Conference heron::euro_swas_ai

184.0. "Olsen memo" by HERON::ROACH (TANSTAAFL !) Sat Mar 03 1990 16:55

Printed by: Pat Roach                                    Document Number: 010701
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                  I N T E R O F F I C E   M E M O R A N D U M

                                        Date:     03-Mar-1990 04:52pm CET
                                        From:     Pat Roach
                                                  ROACH
                                        Dept:     E/ACT Technology
                                        Tel No:   DTN 828-5784

TO:  Pat Roach                            ( ROACH )


Subject: Olsen memo


                  I N T E R O F F I C E   M E M O R A N D U M

                                        Date:     03-Mar-1990 04:52pm CET
                                        From:     ORCIUCH.ED AT ALGOA1 at VALMTS at VBO
                                        Dept:     VB EAITG/MIS
                                        Tel No:   DTN: 828-5082

TO: See Below

Subject: KO Article - AI Connection



Its interesting to note that AI played an important role in 2 of the
3 contracts Ken is talking about.  For Aetna, AI was the lever that
opened the door in the first place, and for Boeing, AI is a major component
of the contract itself.

	- Ed

Distribution:
 
<all distributions deleted>


                  I N T E R O F F I C E   M E M O R A N D U M

                                        Date:     01-Mar-1990 02:30pm CET
                                        From:     DAVID DUANE @NRO
                                                  DUANE.DAVID AT AO2 AT NROMTS AT NRO
                                        Dept:     ESG-DIS
                                        Tel No:   234-5039

TO: See Below

Subject: Ken Olsen Interview with New England Business magasine

============================================================================
SUBJECT:  ADVANCE/New England Businesss magazine reports on Digital
          Equipment Corp.
SOURCE:   Business Wire via First! (TM) of INDIVIDUAL, Inc.
DATE:     02-22-90
----------------------------------------------------------------------------
 
    (ADVANCE) BOSTON--(BUSINESS WIRE)--The long-standing policy of ``no
layoffs'' at Digital Equipment Corp. of Maynard, Mass., has dwindled to one
of ``hope,'' according to the company's president and founder, Kenneth H.
Olsen.
 
    In exclusive interviews with New England Business magazine, Olsen
reveals in the magazine's March issue that he ``hopes'' the policy will be
maintained.  The operative work ``hope'' came in a February follow-up to an
earlier interview in December, when Olsen said he would not lay off
thousands of employees just to satisfy Wall Street analysts.
 
    On Wednesday, February 21, Digital said that it was considering a
 
voluntary severance program to reduce its work force by as much as 8,000.
The announcement came in the wake of revelations by Olsen that he would not
rule out a loss for the quarter ending March 31, the first in the company's
32 years as a public corporation.
 
    Olsen also sidestepped questions as to his successor, evoking his
Darwinian formula of piling ``more and more [on candidates] to see who can
take on the most successfully.'' In October, Digital's number two man, John
J. Shields, resigned, and in January became president of Prime Computer,
Inc. of Natick, Mass.  At 64, Olsen said he is ``young and healthy.''
 
    In a wide-ranging interview, Olsen outlined his strategy for guiding
Digital through the 1990s, specifying that ``we have entered the age of
integrated corporation-wide computing,'' and that Digital's 14-year
investment in VAX networking makes it a formidable alternative to their only
major competitor in this market, International Business Machines (IBM).
Digital's future, he told the magazine, lies in making ``big system
networks''-- integrated hardware and software business solutions that will
tie together a corporation's scattered empire.
 
    Digital has three contracts, Olsen said, which exemplify this strategy.
Boeing Co. signed Digital on as prime contractor for a computer-integrated
manufacturing project involving Digital hardware, plus consulting, systems
integration, service and support.  It is worth ``multiple millions,'' he
said.
 
    A second, with Eastman Kodak, provides that Digital will manage the
Rochester, NY, company's telecommunications worldwide.  Sources estimate the
deal at $30 million, reports the magazine.  A third, with Hartford, Conn.'s
Aetna Life & Casualty Co., has Digital building a network to hook together
1,000 MacIntosh computers at 72 branch locations using Digital's MicroVaxes
and VAX 3400s to do the job.
 
    One glitch in Digital's long-term network plan, says the magazine, is
Unix, a software operating system developed by rival AT&T that is rapidly
gaining adherents in the computer market.  Olsen says that Unix is his top
priority for research spending in 1990.  The company's long-term strategy,
he told New England Business, is to mesh VMS, the software for Digital's VAX
computers, with Unix.
 
    The magazine story makes it clear, however, that Olsen regards Unix as a
``false god,'' and ``absolutely not an open system.''  An ``open system''
represents the dream that the same software will run on all sorts of
machines with little modification.  Olsen criticizes the press for
``absolute blind faith in Unix, without ever questioning the fact that
AT&T's got them by the neck.''  AT&T, he told the magazine, once admitted
they created Unix ``to become a monopoly.''
 
    One analyst, George Weiss of the Gartner Group, a Stamford, Conn.,
market research firm, feels that Digital will have problems balancing its
commitment to its VAX installed base with its new Unix-style technology.
 
    Other analysts, according to the story, cautiously note that some
customers may opt for IBM's networking style, or that the market may go for
home-grown or off-the-shelf networks incorporating mid-size Unix-based
machines that are less costly than Digital's proprietary products.
Moreover, these analysts add, Digital has made many conceptual promises, but
the truth will emerge only when it starts to deliver on these promises,
beginning with its long-delayed VAX 9000 mainframe.
 
    ``We'll concentrate on the things that match our size,'' Olsen told the
magazine, concluding with a smile: ``When we were small, we did things small
companies would do.''  Digital's 1989 sales were $12.7 billion.  The company
employs 44,000 workers in New England, 125,000 people worldwide.
 
    New England Business is a regional magazine published in Boston.
    (End of advance for release 8 a.m. Feb. 23)
 
     [02-22-90 at 13:30 EST, Business Wire, File: b0222132.900]