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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

1977.0. "Baby Blues?" by BOOKS::HAMILTON (All models are false; some are useful - Dr. G. Box) Fri Jul 10 1992 09:38

From the current Fortune magazine (reprinted w/o permission):

Article: Breaking up IBM


               The Brand New Baby Blues
               ------------------------

Name:                     Rev.($B)       Profit($B)      Comment
=================================================================
Enterprise Systems        22               1.94        Mainframes
ADSTAR                    11.9              .87        Storage dvcs.
Personal Systems          11.5              .04        PCs, W/S (RS6000)
Application Bus. Sys      11.4              .95        Minis
Programming Systems        2.8               ?         Software
Pennant Systems            2.1              .03        Printers
Application Systems        2.2               ?         Sftwre/Svcs
Technology Products         ?                ?         Chips/packaging
Networking Systems          ?                ?         Info. Mgmt

  MARKETING AND SERVICES**

IBM Europe/Middle East/
Africa                     26.1              1.26       Markets IBM Products
                                                       in Geographies noted
IBM North America          24.4             (2.39)     Markets IBM products
IBM Asia Pacific            9.3               .45      Markets to PACRIM
IBM Latin America           5.0               .20      Markets to Latin Am.

** These rev and profit numbers overlap with the MFG businesses above.

[end excerpt]
______________________________________________________________________________

Good article.  Akers is talking about actually selling stock in these
companies, possibly by mid-decade.  Apparently, he intends to keep
the sales force monolithic, though, and so there was discussion about
whether this is serious unless he breaks up sales as well.  I recommend
reading the article; it has interesting things to say about the 
no-layoff policy (and whether it will apply to the "Baby Blues"), the
culture of complacency, etc.

Implications for the industry?  Comments?


Glenn
T.RTitleUserPersonal
Name
DateLines
1977.1Which Fortune?SOLVIT::DESMARAISFri Jul 10 1992 11:011
    Which Fortune? Date Page?     thanks.
1977.2Jul '92BOOKS::HAMILTONAll models are false; some are useful - Dr. G. BoxFri Jul 10 1992 11:095
    re .1
    
    Cover story, July 27, 1992 edition.
    
    
1977.3Thanks..SOLVIT::DESMARAISFri Jul 10 1992 11:141
    Thanks I was looking in the July 13th issue..
1977.4DEC Descendants?JANET::LORDJanet @OFO, 274-6327Fri Jul 10 1992 15:526
    I can only speculate that "we're next..."  DEC has, it seems,
    has often emulated IBM with these kinds of moves.
    
    Might be fun!
    
    -j
1977.5SPEZKO::DICKINSONFri Jul 10 1992 16:398
    
    What is the advantage of a company doing this ? And to follow .4, what 
    would DEC gain in following IBM ?
    
    peter
    
    
    
1977.6Focus, competitiveness...JANET::LORDJanet @OFO, 274-6327Fri Jul 10 1992 17:5828
    Again, my opinion... super large companies, like DEC and IBM, with
    the scope and breadth of products and services are unweildy to manage; 
    products overlap; priorities get muddled (sound familiar yet...
    think about the recent OSF/1 on MIPS scenario...)? Smaller, more 
    targeted compaies tend to stay more focused and competitive.  P&L 
    is easier to track, so you know when you're successful and when you 
    aren't.  The fittest survive.
    
    Vis-a-vis DEC's emulation of IBM... it's just an observation.  It
    seems that when IBM restructures itself, DEC isn't far behind. 
    A commodities company (PCs, printers, terminals and, perhaps,
    workstations), a complex systems company (i.e., VAX/Alpha),
    a services company, a software company... each with a different 
    way of approaching the business... not beyond the realm of 
    possibility, I don't think.  Each would be a multi-billion-$$ 
    entity... I can't speculate on what it might mean for stock (Akers 
    said IBM might sell stock in each of the Baby Blues later in the 
    90's...) but it certainly would focus the effort against the
    competition.  
    
    And I agree that, in that scenario, a sales force for each would
    be a reasonable thing to consider... instead of having one sales
    force that works for all of the sub-companies.  Imagine the training
    sessions... each business unit would be competing *heavily* for
    sale rep mindshare.  Hmmm.... sounds sorta like today, in fact...
    :-).
    
    -j                                        
1977.7heard on the radio -- must be true! LGP30::FLEISCHERwithout vision the people perish (381-0899 ZKO3-2/T63)Sat Jul 11 1992 07:5510
Well, to add fuel to the rumor mill:

Yesterday afternoon, after work, I heard a brief discussion on WBZ radio
(Boston) between their business correspondent and the news anchor.
The anchor asked what was happening with Digital.  The answer was that there
was some talk among traders towards the close of the market about either
a takeover or an "asset sale".  The business reporter specifically said
that no company or party was specifically named.

Bob
1977.8Conversations and observations during last week ...YUPPIE::COLENeck-deep in the Big Muddy, ...Sat Jul 11 1992 16:404
	... lead me to believe there will be some sort of split-off of the SI 
business this FY.  Also, SI managers are scrambling to get financial data up
to date on their programs, and PM's are being told to have "solid" business
plans for their programs by the end of Q1. 
1977.9Opinions and speculation *only*JANET::LORDJanet @OFO, 274-6327Sat Jul 11 1992 23:098
    Just to be clear... my opinions are just that... opinions and
    speculation.  I don't *know* of any plans by DEC to split up
    the business... it's just seems that when IBM has made major
    moves like this in the past, DEC has followed.
    
    I was *wondering* why the stock was up a bit on Friday... 
    
    -j
1977.10SDSVAX::SWEENEYRum, Romanism, Rebellion�Sun Jul 12 1992 12:511
    See 1852 here, "The Real Reorganization"
1977.11divisionFDCV14::FREITASPaul FreitasMon Jul 13 1992 00:013
    Digital SI may become a division but not a subsidiary, not a seperate
    company (at least that's what I heard). When you look at the margins
    compared to the competition this only makes sense. 
1977.12RE: .11 - Yes, "division" was the word I heard used, too.YUPPIE::COLENeck-deep in the Big Muddy, ...Mon Jul 13 1992 09:140
1977.13FSDEV::MGILBERTGHWB-Anywhere But America Tour 92Mon Jul 13 1992 14:457
    
    Actually, Friday's rumor may have had more to do with the sale of GSO
    than with a take-over rumor. I suspect that both DEC and XXX-Xxxx had
    to file papers, if not with the SEC at least with some governmental 
    bodies, letting some people know what's going on. This may have fueled
    the "asset sale" talk. Although I also heard the proverbial
    take-over/merger rumor was floating around again (NYNEX-DEC this time.)
1977.14not as a division...FROZEN::CHERSONthe door goes on the rightWed Jul 15 1992 21:2615
    >Digital SI may become a division but not a subsidiary, not a seperate   
    >company (at least that's what I heard). When you look at the margins   
    >compared to the competition this only makes sense. 
    
    Making us a division, and not a wholly-owned subsidiary (with
    NON-DIGITAL management) will not improve margins.  We cannot compete
    equally with the EDS's and Andersens of the world using Digital
    operating system/marketing/sales.  If we just become a division than it
    will be the same people with different acronyms, which is a familiar
    act.
    
    I have tried to start a discussion of this in
    BOSDCC::CONSULTING_PRACTICES.
    
    /d.c.