Conference 7.286::digital

    re. last:
    
>        I have one question.  If personal computers and networking them
>    is what the market is now demanding, why isn't DEC placing tremendous
>    emphasis on developing personal computers, network and software
>    products?  
    
    Who says we aren't?
    
    Mark.

    If 534.0 interests you, you should be reading and/or participating in
    the MARKETING conference on ASIMOV which has discussed just this topic
    for 3 or 4 years.  Indeed, this article got notice there last Friday. 
    If you want to sustain the discussion in two conferences, that's ok
    with me.

    Yes DEC is working on network products to allow different vendors
    products talk to VAXes.  And yes DEC is placing a great emphasis
    on pc networks.  But they are other vendors pc's.  Right?  Such
    as the MacIntosh.  Its a wise move considering that roughly 40%
    of the VAX customer sites also have MacIntoshes and would very much
    like to smoothly network their Mac's to the VAX.  But what about
    some machines that say Digital on the side?  Why aren't they being
    pushed harder into the marketplace.  Or why aren't newer models
    being brought to market?  When was the last time you went to
    Businessland and saw a VAXmate on display?
    
    Bryan
    

    Although we have come out with PC's in the past I don't think we
    ever really knew how to market them... By getting together with
    Apple was a good move... Alot of the Fortune 500 people never forgot
    that Ken said he doesn't want the personal market.. We can't forget
    that alot of these high level types have the same computer at home
    as the one on their desk at work...
    
    Joe
    
    [with my //GS at home]
    

  There seems to be an implict assumption floating around here 
  that "PC" means Intel 80x86 architecture.  *I* think it means 
  "Personal Computer".  I've got one of those and its got a 
  Mega-pixel color display, 16 MBytes of MOS memory, about a
  half a gigabyte of disk, and access to the Easynet.  It's
  also got a VAX-architecture processor.  Ya know what I mean?

  The only thing wrong with my personal computer is that the 
  particular model I'm driving as a bit pricey, but the declining
  costs of the low-end VAXen along with the holding-steady or rising
  cost of *CAPABLE* PCs should soon cause cross-over of the trend-
  lines.  Then, everyone's Personal Computer can justifiably be a
  VAX-Architecture computer.

  And I think we haven't gone back one iota on Ken's comments on 
  stand-alone PCs.  They're practically useless here in the 
  networked future.  If sneakernet isn't dead, it will be soon.

                                   Atlant

    
    re .5;
    
    Amen!
    

    Coming out with an unexpandable, monochrome, CGA, sort-of-compatible,
    nightmare-for-field-service, $6000 oven (albeit networked) didn't
    help the customer's view of DEC's PC commitment.  Our sales force
    has been bidding AST AT clones on contracts simply because the VAXmate
    is inadequate.
    
    _KB

    MARKETING NEWSLETTER                                   MAY 9, 1988
    
    
                          WHAT NEXT FOR DIGITAL?
               [Authors : Edmund H. Muth and Monica Walker]
    
    
    Introduction:
    
    The cover story of the 5/16/88 issue of Business Week asks "What 
    Next for Digital?".   This article is not wholly negative but it 
    is certainly less than wholly positive.  The purpose of this 
    newsletter is to suggest some issues you may want to have in mind 
    if a customer, prospect, or consultant wants to discuss this 
    article with you.
    
    If you go through the article and look just at the section 
    headings, the following are highlights:
    
         o    "DEC has cooled off ..."
         
         o    "Behind the times ?"
         
         o    "'Snake Oil'"
         
         o    "UNIX abounding"
         
    The article does have some positive things to say; it notes our 
    successes in new industries (financial services, retail), the 
    improvement in performance/price ratio with the VAX 62XX family, 
    the importance of our excellent implementation of 
    multi-processing, our success in worksystems, and the unequaled 
    connectivity and compatibility of VAX systems.
    
    Nonetheless, the basic themes of the article are as follows:
    
         o    PC's are an important part of the market and something 
              at which a "full service" computer company must be 
              successful; Digital has failed in the PC market and 
              therefore cannot be considered fully successful
         
         o    Everyone is going to RISC and UNIX; our VAX/VMS strategy 
              is neither RISC nor UNIX and, thus, at question for the 
              long haul
         
         o    The industry is catching up to Digital in connectivity 
              and/or getting ahead of Digital in areas like 
              performance/price metrics
         
    Articles like this may shake consumer confidence by raising doubts 
    (in my view unfounded) about Digital's competitiveness.
      
    We all need to remember that DIGITAL has enjoyed its share -- 
    perhaps more than its share -- of positive press over the last two 
    years.   We would be unrealistic, indeed, if we established 
    "unqualified praise" as the benchmark against which we compare 
    each incremental article.  Handling mixed press is something we 
    have to do for a living as part of account management.  You should 
    read the article in its entirety and be prepared to discuss it 
    non-defensively, if the subject comes up.
    
    
    
    As I see it:
    
    This article misses more issues than it hits.  In fact, it sounds 
    to me as if it was written (or at least the authors' conclusions 
    formed) before we announced the VAX 88XX and 62XX families of 
    processors (which dramatically improve our position in commercial 
    data processing workloads and improve performance/price ratios).  
    While multiprocessing and the new VAX systems are mentioned, their 
    impact on our long-term profitability, commercial capabilities, 
    and competitive positioning seem poorly understood -- or at least 
    under-appreciated -- by the authors.
    
    The article is peculiar from another point of view, as well.   As 
    a business article, not a technical analysis, it is odd that the 
    focus is so light on the business issues a firm might value in 
    selecting a computing partner -- such as cost of ownership, 
    availability of software, world-wide service, application 
    development speed, strength of partners, positioning on 
    international standards, investment protection, and quality.  
    Instead, the article tries to discuss technology issues like RISC 
    technology.
     
    In my experience, thoughtful business people do not care whether a 
    computer company uses RISC (reduced instruction set computer) or 
    CISC (complex instruction set computer) technology.  If a vendor 
    can achieve superior price/performance, reliability, or investment 
    protection through RISC, then RISC has business value; if not, a 
    business person should not (and usually does not) care.  This is 
    definitely not the tone of the Business Week article, however.
    
    I'd suggest the following might be a more objective world view:
    
         o    By any objective measure, we are winning not losing:
         
                   -    We are winning in the mid-range against all 
                        vendors, especially IBM.  
                   
                   -    We are winning in worksystems with the very 
                        real prospect of passing Sun Microsystems 
                        within the next 18 months (having already 
                        passed #2 Apollo).  
                   
                   -    We are the #1 UNIX vendor in the industry, 
                        obtaining over $1 billion in revenues from 
                        this market.
                   
                   -    Our revenues are up 17% year-to-date, gated 
                        not by demand for our product but rather by 
                        our inability to manufacture and ship enough 
                        of our hottest products (like workstations and 
                        uVAX 3500's).  
                   
                        Analysts still expect us to be up 20-21% in 
                        revenues for the year, with record profits.  
                        
         o    In terms of CPU performance/price ratios, we are not the 
              lowest priced machine in the industry.  By any objective 
              and complete analysis, however, we are a good value.  
              "Good value" can be defined as inexpensive relative to 
              IBM but somewhat more expensive than some other 
              companies.  Let's remember than many of these "other" 
              vendors may not be in the business ten years from now, 
              in part because they have pricing models which assure 
              inadequate research and development spending.
         
              If we had a performance/price ratio problem, the uVAX 
              3XXX, the VAX 62XX family, the repriced 8550, and the 
              repriced RA-82/SA-482/RD-54 solve that "problem". 
    
    Its not credible to your customers to criticize the article; that 
    would appear defensive, not analytical.
    
    Focus your attention (and theirs) instead on any or all of the 
    following -- the issues that really affect business people and 
    business advantage :
    
                   -    industry expertise, 
                   -    cost of ownership, 
                   -    availability of software and solutions, 
                   -    world-wide service, 
                   -    application development speed (C.A.S.E.),
                   -    strength/diversity/quality of ISV's, 
                   -    leadership in standards and networking, 
                   -    product compatibility, 
                   -    architectural and product stability, 
                   -    technological superiority through massive 
                        ($100M/month) R&D spending and control over 
                        key technologies (disk, chip)
                   -    investment protection, 
                   -    hardware/software/people quality, 
                   -    distributed style of computing.
                   
    
    GOOD SELLING !!!

  I think it's startling to read the latest Forbes 500 lists in the 
  context of looking for where our traditional "competition" is to 
  be found compared to Digital.  With the exception of Hewlett-Pack-
  ard, our traditional competition is either nowhere to be found or
  way down on the list.

  And the magic IBM/DEC ratios are starting to look a lot closer
  to 1:1 than a lot of us had dreamed possible in years gone past.  
  Sales is about 5:1.  Unfortunately, profitablity was (I think) 
  more like 8:1.

  This bodes well for the "Still around later" sort of argument.  
  Next time someone is running down the VAX Architecture because 
  it's getting into its teens, point to the venerable /360 archi-
  tecture which (with major enhancements) survives to this day.

  Another point that may be worth investigating is our (and IBM's!)
  commitment to the Open Software Foundation.  (Apparently, this 
  was not public knowledge at the time the BW article was prepared.)
  Unix may or may not turn it to be snakeoil, but it may also turn
  out to be superfluous.

                                   Atlant