Conference 7.286::digital

    Rob, there's already a similar program in place for all MCS field
    engineers. We get 1% of anything sold due to a lead that we have turned
    in to sales.
    
    Harry
    

    THe problem, IMHO, is not in the quantity of sales, it is in the
    Quality of our selling. We still have sales reps that have no concept
    of what they are trying to sell, we still insist on swapping
    organizations, sales territories, management philosophies, and so on,
    over couple of months... 
    
    We recently received a directive that the account manager is the be-all
    and end all of the customer contact.
    
    Let me relate two recent anecdotes to you...
    
    1. A Customer is about to migrate from DG to a mid sized alpha (OSF),
    they ask their account manager for a local reference site. He can't
    find anything. The sale is soon to be lost, the customer wants to buy
    our gear, but can't justify to management the risks of being close to
    the bleeding edge of technology. Customer calls a couple of other
    customers, 3 (!) of whom call me. I make three phone calls, and have
    two almost identical sites, that are more than happy to pass on glowing
    references...
    
    2. Customer has just had 2 days of meetings with account management
    team. Rings me for point of technical clarification on technology X. I
    point out that product retirements have been announced for that
    technology, and quote the technical superiorities of the replacement
    technology. Customer thanks me for saving them $.25M in unnecessary
    development costs (this is not lost income for DEC, it is wasted
    expense for customer.) and wonders why detailed discussions with
    account management team did not even high-light this... (Probably
    because we are focusing on being a business partner, at the cost of
    being a technology partner, which is our real forte.
    
    Bottom line: We are still in a situation where sales reps don't
    understand all of the time what it is that they are selling. They have
    a cumbersome Ordering system behind them, and management that likes to
    distract them with a barrage of organizational changes and other
    unnecessary distractions.
    

    Why not establish a sales force that is only focused on new customer,
    and commissioned to reflect the challenges of opening digital to new
    customers. From my observation digital sales force, and our
    distributors seem to focus on established accounts, missing the other
    opportunities of the this sales enviroment. The only way to survive in
    this business today is in numbers.

Harry,

	Only some parts of our sales are this way.  In the CSC if we sell 
some consultancy (performance tuning, application debugging, disk recovery, 
etc.) our sales just get thrown into a pot and if the pot gets full we are 
given some $$ to spend on an event.  So guess what most folks are going to 
try hard to do 1) report sales leads that result in $$ in their pocket or 2) 
report other leads that 'possibly' result in some kind of party ???  I say 
revenue is revenue, whether we sell some hardware or some software or some 
service or some knowledge.
    
Jilly who_tries_his_best_at_both

    I'd expect the reward to be greater, not less, for selling consulting
    services! The margins in that area _should_ be MUCH greater than in the
    hardware business!
    
    Harry
    

>    I'd expect the reward to be greater, not less, for selling consulting
>    services! The margins in that area _should_ be MUCH greater than in the
>    hardware business!
 

	This is down to goals amd rewards.

	example; the margins on consultancy may be better, however CSC is not 
	goaled that heavily on selling consulting, so the rewards for the 
	seller aren't too high...............reward is not based on margin to
	the company, but meeting the goals of the CSC.
	  

	Heather

    According to the today's Globe, the quarter's drop in revenue from
    the integration and consulting operations was one of the black
    marks in yesterday's release.  Everybody else (HP, Compaq) is
    booming with bookings three quarters into the future, yet Digital
    is losing business in the sector.

>>    According to the today's Globe, the quarter's drop in revenue from
>>    the integration and consulting operations was one of the black
>>    marks in yesterday's release.  Everybody else (HP, Compaq) is
>>    booming with bookings three quarters into the future, yet Digital
>>    is losing business in the sector.


I don't think integration and consulting sales dropped.  The entire "services"
bucket dropped about $200M, but this was primarily due to the movement from
VAXen to smaller systems, and the associated drop in hardware and software
service revenue.

The quarterly report didn't break out "consulting", so where did the Globe 
get their info?

    .re last: where did the Globe get that breakout?
    
    Digital had a briefing with analysts/press at 10am Wednesday
    morning that may have gone into more detail than the sanitized
    numbers.

    
>>    Digital had a briefing with analysts/press at 10am Wednesday
>>    morning that may have gone into more detail than the sanitized
>>    numbers.

Gresh Brebach had a DVN Friday wherein he said the Digital Consulting numbers
were up from Q1 and on target.  So, I question the validity of the Globe's
report.

Being from NY, I don't get the Globe, but there have been many references in 
this conference about the Globe's anti-DEC stance.  Perhaps we should consider
the source.

    RE: 9
    
    Bingo!  As ALPHA rolls out in greater numbers, replacing existing
    VAXs, our SERVICES revenue will continue to decrease.  This
    decrease in maintenance sevice will be larger and occur more
    quickly than it can be replaced with consulting and integration
    revenues.  
    
    We need the leaders of this company to be honest.  Our revenue will
    continue to shrink($1.25B to $1.5B this year, $1.5B to $2.0B next year).
    We cannot maintain the current headcount.  In fact, Digital should
    shrink headcount to 45K in anticipation of being an $8.0B to $10.0B
    company(If we are fortunate).
    
      
    headcount.  

    Well, I think the goal is to do more than just replace Vaxes.  You are
    right about that sceanario.  My customer, who was buying $15k
    vaxstations in 1993 is buying $6k AXP pelicans today.  But I am
    chartered to find new accounts (oems).  There are a lot of places that
    Intel and Motorola rule today that are ripe for the AXP.
    
    One slight problem....our goals haven't recognized that finding new
    places of business is more important than sustaining the old revenue
    stream (because that can't be done).
    
    Why is this important?  Look at it this way.  In 1992 my customer
    bought $1.2m of the aforementioned Vaxes.  We switched to AXP, gained
    20% more marketshare and find that equals only 50% of the revenue that
    we got last year.  So we went after the installed base to upgrade that
    ( a onetime shot) and will probably hold off the collapse another year. 
    Well, my budget was for a 20% icrease alright, but in revenue.  Which
    would have required a 300% growth in marketshare to attain (joke,
    right?)
    
    It gets better, folks (don't ask me who) decided that they could not
    trust the new 20% commission plan to drive me to attain max revenue so
    they hold all the "new account bonuses" until I ge the revenue goal
    done (or at least on ytd %).   So the most important is in last place. 
    Good strategy right?
    
    Well, long days and weekends, has me at 76% ytd and slipping about 4%
    each month as the relative "velocity" delta between price performance
    gains and marketshare gains has its effect.  
    
    We are into the crunch time now, % of revenue shippted equals
    commission checks.  Like most americans, about 75% of my income went
    elsewhere leaving about 25% disposable, of which Digital removed 80%
    and pays it back under this flawed plan.
    
    How should it be changed.  Elect me president for a week (probably take
    longer than that though, and I am just kidding), and I would make new
    business top priority by featureing a design win program that was
    revenue oriented.  Meaning that when the production goal (say $500k of
    ships) was attained, no matter how long it takes, 2% or something like
    that goes to the sales "team" that got it done.   That $500k would also
    count as percentage points on someones goals sheet and pay commision
    like any other revenue ship.  The point is that it is NEW business.
    
    nuff said time to back to work.....
        

    re: .13
    
    I have the feeling some REALLY important messages are in your note.
    Would that those messages could get into the right mailboxes.
    
    Steve

    As previously mentioned, revenue is on a downward trend and profit
    margins are lower for non-VAX products.
    
    .13 vividly illustrates the problems and proves how important new
    customers are in order to reverse the 'death spiral'.  If we want to
    get back on track, we need to sell to new customers.  
    
    To displace a competitor, Digital needs to sell solutions that are 
    relatively painless from a technology and financial standpoint.
    
    So how does Digital get new customers ?  
    
    One way is to displace other vendors, and this typically means 
    'Migration Technology'.  For Alpha solutions, the Alpha migration center 
    should make things happen.  For VAX-based solutions, turn to the proper 
    conversion center (are there any left ?).  Even if we offer migration 
    services for below market prices, it is worth it in the long term.  Once 
    Digital sells product to a new customer, more services and product will 
    follow. 
    
    Competition and new technology will continue to put pressure on our 
    profit margins.  An emphasis on finding new customers is essential to 
    making Digital a profitable company. Otherwise, even maintaining revenue 
    will be like "treading water with the sharks". 
    
    Digital needs to work smarter not harder.

>    
>    So how does Digital get new customers ?  
>    
>    One way is to displace other vendors, and this typically means 
>    
>    Digital needs to work smarter not harder.
>
Digital needs to price VMS to compete with PC operating systems.  We
fly then.

Lew

    I'll give you an example of that.  I have a customer who just hired
    another programmer.  Well now they need to buy a new Rdb Single User
    Development license.  (They currently have one.)  Wel the customer
    called Dec-Direct, and got a quote of about $7000.00.  Well they
    customer looked at me and said what is your company crazy!  I'll just
    write some command procedures and give the new programmer privileges to
    submit batch file compilations under the user that is licensed.  Hence
    no revenue for Digital and a pissed off customer.  The customer would
    have paid up to $1000.00, but $7000.00... come on!  Why are we so
    uncompetitive in this area???
    
    - Mike

    re: -1
    
    If you have questions about Rdb pricing, send mail to the Product
    Manager, Andy Schneider. A full blown Rdb development license can range
    from a few thousand to over $200,000 last time I looked.
    
    Our competition is SYBASE, Oracle and Ingres. Have you looked at their
    prices? I believe that our prices are generally lower than theirs.
    
    Michael Moy
    Database Systems Engineering

    My only question is why is a 1 user development license so expensive.
    Why does it matter what processor your on?  Either way we lost out.
    

    RE .19
    
    If you look at the prices you'll see that a capacity license for even
    the smallest VMS system is about $7,000 too. This means that the
    personal use license is priced in line with the capacity licenses.
    
    What the pricing (ie the product manager) is saying is that Digital
    believes that Digital thinks if a customer has a person doing RDB
    application development it is worth $7,000 to him. If your customer
    disagrees he should go elsewhere. I presume that the product manager
    has priced RDB competively, if he hasn't let him know. I'm sure he'd be
    willing to listen to your input.
    
    Dave

    Oh yes one further point. I'd suggest that the customer reads the T&Cs
    of his license contract. I'm guessing here but I wouldn't be at all
    surprised to find that submitting jobs under another username
    SPECIFICALLY to work around the PAK would be a violation of the
    licensing terms. Remember PAKs are just to help customers stay within
    their licensing terms. They are not intended to actually ENFORCE
    licensing terms.
    
    Hey tell the customer that there is no need to go to the trouble of
    writing DCL to submit jobs under another username. It would be a lot
    easier just to patch NOOPs into the entry points for the
    SYS$GRANT_LICENSE system service.
    
    Dave

According to VTX PMLOC, the product manager for Rdb/VMS is:

Product Mgr   ANDREW SCHNEIDER        381-1696  WILBRY::ASCHNEIDER    ZKO02-01

Send him mail and ask if the price is correct.

			Steve

    I just spoke to Andy and he confirmed the $7K price. He showed me some
    competitive information regarding concurrent use licensing where we are
    competitive with Oracle. This runs at about 1000 per Rdb activation.
    
    So your personal use license will cost about 7 concurrent usage seats.
    Concurrent use licensing isn't available for development yet - only
    runtime.
    
    michael

    Gee - guess I'll throw my $.02 in here.  The basic idea was that
    a single named-user development license was roughly equivalent
    to a developer sitting at a workstation.  As such, the named user
    price is identical to the capacity workstation price.  This single
    named user can activate Rdb as many times as he/she likes with that
    single license.  Our competition doesn't necessarily do business that
    way - they sell Concurrent (single shot) licenses for development.
    So, for the case where a developer wants to submit a single batch
    job it's only 1 concurrent use "hit", as opposed to a developer sitting
    at a workstation doing multiple tasks.  Both license types have their
    advantages and disadvantages, and one big disadvantage of Named User
    licensing is the "submit a batch job under a licensed user name" method
    eluded to earlier, which is straddling the line of violating the
    T&Cs of their agreement.
    
    We're in the process of adding concurrent use development and 
    interactive licenses for Rdb on All platforms in the coming
    months (check out the Feb 8 announcement for specifics on part of
    this).  Once these are in place, we will offer the advantage of
    each license type at all levels (currently Named user for dev and
    interactive, and concurrent for RTO).
    
    If anyone wants to discuss this further send me mail off-line.
    
    regards,
    andy schneider
    DEC Rdb for OpenVMS product manager