sure way to destroy what little morale is left in this organization, IMHO.
    
    We will never become profitable by cutting salaries.  We need to make
    sales.  We need to deliver products.  The more time we spend diverting
    attention from these areas onto unrelated internal issues, the more 
    likely we are to fold up this company and go home.
    
    We need to focus on improving our ability to sell and deliver.  Leave
    these demotivating internal "fixes" behind, thanks.
    
    -- Russ

    IMHO

    	The Good Ole Boy Society that is firmly entrenched within Digital
    management structure needs to be dismantled before any progress can be 
    made in any direction.

    Joe

    Have we bled to the point where such dismantling is the obvious and
    unavoidable next step?  I certainly hope so.  Business as usual
    (including "TFSO as part of our normal business process") has hardly
    been working.  Time for radicalism before it's too late.  At the risk
    of adding yet another metaphor to the debate, I note that it's been
    more than a century since leeches (i.e., the practice of bloodletting)
    went out of style for treating disease.  
    
    Kinda hard to have "the vision thing" when you're woozy from too little
    blood to the brain.
    

    	A few years ago under Ken it seemed that we did actually have some
    sort of vision. We knew hardware revenues were falling (because
    hardware was becoming cheaper). We knew support revenues were falling
    because hardware (and to some extent software) was becoming more
    reliable. The opportunities to maintain a company of our size were in
    services (including training) and consulting. We would be taking
    companies like Arthur Anderson head on, but we had taken IBM head on
    and come in a good second. Salesmen were told to go out and sell
    Digital Consulting.
    
    	But they were measured on hardware sales.
    
    	The reason was simple. If you sold $500,000 of hardware at low
    margin, that might be reduced further by some discount, then you had
    $500,000 to your credit. If you sold software (or other) consultancy
    for $50,000 that had a 50% profit margin then you would have to make
    ten times as many sales to get the same bottom line for your manager,
    but the second sale would often enough have brought DEC the same amount
    of profit as the first.
    
    	What are sales (and sales management) measured on now apart from
    headcount reduction? How you are measured determines what you are most
    likely to succeed at. Bob Palmer is measured on cost cutting, it seems,
    so when costs go to zero...
    
    	Of course, we have now got rid of most of the people who could have
    provided consultancy, so there is no point in trying to go back to the
    strategy of a few years ago.

>================================================================================
>Note 3006.73           What We Need To Do, given losses...              73 of 73
>PASTIS::MONAHAN "humanity is a trojan horse"         28 lines  24-APR-1994 03:55
>--------------------------------------------------------------------------------
>
>        Of course, we have now got rid of most of the people who could have
>    provided consultancy, so there is no point in trying to go back to the
>    strategy of a few years ago.

	Dave,

	You hit the nail on the head.

	El Gringo

It's clear that the things we've tried so far to turn the
company around aren't working, so yes, it is time to try something new.

If pay cuts are the best thing 'we' can think of, then it's time to pack
the office and find a new job, with or without TFSO.

	Joe

    It's time for drastic measures.  Digital's CEO should:
    
    Immediately tell all vice-presidents to justify their jobs.  Give them
    a one-week assignment to write a one- or two-page explanation of what
    they do that is useful to the company.  All those that don't give a
    good explanation are fired.  Those that write entire paragraphs of
    fluff and bull with strings of phrases like "corporate key strategy
    solution partner account discussions" are shot.
    
    Tell all employees their new jobs are to _produce_ for the company. 
    Employees are empowered to cast off impediments and create new
    projects.  Do the right thing.
    
    Tell all managers at and around the cost-center level that the sole
    criterion for their employment in one month is whether they have fired
    non-performers.  For the managers' managers, the criterion for their
    employment in two months is whether they have fired the managers who
    didn't fire the non-performers.  Continue the progression upwards.
    
    After the non-performers are terminated, each employee's compensation
    is adjusted upward or downward based on the ACTUAL results they
    achieve, regardless of supervisor's review.  Upon completing a
    successful project, all contributing employees get a raise -- within a
    month, not more than a year down the line after the project gets on
    their review and their review is used to schedule their salary increase
    and the increase is budgeted and goes into effect in some future fiscal
    year.  Those involved in an unsuccessful project are held back or
    even demoted slightly.
    
    Recruit star performers.  Bring leaders and visionaries into the
    company, even if they have to be paid more.
    
    Establish a corporate library, not for books, but for ALL information
    in Digital's possession.  Access to documents and keyword search should
    be uniformly available from a single interface -- international
    standards documents, current project plans (with appropriate access
    controls -- time for a single corporate password system).  The library
    serves EVERYBODY:  sales staff needing standards, descriptions, or part
    numbers; engineers needing algorithms; new employees who need
    orientation information; et cetera.  The network is exploding and
    information is the new commodity -- Digital must master it NOW.
    
    Finally, Digital has many assets that are hard to sell now -- real
    estate in New England, et cetera.  Digital should have an ongoing
    program of converting these assets, as opportunities arise, to cash or
    assets that are readily saleable.  The purpose of this is to maximize
    the return to stockholders when Digital is liquidated by avoiding the
    losses that would occur if all the assets are sold at once.  This may
    not serve the goal of perpetuating the company, but our ultimate duty
    is to the stockholders, and their assets should be protected.
    
    
    				-- edp
    
    
Public key fingerprint:  8e ad 63 61 ba 0c 26 86  32 0a 7d 28 db e7 6f 75
To get PGP, FTP /pub/unix/security/crypt/pgp23A.zip from ftp.funet.fi.
For FTP access, mail "help" message to DECWRL::FTPmail or open Upsar::Gateways.

    It is sad that this discussion, started by me on some radical proposals
    to end the losses, has withered to whether we should all take a pay
    cut.
    
    1. If we can't make alpha chips for less than $100 and make piles of
    money, then we shouldn't be in the chip business. Now, I'll make the
    statement more precise: if the RAW COST of making the chips from the
    RAW COST of the blocks of silicon is more than $100, we may as well
    shut the plants down now. Because Intel and MIPS can do it for that
    cost. That has NOTHING WHATEVER to do with the amortized cost of the
    factory. I'm talking about raw costs: the cost to take a silicon wafer
    at one end and get alpha chips out the other.
    
    2. The comments about software costing more than $200 to make is
    inconsequential to the discussion. The cost of software is NOT the
    development cost, it is the raw cost of the package (the CD and the
    documentation). If you sell a million copies of a software package
    for $200 that costs $20 to package up, then you have made $180 million
    dollars. Hopefully that is more than the cost of the software
    development effort.
    
    What I am talking about here is what Peter Drucker calls "Price-driven
    costing". You find out what you can sell it for, and then decide how
    you can find the way that it will cost a bunch less to make it.
    Digital's model is "cost-driven pricing" which doesn't work anymore.
    The customers vote with their money, and they are not voting for
    Digital because our prices are too high for the value they get.
    
    Re: workstations vs. PCs: this is why we need to sell workstations
    at PC prices:
    
    Quiz: What is the difference between an
    Intel Pentium PC with a 1 gigabyte disk, CD-ROM, and 64 meg memory,
    and a Digital OSF/1 workstation with a 1 gigabyte disk, CD-ROM, and
    64 meg of memory.
    
    Answer: The Intel PC can run 100 times as many software packages
    (this is literally true), gets the job done almost as fast, is easier
    to use, is easier to get fixed, is easier to get replacement and
    upgrade parts, is easier to get help, and costs a whole lot less.
    
    As we used to say in calculus class: QED
    
    								Jon

re Note 3006.77 by RANGER::JCAMPBELL:

>     Answer: The Intel PC can run 100 times as many software packages
>     (this is literally true), gets the job done almost as fast, is easier
>     to use, is easier to get fixed, is easier to get replacement and
>     upgrade parts, is easier to get help, and costs a whole lot less.
  
        And these days, sad to say, there is less perceived risk that
        Intel will go out of business and leave you with an orphan
        from which you must eventually migrate.

        We have to be significantly better and cost no more --
        preferably less.

        Bob

    re:.77
    
    Intel can make a chip for under $100 but MIPS can't.
    
    MIPS doesn't make chips.  They aren't even a company, just an arm of
    Silicon Graphics now.  And Sun doesn't make Sparc chips.  Nor does
    Cyrix make its Cx486 series.
    
    
    Intel makes chips.  Motorola makes chips.  Moto makes PowerPC c hips
    for Apple and IBM (who makes chips for Cyrix).  NEC and Siemens (I
    think) make chips for SGI/MIPS.  A few high-volume foundries make chips
    for low-volume design houses.
    
    Vertically-integrated chip building is expensive and requires high
    volume to be profitable.  Hmmm... I wonder what that means to Digital's
    future.  SOmehow I don't see AXP getting to Intel volumes.

    re: 78
    
    Indeed, you are correct. Intel will sell 40 *MILLION* 486 chips this
    year alone. The DX3 (or is it DX4, I can't keep track) version is running
    100 MHz. And Intel just announced faster Pentiums. The profit on
    those chips will more than cover investment into the next higher level
    of chip plant. Intel might have some challenges ahead as a result
    of PowerPC, but will be in business for some time to come. They own
    the embedded controller business, for instance. (Intel is making the 386 the
    standard embedded chip).
    
    							Jon

re: .80

Are these all CISC chips?  What happens when they have to change the
architecture such that existing binaries no longer work?

- paul

    Just heard a newscast focusing on DIGITAL.  Forrester Research's Colony
    said, _inter alia,_ that -- 
    
    * He'd be surprised if the BoD gives Palmer a full 24 months to execute
      his "get-well plan."  Results will be required sooner than that.
    
    * He believed that we could still pull it out.  "If you cut to the
      heart of DIGITAL, you will still find ENORMOUS enthusiasm and
      creativity.  Management's been controlling things too much.  If they
      could just get out of the way and let the creators create, let the
      inventors invent, and let the dreamers dream, we could still see
      great things coming out of DIGITAL.  That's what high technology is
      about."
    
Cheers,

Dan Kalikow, Consultant, IM&T Info. Delivery Utility (IDU) Group  DTN 223-3562
+=============================================================================+
| Phone: 508/493-3562  DRDAN::KALIKOW   Internet: dan.kalikow@mso.mts.dec.com |
| IDU: "To Protect and to Serve Information" - via the DIGITAL World-Wide Web |
| Hello, <a href="http://nrsta2.mso.dec.com/kalikow/business-card.html">Hyper |
| World!</a> DIGITAL and the Internet: Webalong together! | Internet:==Profit |
+=============================================================================+

RE: .81

	Yup, when P6 (or is it P7) comes out in '96 or so, it will, rumour
	has it, not be compatible with the x86 architecture, requiring
	lots of re-compiles!

							mike

    
    Re .82:
    
    How would I go about buying that man a beer?
    

    What we really need to do is something that the president of Boston
    University did while I was attending school there. He asked that every
    student (or their parents) take out a life insurance policy on said
    student and make B.U. the beneficiary. The cost to BU was nothing and
    BU had everything to gain, since statistically, a few students were
    bound to die over the course of a year. Of course, when you saw the BU
    Hit Squad coming down Commonwealth Ave., everyone ran for cover!

    
    Re: .85
    
    > What we really need to do is something that the president of Boston
    > University did while I was attending school there. He asked that every
    
    Was that the infamous John Silber?
    
    There was a character if I ever saw one.  By reputation Mr. Silber 
    made Ed Lucente look like a pussycat.
    
    Steve
    

    Yes, that was good ol' Silber. That guy sure is something else!

re: .0


>4. Stop projects that have no future. IMMEDIATELY. That's VMS development,
>DECnet Phase V, and any other product that does not have a steep upward ramp.
>Focus those people (from money-losing and downward-turning products) onto
>projects and products that have a possibility of high volume: port
>software to Windows-3.1 and Windows-NT, make RDB run on Windows-NT
>and put a Windows interface on it as good as Microsoft Access's, etc. etc.

I'll agree with DECnet/OSI (ie: Phase V) - most customers want TCP/IP 
now-a-days... we blew our opportunity by having Phase V take 2-3 years 
longer than it should have.

However .....
Someone mentioned OpenVMS still brings in over $3B/year  - true, but 
that's just the OS - if you add all the layered products, VAX systems, 
and other VMS-related products, you'd have well over 3 times that 
amount.. in other words, at this point in time, WITHOUT OpenVMS, we'd 
be closer to a $3B company ... and 10M users out in the real world 
would not be happy campers. Plus, OpenVMS licence sales were at an all 
time high last year.... what do you mean a "money-losing and downward-turning 
product" ?????

Secondly, the world has not accepted WNT, and may never accept it. 
Many customers I deal with believe MicroSoft does not have their act 
together behind NT, and view it as a temporary solution until Chicago 
is out. Jumping on the NT bandwagon may not be the best move for Digital.
Besides, do we really want to be tied into a 3rd party product that we 
have very little control over and make very little money from (other 
than the hardware and related product sales) ??

My feelings - pump up OpenVMS as what it really is - the best 
commercial OS available. Push the installed base into upgrading from 
VAX to AXP on OpenVMS. Advertise OpenVMS for mainframe downsizing. Use 
the expertise we have to sell what we know how to sell. OpenVMS is a 
great product with (potentially) a strong future if we'll only quit 
killing our own golden goose.... IBM did over $10B just in AS/400 
sales last quarter with that "proprietary" OS of theirs.... OpenVMS on 
Alpha blows the doors off what IBM offers on the AS/400. If we could 
only get 10% of that business, that's an incremental $4B/year !!! We 
can't get those kinds of numbers with WNT.

At the same time, focus just as much energy, expertise and advertising 
at OSF/1 to bring up from a $1B business to an $11B business. OSF/1 on 
Alpha is the best Unix environment available anywhere (price, 
performance, functionality, etc). All we're missing is the 3rd party 
application suite (due to our own lack of agressivness)... but that's 
changing.

Let's see, if OpenVMS did $10B+ a year (as it does now) and OSF/1 did
$10B+ a year, if we took away 10% of IBMs AS/400 business ($4B/year)
and all the other products contributed their $3-4B/year, we'd be a
$30B company.... what a concept..... 

By the way - all the numbers given in here are not "official", just 
what has been "heard on the street..." as Charlie Matco says. But they 
are close enough to real for this discussion.

Arlan

    Re -.1 
    Well, on the "long-shot" that WNT is commerically acceptable, I'd
    include it as one of our key OS platforms (I DO believe it will
    succeed, in a BIG way), it sounds like we should have a
    	- 3 Operating Systems Strategy -
    
    I'm sure someone else with more dtailed data than I will also comment,
    but I'm PRETTY certain that $3B represents the VMS SW and systems
    business (if we DID sell $3B of VMS licenses, I have to figure our
    total product sales would exceed the ~$7-$8B they now are).
    
    OpenVMS AXP is a SUPERB commercial OS, and my client believes that
    today, there really are only 2 commercial, robust, mission-critical-capable
    and they coincidentally (sp?) have the same 3 letters in their name.
    
    I KNOW some of the many "OS that ends in X" (except ours, of course)
    will disagree, but since this is the clients perception (which I happen
    to agree with perhaps through ignorance :-), it is correct.  And they
    JUST heard our friends at Oracle say much the same thing!

    A few back:
    
    Can't kill DECnet/OSI. OSI mandatory in most European bids. TCP/IP not
    as big there as it is here (so I've heard).
    
    However, some product "retirement" is necessary, is happening, but
    maybe not at the pace you'd like. DECpresent, DECalert sold, DEC Cobol
    Generator the same thing, so it's happening.
    
    Best and regards,
    Ruben

RE: .88

VMS a $3bn business? I don't think so, not unless it has positively
boomed over the last few years.
Think about it - We sell about 50/50 PRoducts and Services. That
gives you $7bn product revenue. $3bn would be 50% of our product 
revenues coming from 1 s/w product. 

If the $3bn figure is real, it must include h/w and service revenues.


VMS is our biggest single s/w product, by quite a stretch, but not
that much!

Mark

>
>VMS a $3bn business? I don't think so, not unless it has positively
>boomed over the last few years.

Again - it depends on what you lump into the "VMS" pot - if you 
include all products (hardware, SW, and services) which would not or 
could not be sold without the existance of OpenVMS (like compilers, 
ALL-IN-1, VAX, most AXPs, HSJ40s, Volume Shadowing, DECps Capacity
Planning Services, etc) then OpenVMS represents over 70% of Digital's
TOTAL revenue - not $3B, but closer to $10B !!!  In other words, if we
decided today to stop all OpenVMS related sales, we would only have
$3B/year of other stuff to sell....... 

    re:.88 etc.
    
    If 10% of IBM's AS/400 business were $4B, then the total AS/400
    business would be $40B.  Sorry, but that's more than a bit high. 
    AS/400 is alone bigger than Digital en toto, but not twice the size.
    
    This discussion reminds me of the old All-in-a-Trademark days, where
    the VP in charge created and managed a perception that his product was
    selling in the billions a year.  If one user on a VAXcluster touched
    it, then ALL of the cluster and peripherals and software were, of
    course, credited to him.
    
    By that classical DECarithmetic, we are probably a $100B company.
    
    Or are we using Hong Kong dollars now?

>    
>    If 10% of IBM's AS/400 business were $4B, then the total AS/400
>    business would be $40B.  Sorry, but that's more than a bit high. 
>    AS/400 is alone bigger than Digital en toto, but not twice the size.


You're right - I was looking at the AS/400 numbers as a quarterly 
number, not annual. So if they do $14B+/year in AS/400 biz, 10% of 
that is still an incremental $1.4B+.

According to a recent state of company report by our VP:

VMS is part of the Systems Business Unit which is losing half a
billion dollars a year.

Total annual revenues are down to $6 billion and declining at around
30% per quarter.

The rest of Digital simply cannot make up the difference.
Thus the huge losses.

If this is wrong, please correct me.  But if it's close to the truth,
how should we respond?

- Peter

   Last number I saw said there are about 500K VMS systems out there. 
   It would be kind of foolish to tell all those people that we're just
   going to dump VMS.

    to -2
    ...'Systems Business Unit...losing half a billion dollars per year.....
    
    
    Be careful with that. Depending on how costs are allocated, ANY
    business can be shown to be making/losing a lot of money. The SBU is
    currently burdened with a LOT of costs not directly related to its
    revenue.

Re: .88 

> ...the world has not accepted WNT, and may never accept it.
> Many customers I deal with believe MicroSoft does not have their act
> together behind NT, and view it as a temporary solution until Chicago
> is out. Jumping on the NT bandwagon may not be the best move for Digital.

Isn't Chicago just the code name for the next major release of the Microsoft 
Windows operating system?  

If I'm not mistaken, Chicago will still not have true multitasking.  For
the purposes of any system needing the horsepower of Alpha (or any of its
competitors), it seems to be pretty foolish to run an operating system with
limited multitasking.  NT (with its forthcoming Cairo release) seems to
be the path of choice for Windows applications in a power environment.  I'm
aware NT is a big resource hog, but resources are coming down in cost.

It appears to me that our choice of three Alpha bandwagons (Open VMS, OSF/1, 
NT) is appropriate.  I think we're doing the right thing in supporting our 
installed VMS base _and_ serving the Unix and Windows markets.

Does anybody think there's a better alternative out there?  Is there 
something we should be doing and are not?

    	The cost of resources is coming down. I supported VMS when the
    *maximum* memory for the system was 2 megabytes. It doesn't seem too
    long ago, but systems with 100 times that amount of memory seem fairly
    common now.
    
    	MS-DOS, and its successor Chicago are just a dead end, but with
    millions of 386 and 486 machines out there a very profitable dead end
    for Microsoft. In 5 years machines that can swallow the CPU and memory
    requirements of NT without even noticing will be common and as
    inexpensive as current  Intel based PCs.
    
    	Whether people will use such machines with VMS, a user-friendlied
    version of Unix, NT or its successor Cairo, or Novell Netware is
    another matter. All four will be available on AXP, and there may be
    other operating systems in the running too. The Intel architecture and
    therefore MS-DOS that is so dependant on it have passed their day.
    
    	Some of us remember the days when there were more machines running
    RT-11 than any other operating system in the world. In a few years you
    will be able to say that of MS-DOS and its succesors. (RT-11 had limited
    multi-tasking, and a wide range of application software, from gamma
    radiography to payroll for small businesses).

>       <<< Note 3006.95 by HANNAH::SICHEL "All things are connected." >>>
>                               -< Reality check >-

>According to a recent state of company report by our VP:

>VMS is part of the Systems Business Unit which is losing half a
>billion dollars a year.

    Note you say VMS is PART, but is VMS the part that's loosing money,
    or are there other overheads?
    
>Total annual revenues are down to $6 billion and declining at around
>30% per quarter.

>The rest of Digital simply cannot make up the difference.
>Thus the huge losses.

>If this is wrong, please correct me.  But if it's close to the truth,
>how should we respond?

>- Peter
    

re Note 3006.99 by PASTIS::MONAHAN:

>     	MS-DOS, and its successor Chicago are just a dead end, but with
>     millions of 386 and 486 machines out there a very profitable dead end
>     for Microsoft. In 5 years machines that can swallow the CPU and memory
>     requirements of NT without even noticing will be common and as
>     inexpensive as current  Intel based PCs.

        Chicago is hardly a dead-end.  In fact it is an evolution
        path for those tens (hundreds?) of millions of users towards
        the same point to which NT itself is evolving.

        Bob

Nobody has pointed out yet that Chicago will ONLY run on Intel architecture
machines. NT runs on Intel, Alpha, and MIPS machines.

Also note that Chicago does not run on MSDOS - it is an entire OS.

I'd guess an eventual merger between the MSDOS line and NT in the future.

I also agree that in 5 years, MSDOS will be obsolete and replaced, BUT there
will be a LOT of MSDOS/Windows applications running on its replacement, just as
PDP-11 compatibility mode was important on VAX/VMS for many years.
(Actually, in that respect, NT is a lot like VMS V1. Many applications are
Windows 3.1 apps running on NT. I'd love to be able to run Word 6.0 on Alpha
native code instead of emulation.

...why we seem to be the only company that can realistically have more
than one operating system?  I mean we get dinged for not having a strategy
for OSF/1 because we still tout OpenVMS, then we try to kill OpenVMS to
prove that we are commited to Unix.  Now we are dinging MicroSoft!

Why can't MicroSoft realistically provide two operating systems for two
different markets?  WNT and DOS address two different market spaces and
for some reason this fact seems to confuse almost everybody.  Which one
will win?  What, is there an inherent competition whenever there is more
than one product?  Why doesn't Ford Motors or General Motors care about
the inherent competition from multiple products?

I'm glad .95 has sparked some thought.

>   Last number I saw said there are about 500K VMS systems out there. 
>   It would be kind of foolish to tell all those people that we're just
>   going to dump VMS.

Very true.  But it's also foolish to continue business as usual when
it's clearly not sustainable.  Putting ourselves out of business won't
help these VMS customers.


>    ...'Systems Business Unit...losing half a billion dollars per year.....
>    
>    Be careful with that. Depending on how costs are allocated, ANY
>    business can be shown to be making/losing a lot of money. The SBU is
>    currently burdened with a LOT of costs not directly related to its
>    revenue.

I'm not an expert on how overhead costs are allocated, but this isn't
the point.  To help manage ourselves, we've organized the company 
as a small collection of business units with P&L responsibility
for the design, manufacture, sale, distribution, and support of related
products.  How else can we possibly get useful insight into what's working
and what isn't?  If a business unit is losing $0.5B/year, something isn't
working.  What is the plan for how this unit will recover?  What can
we do to help?

>    Note you say VMS is PART, but is VMS the part that's loosing money,
>    or are there other overheads?

That's part of my question.
How do we address what's working and what isn't?

  Hope the people responsible are doing the right thing?
  Probe the environment to learn and communicate what is needed?

- Peter

    re: .103
>...why we seem to be the only company that can realistically have more
>than one operating system?  I mean we get dinged for not having a strategy
>for OSF/1 because we still tout OpenVMS, then we try to kill OpenVMS to
>prove that we are commited to Unix.  Now we are dinging MicroSoft!
    
    	Most companies that are seriously into operating system work, as
    opposed to just porting Unix to their latest whiz bang hardware have
    more than one operating system. Novell has Netware and Unix. IBM has
    OS/2 and MVS. Even Sun has SUN-OS and Solaris that from most reports
    are so incompatible that you would hardly believe they were both based
    on Unix.
    
    	And nobody likes to have more than one operating system because it
    doubles your costs without a certain doubling of revenue. In the early
    days of VAX when we had product lines oriented on specific market
    segments, the business product line wanted to develop their own
    operating system for VAX, saying that VMS didn't really address the
    needs of the commercial market, but I heard that Ken stamped on that
    idea fairly firmly.

Re: .103

Novell has Novell DOS, NetWare, UnixWare...

IBM has PC-DOS (IBM DOS), OS/2, MVS, OS/400, AIX, Workplace O/S or Taligent
or whatever coming, etc...

Sun has SunOS, Solaris, Interactive UNIX, at least, and maybe Windows NT
coming for SPARC someday, and who knows whatever else...

HP has HP-UX, MPE (or whatever it was), Windows NT (coming for the bi-endian
HP-PA), PIN (Processor Independent NetWare)...


...petri

    re: since .103
    
    exactly!  Now why in the blue blazes is there so much confusion over
    Windows NT and DOS?  Can you get it to sink in that perhaps (oh just
    maybe) MicroSoft has a dual operating system strategy?  DUH-H-H-???
    
    CW

Re: .108

Microsoft has three operating systems: DOS, Windows and Windows NT.

However, their goals look relatively straightforward to me:

    Get rid of DOS as fast as the market can accept it in favour
    of Windows*
    
    Windows* can be what we know to day as Windows 3.1, Windows 3.11
    or Windows for Workgroups 3.11.
    
    And later on all three above will be known as Windows 4 or whatever
    (this is the so called "Chicago" release of Windows).
    
    Or you can opt for Windows NT or Windows NT Advanced Server instead.
    
    For developers Microsoft's direction is towards a single, unified
    application programming interface: Win32
    
    If Microsoft can persuade one to opt for Windows, they don't really
    care whether it is Windows OT (Old Technology), or Windows NT (New
    Technology), as long as it is Windows; they win in both cases.
    
    And if Microsoft can persuade developers to opt for Win32, they 
    don't really have to care whether the users use Windows OT or 
    Windows NT, as long as it is Windows; they win in both cases
    
    Especially if Windows NT is Windows NT on Intel, since then
    the developers won't have to recompile their Win32 applications
    for Alpha AXP, MIPS, PowerPC or whatever RISC platforms. 
    
    And if the developers do want their Win32 apps on Alpha AXP, MIPS, 
    PowerPC, etc., all it takes (even in practice ;-) is a recompile
    for the platform in question.
    
In essence, Microsoft's goals can probably be summarized as:

    For users: Windows everywhere
    
    For developers: Win32

    
...petri

    Re: .109
    
    >Microsoft has three operating systems: DOS, Windows and Windows NT.
                                                 ~~~~~~~
    
    I hate to be nit-picky but (why should that stop me? ;-)
    
    Windows 3.x is not an OS - it relies on DOS being underneath it.

re Note 3006.110 by COMET::CASCIO:

>                  -< Windows 3.x is an 'operating environment' >-
> 
>     Re: .109
>     
>     >Microsoft has three operating systems: DOS, Windows and Windows NT.
>                                                  ~~~~~~~
>     
>     I hate to be nit-picky but (why should that stop me? ;-)
>     
>     Windows 3.x is not an OS - it relies on DOS being underneath it.

        You are being picky -- the Windows 3.1 box says "operating
        system".

        Actually the tree OSs are:
        	Windows NT
        	Windows plus DOS
        	DOS (alone)

        but the point (made above) is that Microsoft is killing one,
        and the other two are migrating towards common programming
        environment and user interface.  They just might be one OS in
        five years or so.

        That is a very different situation from VMS, OSF/1, and
        Windows NT.

        Bob

    	Maybe we should do the same. Common programming interface (POSIX)
    whether it is VMS, OSF/1 or Windows/NT. We are probably stuck with 3
    user interfaces (command line, Xwindows and Windows) for the forseeable
    future.
    
    	For everything else the questions should be the same as for
    comparing the Microsoft systems - performance, availability, security,
    is the application you need currently ported, ...

           I hear Chicago's biggest bug is that it has this Loop...
    
    (sorry)
    

    re .114:
    yes, but the Alpha can execute an infinite loop in 17 seconds...

    How can something complete anything that in infinite? Please excuse my
    ignorance butttt.....

    Re .116. As Yosemite Sam would say.... It's a joke son, a joke! ;-)

    Harry

Re: .117

I think you mean Foghorn Leghorn.

    If it was to be humorus please add funny face....becaues as you can
    tell I become confused easily:').

    re .116: Sorry, forgot the :-)  :-)  :-)  :-)  :-)  :-)  :-)  :-)  :-) 

    re: .116   A PDP-8 would complete an infinite loop (jump self
    instruction) in about 4 hours. That was the time it took for the memory
    cores in that location to warm up enough from hysteresis loss to drop
    bits. ;-)   I think that makes an AXP about 1000 times faster than a
    PDP-8.

    Yup.. RISC technology has come a long way since the PDP-8...

    Ok guys, this talk of completing infinity in 17 seconds is just
    wild handwaving until we've settled on which infinity cardinality
    we're talking about...
    
    [For the humor impaired: this is also a joke for the mathematically
    inclined. See: :-) :-) :-)]
    
    For those who slept through Mathematical Logic 101:
    
    The natural numbers have cardinatlity 1.
    The real numbers have cardinality 2.
    The power set of the real numbers have cardinality 3.
    The power set of the power set of the real numbers has
    cardinality 4.
    
    And just to help spin this thread furthur out of control we
    could always bring up the axiom of an infinity between that of
    the natural and real numbers...
    
    And so to end up on one of mankind's pressing questions: if the
    alpha can do a cardinality 1 infinite loop in 17 seconds how
    long does it take for a cardinality 2 infinity?
    
    [Finally, if you want a true explanation of this reply: I haven't
    had any coffee this morning]
    
    roelof

   I think that 17 seconds is on the older chips.  I believe the new
   chips perform it in about 11 seconds.

    >I believe the new chips perfrom it in about 11 seconds
    
    That's only because seconds are shorter on the new chips!
    ;-)
    
    -Dermot

    >I believe the new chips perfrom it in about 11 seconds
    
    That's only because seconds are shorter on the new chips!
    ;-)
    
   NO! NO! NO!
    It's because the seconds are LONGER! (17/11 times to be precise).
    
    And the reason is obvious too...the electrons on these 275Mhz
    babies have to hustle their butts a lot faster to get where
    they're going before the next clock cycle comes banging around.
    
    Faster means closer to the speed of light where we all know that
    time slows down close to the speed of light (relativity theory
    and all that).
    
    Glad to have been of help :-) :-)
    
    [Whadya mean what grade did i get in physics and electronics???]

    
    
    
    I hate to be a mathematical nitpicker (actually I love too ;-), but
    .121 isn't quite accurate:
>    
>    [For the humor impaired: this is also a joke for the mathematically
>    inclined. See: :-) :-) :-)]
>    
>    For those who slept through Mathematical Logic 101:
>    
>    The natural numbers have cardinatlity 1.
>    The real numbers have cardinality 2.
>    The power set of the real numbers have cardinality 3.
>    The power set of the power set of the real numbers has
>    cardinality 4.
>
    The real numbers have cardinality larger then the natual numbers.
    There's a conjecture in mathematics call "Cantor's conjecture" or the
    "Continum Hypothese" that there are no cardinalities between these two.
    This has been generalized to something called the "General Continum
    Hypothese" (abbrevated GCH), that there are now cardinalities between the
    cardinality of a infinite set and the cardinality of it's power set.
    Unfortunely, it has been shown that you can't prove or disprove GCH
    within the Zermello-Frankel axioms of set theory (Goedel proved you
    can't prove it, Cohen proved you can't disprove it in 1965). Thus,
    whether the universe obeys GCH is ultimately a question outside of
    mathematics - sort of like whether the geometry of the universe obeys
    Euclid's fifth postulate (Riemann geometry and Einsteins General theory
    of relativity explained how it didn't). 
    
    So... Maybe you could use experimental numbers from the Alpha tests to
    settle this question? :-) :-) :-)
    
    								Joe C.

    
>    I hate to be a mathematical nitpicker (actually I love too ;-), but
>    .121 isn't quite accurate:
    
I stand (actually sit :-) corrected...
    
>    Thus,
>    whether the universe obeys GCH is ultimately a question outside of
>    mathematics - sort of like whether the geometry of the universe obeys
>    Euclid's fifth postulate (Riemann geometry and Einsteins General theory
>    of relativity explained how it didn't). 
    
>    So... Maybe you could use experimental numbers from the Alpha tests to
>    settle this question? :-) :-) :-)

    Ahhh! So this is The Famous Alpha Postulate!
    
    Actually, come to think of it, you might not even get to GCH since
    it is also up for grabs whether the universe can obey (model) your very
    first completed infinity (and you need at least 2 to tango with
    the GCH :-).
    
    Being Dutch AND a computer scientist you've got to realise that
    I'm a Brouwer man! [Constructivist, for you souls of ignorance :-)
    and we constructivists don't believe in completed infinities - fun
    though they are :-)
    
    Of course, this thread should really be taking place in the Alpha notes
    file :-) :-) :-)
                    

    Wow. This is almost as hard to follow as our product strategy.
    
    ...tom

    re: .129
    
    ... or the Employee Organization note...

        
    I hate to be a spelling nitpicker (actually I love too ;-), but
    .127 isn't quite accurate:
>   
>
>   This has been generalized to something called the "General Continum
>   Hypothese" (abbrevated GCH), that there are now cardinalities between the
>
    It's General Continuum Hypothesis.
    (Don't have any problem with the acronym though :-)

>    I hate to be a spelling nitpicker (actually I love too ;-), but
>   .127 isn't quite accurate:

People who live in glass houses should exercise caution in the throwing of
stones - unless you really did intend to comment on your "extracurricular"
activities (in which case, your grammar could use some work ;^).

Re: .129

-This IS our product strategy ...(-;

-Terry

    What to do, given losses?  For the first time in a long time I am
    optimistic. Reading today's Vogon News' lead article, "Separately, Palmer 
    yesterday told an annual convention of Digital product users the company 
    planned new programs to make it easier to do business with Digital."
    After that Palmer is quoted as saying,  "You know, it's almost
    embarrassing for a technology company like Digital to have to admit the 
    need to re-engineer the very process and technology that support the 
    process and technology needs of our customers."
    That took some guts!  This makes me think that something is going to
    get fixed because it makes me think that someone has finally begun to
    see that there is a problem.  The solution to any problem begins with
    acknowledgement that the problem exists.  My hat's off to Mr. Palmer! 

    I agree with .134 -- it is GOOD NEWS to hear Bob Palmer acknowledge
    this problem, because that means that he's going to try to fix it.
    Whether the fix is fast or (more likely) slow, his awareness of it
    means that we'll be making progress in the right direction.
    
    Referring to the "Goodby DIGITAL notes" string, I think most of the
    people who say or imply that the SLT is clueless are really reacting
    against their perception that the SLT is not aware of the tough 
    problems that they have to cope with every day.  
    
    As I said there, I'm not bothered by knowing that there are problems.
    I get bothered when I think that the people in charge of fixing a
    problem don't know (or won't admit) that it exists.  I'm glad that's 
    not true for this one.  
    
    		Enjoy,
    		Larry

    
     Hey,
    
       So what if someone acknowledges the processess do not work, or need
    to be re-engineered. Process CHANGE, methods applied once upon a time
    need to be re-engineered. There should be no embarrassment on the part
    of us to admit to fixing business practices. Now granted we as a
    company are hard to do business with, but we should not bow our heads
    because things are broke. We should bow our heads because we as a
    technology company refuse to acknowledge that they are broke.
    EVERYTHING is FIXABLE, so is Digital. 
    
     Just FIX it.
    
    -Mike Z.

    
    Reposted/was .135
    
    
    The problem is (and this is not being directed at the current SLT or
    Mr. Palmer) that the people doing the work and using the systems have
    been crowing about this for years.  It is good to see Bob acknowledge
    the problem publically.
    
    Mike

	We have many good consultants doing buisness re-enginerering for our
customers. Why dont we "hire" these people to re-engineer Digital, instead of
letting the people who have no experience (SLT, VPs, Managers etc.) do it.

;^) Not so tongue in cheek!

    	Why don't we "hire" these people?
    
    	Simple answer. Nobody in Digital has ever had any responsibility
    for selling to our largest customer - DEC. I have mentioned it before
    in this notes file, but many years ago I knew a DEC payroll manager
    with a deadline who eventually *had* to buy an IBM system because he
    couldn't locate anyone in Digital who could and would configure a system
    for him. The local office sales staff were too busy competing with IBM
    in other companies.
    
    	It may seem silly, but this company has many products and skills
    that we sell to external customers, but are unknown to the majority of
    DEC employees, so they don't even think of turning to DEC as a
    supplier. And if you think doing business with Digital is difficult as 
    an external customer you should try it as an internal customer. A
    consultant could be pulled off your project at a moment's notice if an
    external customer comes along; your hardware orders are always shuffled
    to the end of the queue, and that is after you have managed to locate
    the product or service that you need. It is much easier to go to an
    external supplier where you can ask for a contract with penalty clauses
    if you have a deadline.
    
    	And it works the other way too. I suspect that in many cases we are
    using software that is not the best on the market (thereby making us
    less efficient) solely because it has no licence cost internally. The
    flip side of this is that the engineering group that develops it gets
    no revenue from internal users and so has less funding to make it best
    in the market.
    
    	I have been arguing for years with people that had no influence ;-)
    that Digital should find a way to treat DEC as an *EQUAL* customer to
    any other in the Fortune 500. If we did, you would see Digital salesmen
    bombarding the DEC company president with offers to re-engineer his
    company.

    A quote from Mr. Lincoln (Lincoln Electronics Inc), "Managers should
    learn to work and workers should learn to manage".

    >>> I suspect that in many cases we are using software that is not the
    >>> best on the market (thereby making us less efficient)
    
    	Misusing your Quote a little - You will (in Sales at least) be
    getting POINT - an external PC based system.
    
    	POINT really does seem to be en excellent way of showing up your
    "bit" quoted above.  It is user unfriendly, it is unreliable and it is
    being brought in as the main on-line sales system Corporate-wide for
    DECdirect at least.
    
    	The changes to POINT that we have requested have been ignored to
    all intents and purposes!  The whole business is being based on
    this!!!!
    
    				Malcolm.

    Remember Alphaman, well I think we (Digital) should have a series
    of TV commercials created around him.  Something like a comic strip
    series giving a little more info with each new ad.  The Nescafe
    series seems to have done real well for them.
    
    I took an Alphaman tape home one night and my whole family watched it 
    and thought it was great, even though they didn't understand alot
    of what was said.
    
    that's my .02 worth,
    
    
    Robin
    

    I, too, thought AlphaMan (or was that ALPHAman or ALPHAMaxpn) was
    masterful -- entertaining and competitive.  Part of the appeal of the
    only tape *I* saw was that it was shot around some of the funkiest
    parts of the Mill, so that would have to be worked around:-( but yet it
    COULD be done.  I hope that the group responsible for that bit of
    genius is given another shot to influence at least part of our future
    video advertising strategy.  
    
    I'd like to see that AlphaMan video converted into an .AVI file and
    made available on our WWW Server!
    

	The best part of that whole internal use only video day was
	Enrico Pesatori taking you on a tour of an Alpha system. Many
	folks, myself included, said "Get this guy on TV!!"

	Sadly, DEC has it's head up its arse when it comes to marketing.
	

	No, forget sad. It's pathetic how we have blown our lead with
	Alpha. When the vultures are picking thru the scraps in 2 years,
	it will be apparent to the rest of the world how we blew it.
	(p.s. The vultures have finished with Wang and are circling DEC)

						mike

>  What We Need To Do, given losses...   

1.  STOP WORK ON ALL over-complicated multi-year internal projects that 
    were supposed to solve Digital's internal business problems, yet have 
    delivered nothing.

2.  Then see personal name.  Period.

-Vin