Conference 7.286::digital

    I went and borrowed my neighbor's paper again.  I'm wrong, they didn't
    directly [and wrongly] call Mr. Palmer's statements announcements; they
    just quote the plans and then follow it with Mr. Palmer's name so it
    sounds like he announced it.  Very clever bit of misleading journalism.
    
    The article's not very long, about 12 paragraphs.  It looks like WSJ
    started from the talks and memos, overstating somewhat, and the items
    in .0 are derived from that and reported as fact, rather than
    speculation.  
        
    Here are key extracts:  
    
    "Digital Equipment Corp. plans to shed at least 20,000 more jobs in the
    next two years and is considering the sale of business units as part of
    a restructuring aimed at regaining competitive footing.
    
    "In internal documents, Digital's chief executive officer, Robert B.
    Palmer, advised managers that 'the whole enterprise could be at risk'
    if drastic work-force reduction and other steps are not taken.  A
    Digital spokesman confirmed the authenticity of the documents, which
    were obtained by the Wall Street Journal.
    
    "Although Digital has said earlier that it plans further work-force
    cuts, Mr. Palmer's internal communications were the first indication of
    how deeply he is planning to cut.  Digital currently employs 92,000
    people, including 7,000 temporary workers."
    
    Then there's a 4-paragraph summary of the DVN ("an unusually candid
    companywide video presentation on Tuesday" [sic]) and one paragraph of
    speculation about which business units might be sold -- the item in .0
    refers to this as facts. Then, 
    
    "In one memo, Mr. Palmer compares the company [with IBM and HP] in
    revenue per employee, concluding that this metric "suggests a company
    of 65,000 people -- or fewer."  This reference was to permanent
    positions, a company spokesman said."
    
    And they close with 2 paragraphs of financial analysis, in which they
    speculate the 65,000-people goal will be viewed favorably. 
    
    --bonnie

||||||  Digital Press and Analysts News  ||||||||||||||||||||||||||||||||||
                                              Digital Equipment Corporation
                                          Maynard, Massachusetts 01754-2571
Editorial contact:

David Farmer
Digital Equipment Corporation
(508) 493-0179

Dan Esbensen
Touch Technologies, Inc.
(218) 525-9238					   


                   DIGITAL AND TOUCH TECHNOLOGIES
            ANNOUNCE JOINT PRODUCT, SERVICE PARTNERSHIP


MAYNARD, Mass. -- May 3, 1994 -- Digital Equipment Corporation and 
Touch Technologies, Inc. announced today, effective immediately, a 
partnership through which Touch will assume full responsibility for 
the development and maintenance of several Digital software 
applications. Also under the agreement, Digital will act as a Touch 
Technologies distributor. Digital will sell and distribute the 
products under the current names and order numbers and will 
continue as the service provider. Existing service contracts will 
remain unaffected.

     Included in the partnership are the VAX DOCUMENT, DECdecision, 
DECquery, DECcalc, DECgraph and DECslide software products. All 
products operate on the OpenVMS for VAX operating system; DECquery 
products included also operate on the MS-DOS, MS-WINDOWS and 
Macintosh operating systems.

     The partnership was designed to ensure security and continuity 
for Digital customers. In addition, Touch plans to move forward 
with upgrades to existing product features, as well as address 
customer needs for additional platform support. For example, Touch 
Technologies plans to port VAX DOCUMENT to Digital's Alpha AXP 
platform running the OpenVMS operating system, with availability by 
the end of 1994.

     "We've hit the ground running with immediate plans to move 
these products onto the Alpha AXP platform," said Dan Esbensen, 
president, Touch Technologies. "Touch's experience in moving our 
worldwide, distributed products to Digital's Alpha AXP systems has 
given us invaluable expertise for successful migrations." 

     "Digital is completely committed to on-going customer 
satisfaction," said Harold F. Enright, Digital's vice president, 
Software Products. "Customers of VAX DOCUMENT, DECdecision, 
DECquery and the others outlined here today will continue to 
receive world-class technology and support for the products they 
have come to rely on in their every day operations."

     "This arrangement is an enhancement to the on-going 
partnership between Digital and Touch, and underscores Touch's 
ability to respond to Digital customer needs," added Enright. 

     Touch Technologies is a San Diego, California based research 
and development company with over 12 years experience in developing 
languages, systems software and applications software in the 
Digital VAX/VMS market. They have proven capabilities for rapid 
software development and quick response times to customer needs. 
Customers range across the spectrum of Fortune 1000 companies. 

     Digital Equipment Corporation is the world's leader in open 
client/server solutions from personal computing to integrated 
worldwide information systems.  Digital's Alpha AXP platforms, 
storage, networking, software and services, together with 
industry-focused solutions from business partners, help 
organizations compete and win in today's global marketplace.
                                ####

Note to Editors:  Digital, the Digital logo, Alpha AXP, OpenVMS, 
                  DECcalc, DECdecision, DECgraph, DECquery, DECslide 
                  and VAX DOCUMENT are trademarks of Digital 
                  Equipment Corporation. 

		  MS-DOS and MS-WINDOWS are trademarks of Microsoft 
                  Corporation. 

		  Macintosh is a trademark of Apple Computer, Inc.

CORP/94/456
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    I would have liked to have created a new ENTRY ... oh well,
    
    I'm a bit confused about where we are going with our new field "SBU"
    oriented organization.  We said earlier that there was no profit in
    selling product without selling solutions -- now we are reorganizing in
    the field to focus on selling product ... and defocus on selling
    industry solutions.  The attached article from the NY Times would
    lead one to believe that we are heading in the opposite direction from
    IBM.  Note that our stock price has had the same polarity relationship
    as of late.
    ----------------------------------------------------------------------
    
IBM Set to Recast Marketing
Stress on Solutions Instead of Machines
by Steve Lohr 
New York Times, Friday May 6, 1994

	IBM is beginning the most significant overhaul of its 
marketing force in decades to try to recast the company as mainly a 
supplier of solutions for specific industries instead of just a seller of 
machines, industry executives said yesterday.

	The reorganization to be announced to all IBM employees 
today, will create 13 different industry groups within the company's 
worldwide marketing force.  The industry units will focus on 
providing information-processing products and services tailored for 
different businesses like finance, petroleum, insurance, health and 
travel.

	The marketing shift is part of International Business 
Machines Corporation's drive to find a profitable future.  
Manufacturing computers, once so profitable for IBM has increasingly 
become a highly competitive business with slender profit margins.

More Lucrative Side
-------------------
	The more lucrative side of the computer industry is now 
selling combinations of machines, software and solutions tailored to 
specific industries.  With its reorganization, IBM is saying that 
members of its marketing force must be industry experts, or 
consultants rather than product sellers.

	IBM's 30,000 well-paid marketing representatives worldwide 
must sell far more than machines to justify their expenses.  "IBM's 
high-cost marketing force has to become more efficient and add more 
value."  David Yoffie, a professor at Harvard Business School, said.  
"That's what the company is trying to do here."

	For more than a decade, IBM has reshuffled its sales staff 
every few years.  And while the company has long had product and 
industry specialists in its marketing force, the real power has rested 
with IBM's geographic sales organizations.

	"Never before has the company said that the industry focus is 
the primary way that IBM will address the customers,"  Bob 
Djurdjevic, president of Annex Research in Phoenix, said.  "This is a 
big change and it will inevitably diminish the power of some of the 
czars around IBM."

	The marketing change, to some degree, represents an 
acceleration of the direction the company has taken for nearly two 
years. -- and especially under Louis V. Gerstner Jr., who became the 
chief executive of IBM 13 months ago.  Last summer, Mr. Gerstner 
decided against breaking up the IBM marketing force so each 
business, like mainframes and mini-computers, would have its own 
sales group.

	Mr. Gerstner decided instead that IBM's size and reach in the 
computer industry could be an advantage, if properly deployed.  
Pushing the sales force in the direction of industry specialists is a key 
part of the plan.  In talking to corporate customers, Mr. Gerster has 
said, big banks, airlines, retailers and others want a company that can 
provide sophisticated data-handling solutions to business problems.

Considerable Challenge
----------------------
	But accomplishing that will be a considerable challenge, 
industry executives say.  And doing it in a way that increases IBM's 
revenues and profits will also be difficult.  For months, IBM's revenues 
and profits will also be difficult.  For months, IBM's two top 
marketing executives Robert J. La Bannt and Ned C. Lautenbach, both 
senior vice presidents, have led a corporate task force on how to trim 
the company's expenses.

	The shift toward an industry-based marketing force will be 
carried out gradually but steadily during 1994.  "They've got to be 
careful because if there's too much change, they could disrupt current 
sales."  Daniel Mandresh, an analyst for Merrill Lynch & Company, 
said.

	IBM's corporate customers will not necessarily notice 
immediate changes because of the marketing reorganization.  
Typically, the IBM sales representative which the company now calls a 
"client executive," who serves a customer will not change.  But that 
sales representative will likely report to someone else based on the 
industry in which he or she is a specialist.

	"IBM had a lot of industry experts before, but they were 
controlled by the regional managers,"  Sam Albert, a consultant in 
Scarsdale, N.Y., said.
    

    I'm not at all convinced that CBUs *can't work*... and maybe they
    *will* work at IBM.
    
    It's just that the way Digital *implemented* them.... that didn't work.
    
    tony

    Aren't the industry segments (which are part of the Systems Business
    Unit) still dedicated to industry solutions, i.e, shrinking away the
    huge CBU-infrastructure that was created this year to a sleeker
    organization aimed at industries?
    
    I thought that was the case; and I sure hope I'm not wrong.
    
    I remember Palmer being very much excited about the CBUs at the start
    of the year.  He said that no other company has this, all our customers
    want it, etc. etc.  I remember when the SBU was announced, he said
    that the industry focus wasn't changing, just the way we were doing it.
    
    Wasn't it Lucente who sent out the memo saying (roughly) "we're a box
    company"?
    
    What is the purpose of the industry market segments in Enrico's SBU?
    
    Thanks,
    
    STeve

    Please, please, please, Digital, don't sell disk, software and chip
    mfg. Please, remain what you are and get rid of all thing that create
    burocracy, overhead and waste. Continue to be a complete solution
    provider, with the possible exception of the things you are not able to
    do or the things somebody else is doing FAR BETTER than you.
    PCs are now going well. Disks are now going well. DC is doing OK.
    Alphas are going well. O.S. are good. Keep all this stuff. And make
    money with that. Our SW stuff is not good? You'll not find somebody
    wishing to buy it: sell the products for lower prices and gain market
    share! The SW products already exist: SELL them for almost nothing!
    DECwrite is too high with the price? Sell it for 50 $ a copy. When
    you'll have 1,000,000 copies sold then raise the price: this is what
    Microsoft does when they want to have wide acceptance from the market.
    But keep also the SW stuff, because it is the engine by which hardware
    stuff goes on.
    
    Am I a dreamer? Why?
    �AA