Conference 7.286::digital

    Bob Palmer is the CEO.
    Russ manages Americas under Ed Lucente.
    
    

    If you have been watching what Lucente has been doing, I'd think
    it's a fair assumption. Palmer built the CBU's, Ed's tearing them
    apart. Bob says we aren't product focused, Ed says we are. I'm sure
    there are many other examples of this.
    
    What's an employee to do?
    
    Keep your sense of humor & can't wait 'till July!
    

    Gullotti as CEO? Please no! BTW Today I have taken my exit interview
    and have voluntary left Digital. It was a hard decision. I am going to
    be working for a large company who also is a Digital customer. I will
    be a primary Digital interface and am now having to be very concerned
    from a customer's point of view. I surely hope things improve and can't
    see Gulotti bringing the inspiration needed, although I'm sure he's a
    nice enough guy. Goodbye after 9 years.

    From a sometimes reliable industry newsletter called unigram.x:
    
    Re-organization looming at DEC, particularly since the recent
    announcement of dismal results, look for a re-organization
    that moves current CEO Bob Palmer sideways....
    
    I guess we'll soon find out.
    
    Dan

    The latest Business Week has an article that is not too kind
    to BP.  Indicates that Lucente will get more power at the expense
    of Palmer, which seems to agree with what .4 mentions.
    
    /Butch
    

    I'm not an expert on these kind of things but I would think that a
    company as complex (broad) as Digital would be next to impossible for a
    single persion to manage...particularly in bringing the company out of
    a slump...that is, without help. I think that applies to both Palmer
    and Lucente.
    
    It would seem that "rule by committee" such as the previous CBU
    structure (for Sales at least) hasn't worked and giving someone such as
    Lucente empowerment to try and put Sales/Marketing into a competitive
    posture. It appears at least that increasing empowerment is being given
    to the individual product lines as well. They don't seem to have been
    touched.
    
    I believe that the work we have to do with the market such as restoring
    confidence and ensuring that this complex corporation we work for is
    enough to keep one (good) person busy full time. Trying do to
    everything with a single person may be something that's beyond reach.
    
    With that said and assuming Palmer is still running this ship, turning
    over the reigns to someone (i.e., Lucente) that might be best qualified
    to structure the sales & marketing for the Company and having more time
    to devote the "glue" of the Corporation (not to mention our nemisis
    Wall Street), is not a bad idea.

    
    FYI: This discussion has been 'censored' in the UK Digital notes
    conference. 
    
    The moderator has write locked and hidden a note concerning this issue.

THe latest Business Week International has an article on Digital that
addresses this issue.

The article describes a collapse in high-end server sales during the current
fiscal [which resulted in the DVN urging people to sell more AXP Servers]
It reports that the Board are extremely unhappy about the Q2 resilts, however
they are sticking with Bob Palmer. [You would believe the author interviewed
one of directors Vernon (?) from the tone of article].

The article also says that the CBU's [it calls them customer organized 
mini-companies] are being replaced by a Product oriented organization
in April. I hadn't heard even a rumour of this over the net, so I've no
idea whether this is fact or informed speculation.

Mark

    re:.7
    
    In the UK, we have access to a conference called HUMANE::DIGITAL, which
    informs us of any rumours currently circulating.

re.7:

>    FYI: This discussion has been 'censored' in the UK Digital notes
>    conference. 
>    
>    The moderator has write locked and hidden a note concerning this issue.

As the moderator concerned, I'd just like to point out that the issue was 
not censored but a note purporting rumour as fact was. In fact, the issue has 
continued unhindered in another topic!

Dave (Co-Mod UK_Digital)

    Palmer addressed this issue voluntarily at the taping of the Employee
    Forum.  The conversation was something like this?
    
    Question (from the UK): Rumor has it that Lucente is really running the
    company.  How would you respond to this.
    Palmer:  I think Ed would be suprised to hear this and I would
    certainly be suprised.  Each of the senior managers controls a
    significant part of the business.  The changes with the CBUs were just
    a fine tuning with which the board and I agreed.
    
    This is not a quote, but it conveys the sense.  Palmer's opinion was
    that he was still in charge.
    
    Of course, you could hardly expect him to suggest otherwise.
    
    Watch the DVN.  It was pretty good live. 
    
    LI

    
                      (Without permission , etc.)
    
Subj:	Latest Business Week article about Digital 

Business Week February 6 issue:

    
How DEC's 'Minicompanies' Led to Major Losses
 - Red ink dooms an innovative structure just recently adopted

Just 14 months ago, Robert B. Palmer was pulling raves for pursuing 
one of the computer industry's most daring strategies.  The 53-year-old
chief executive at Digital Equipment Corp. launced a remake of the troubled
company with a radical reorganization.  He divided the $14B Goliath into
autonomous minicompanies organized by customer type, the better to anticipate
buyer needs.  "This is not a temporary change," Palmer pledged at the time.

Or so he thought, until a $72M loss for the quarter ended Jan. 1 junked his
restructuring.  The red ink having destroyed DEC's hopes for turning a
profit for the fiscal year ending July 2, DEC's board decided to abandon
the CEO's new structure in favor of a conventional organization in which
the company is built around product groups.

"Unhappy."  The retrenchment is a clear repudiation of Palmer's strategy.
Board members, who ousted DEC found Kenneth H. Olsen two years ago, insist
they're sticking with Plamer, who landed DEC's top job in October, 1992.
"The board has a lot of confidence in Bob and the team he put together,"
says Vernon R. Alden, an outside director.

But if DEC doesn't regain profitability soon, Wall Street analysts contend,
Palmer's job could be in jeopardy.  "The board's real unhappy," says 
Salomon Brothers Inc. analyst John B. Jones, Jr.  The pressure is building
fast:  Investors have been dumping DEC's stock, which has hovered at 31
since the loss was announced on Jan. 19 --- 20% below its price when Palmer
took over.  And some big shareholders think getting DEC back on track will
take some time.  "I'm pessimistic," says Robert Spremulli, investment officer
at major shareholder TIAA/CREF, a teachers' retirement fund.  "The long-term
dynamics are poor."

As Palmer has faltered, his No. 2, Edward E. Lucente, worldwide sales and 
marketing vice-president, has become stronger.  Indeed, reports --- denied
by DEC --- are circulating inside the company and on Wall Street that Lucente
soon will be named chief operating officer and president, becoming Palmer's
designated heir.  Lucente's responsibilities already nearly correspond to 
such a position.  Under the reorganization, the former IBM sales executive,
who joined DEC a year ago, now is responsible for units that account for 
80% of DEC's product revenues.  Neither Palmer or Lucente would comment.  But
CFO William M. Steul downplays the move, calling it "fine-tuning".

How will the reorganized DEC work?  Instead of selling packages of computers,
software, and services through units organized by customer type, DEC now will
be divided into units that sell specific product lines, such as workstations,
servers, and software.  The problem with the old approach, to be scuttled
on April 1:  It combined low-margin products and high-margin services, 
undermining the sales of each, says Dekkers Davidson, a partner at consultants
Mercer Management Consulting, Inc.

"More Fallout"  Indeed, Palmer's business strategy ran smack into a major 
shift in the computer industry.  The rise of standard hardware and software
let customers cheaply knit together systems from various vendors.  Palmer
thought he could buck the trend by getting closer to customers and convincing
them to buy complete systems.  But DEC wound up winning fewer and fewer
contracts.  "DEC's business focus is not in sync with how people are buying
today," says Irv Shapiro, president of Metamor Technologies Ltd., a consulting
and software-development company.

Palmer's minicompanies faltered almost from the start.  Most of the key 
executives involved grew up in DEC's engineering departments without significant
sales experience.  "Unfortunately, many of the people knew nothing about the
industries they were put in charge of," says a senior DEC manager.  DEC's 
product sales steadily worsened as the plan went into effect last July.

The turning point came in September, when sales of DEC computers priced
above $200,000 fell sharply.  Palmer then went before the company in a 
video broadcast, appealing for a sales focus on moving high-price AlphaAXP
computers as well as consulting and service contracts.  Soon thereafter, 
Palmer expanded Lucente's duties, and Lucente tried to whip us sales with
aggressive pricing of key AlphaAXP computers.

Both efforts came too late.  Jones estimates that only $10M of some $120M
in AlphaAXP sales for fiscal second quarter, ended Jan. 1, were high 
margin "server" machines. The vast majority were low-priced workstations.
So there's more fallout to come.  Even if Palmer meets his goal of cutting
employment to 85,000 by July, from 92,300 now, declining revenues could 
force more restructuring, Wall Street analysts say.  And Jones figures
DEC will lose $75M more in the quarter ending Mar. 26.

The bottom line?  Palmer, who a year ago pledged to save DEC's 90,000 
jobs, now must wonder if he can keep his own.

By Gary McWilliams in Boston
    

    

    
		I just had to throw this in here after seeing the
    	inverse relationship between the 20 percent drop in DEC
    	stock and the 20 percent raise the board approved Mr.
    	Palmer. I know , I know.....there's no correlation and
    	our future is not PC, and our future is not PC, and our
    	future is not PC.........
    		
    				Pablo
    
Company		Sales	Profit	Mkt. Value	CEO Salary
		$Mil.	$Mil.	$Mil.		$ Thous.

Apple		7087	530	3064		1127	 
Dell		2014	102	 673		 539
Digital Equip. 13931  -2310    	5413		 738
H-P	       16410    881    18487		 563
Intel	     	5844   1067    26465		1351
IBM	       64523  -6865    25197		  NA
Microsoft       2759	708    20197		 285
SGI		 867   -118	2576		 695
SUN 		3589	173	2671		 996

Source, Business Week, October 11th 1993
    

    This week's issue of Business Week printed the rebuttal letter from
    Charles Holleran, VP Communications.  It contained the usual spin
    control drivel: leadership in client/server computing, PC business
    doing great, losses reduced, etc.
    
    Business Week also printed one other letter about the DEC article:
    
    "Thank you for your article on DEC.  Now I know why they changed
    its colors from blue to red".  -Norvell Nelson, Palo Alto, CA.
    
    Tee hee ;-)
    
                                                                    
    

    To -1
    
    Why do you take such pleasure in negative press about the company
    paying your salary, and why do you find an attempt to correct factual
    errors 'spin drivel'? If you find things so disdainful here perhaps
    there is an easy remedy?

The Feb. 7th BW article was a hatchet job.  The picture of BP standing
up against a "blood" red brick wall was atrocious.  Unfortunately, the
facts in the article are undeniable, and causing concern for everyone.

    
    
    RE: .15  Perhaps he (as I think many of us are) is hoping that if
    things get enough attention, there will be some issues addressed which 
    wil affect the level of difficulty involved in doing business with
    Digital.  The negative perceptions in the marketplace are real, some
    deserved and some undeserved.  A rebuttal to an article in an editorial 
    section will not stop the perceptions.  These perceptions do scream one
    thing (to me) in volumes, that being, "WE ARE NOT GETTING OUR MESSAGE
    OUT".
    
    
    Mike 

    Was the picture of M. Palmer in the BW article the same one used by
    Forbes in its computer industry survey sometime last year?  If so, did
    anyone complain about it then?  (I do seem to remember someone in
    some conference remarking that, in that picture, his shoes were not
    the equal of his suit in nattiness. :-) )

>>The Feb. 7th BW article was a hatchet job.  The picture of BP standing
>>up against a "blood" red brick wall was atrocious.  Unfortunately, the

Who LET THEM take that picture???  The picture was worth a thousand words.  You
could look at it as saying "Bob Palmer is traped" or "Digital is traped" either
way - I don't know WHO allowed that picture to be taken.  (I'm assuming the
picture was taken by BW for the article, and that may not be the case).

bjm

    re: the blood red brick wall.
    
    What do you expect?  When the new logo color was announced, many people
    in this conference immediately thought of dried-blood.  I still can't
    believe we chose that color.
    
    Bob

    Dried blood and booze ...   I could go for another logo change.
    
    Steve

    IMHO ...
    
    I don't think the logo color has anything to do with the state of the
    company, nor do I lament the picture that was taken.  An author can
    paint a picture with words that will alter the intended perception of
    any photograph.  The problem with Digital transcends any of the
    issues discussed by the last few notes.
    
    cw

    re: .22
    
    >I don't think the logo color has anything to do with the state of the
    >company, ...
    
    I forget exactly what the color is supposed to mean, but didn't some
    marketing firm pick it because of all the good things customers were
    supposed to think about Digital because of the color?  Of course, one
    could still argue that even then the logo color has nothing to do with
    the state of the company ...
    
    Don't you love those New England Telephone -> NYNEX ads?  There, they
    changed the name and the logo and are using the ads to emphasize they
    are the same company as before, just a different logo.  Here at
    Digital, we changed the logo and the ads to show that we were a 
    different company.  Now, I'm confused ...   <sigh>  ;^)
    
    Steve

    i have come up with a theory about why \DEC changed its color that
    i like to share it with you.

    if we all think of \DEC as a person, then we can related this
    phenomena to the the mid-life crises that people go through, i read
    in the national inquirer paper that when some part of the our
    species of the human race go through mid-life crises where they suddenly 
    want to change the way they look and life style and they go out and
    do weird things for no apparent reason like buying that new red
    convertable and things like that (notice the similarity of the color 
    in both medical cases!) , so my theory is that may be \DEC is also going 
    through a mid-life crises just like some of us would and changing the 
    color is one of these symptoms we see, so if all be more patient it 
    will all go away with time.

    just a theory i came up with while i was pouring my coffee cup at the
    coffee station i thought i share it with you.

    \nasser 

re: .24 mid-life crisis

As long as it's a mid-life crisis that we're seeing and not something like
senility creeping in before the big one then OK.  I'm not convinced that it's
not the latter, however.

Chuck

    I understand the "official" name for the color is PMS-242 (maybe I have
    the number wrong...) but, isn't it an interesting name?  The first
    part, I mean?
    
    tony

All companies in this business face a mid life crisis at the time, when their
first generation products begin to be obsolete and the next generation should be
ready (or is that the puberty age?) It's hard to learn how to go after new 
business and still support the existing one. That's the time, when many starups 
die.

At the age, Digital is now, company is supposed to be mature enough to be able 
to control even the change by predicting that well in advance to be able to
do it gradually. Digital did it pretty well when going first from PDP 8 to
PDP 11 and then from PDP to VAX. Perhaps too well, because the company didn't 
learn enough to do it equally well this time.

Or do we have our veins too calcified to be able to function properly.

--Ritva

    re .26:  'PMS' stands for "Pantone Matching System", so any color would
    be afflicted with the same disease 8-)
    
    ...tom

    RE .28
    OH.  I thought PMS stood for something else.
    
    my mistake.
    
    tony

    We received word that CNN is carrying a story today on Bob's
    resignation - can anyone confirm?

    Yup, I heard it from two sources, both of whom asked if I had heard
    it...
    
    It's too crazy to be believable, or is it?

    Subj:   Rumor On BP
    
    According to Jef Gibson (of Corporate Communications), Bob has
    not resigned!
    
    As of 3:30 today - not true!
    
    (posted without permission)

    Seems unlikely. Earlier today LIVEWIRE announced that he'd be doing
    a DVN next week.
    
    			Alfred

Rumor has it that someone at CNN mis-read the WSJ article, and thought Bob
was the one being let go.

    According to the Business News Desk at CNN, they are NOT running
    a story indicating that Palmer has resigned.