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| Title: | The Digital way of working |
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| Moderator: | QUARK::LIONEL ON |
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| 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 |
3307.0. "DECUS Leadership Forum report" by SSDEVO::PARRIS (RAID-5 vs. RAID-1: n+1 << 2n, in $$$) Fri Aug 05 1994 14:20
The following report was posted in the BUSINESS_PRACTICES conference on
DECUSserve, and shows a (DECUS member and) customer's response to a 3-day
meeting with top Digital management.
<<< EISNER::$2$DIA7:[NOTES$HIVOL]BUSINESS_PRACTICES.NOTE;1 >>>
-< Business Practices >-
================================================================================
Note 432.38 Palmer announces major steps toward return to profitabili 38 of 40
EISNER::MEZEI_JF "Jean-Francois Mezei" 516 lines 5-AUG-1994 00:06
-< Once you read this, DEC won't look as bad >-
--------------------------------------------------------------------------------
THIS REPORT IS FROM ALAN DICK, DEPUTY CHAIR, DECUS NEW ZEALAND,
courtesy Anne Simpson, DECUS NZ office manager.
EXECUTIVE SUMMARY
DECUS LEADERSHIP FORUM 26-28 JULY 1994
The presentations of strategy and tactics by senior Digital personnel,
including the CEO, Mr Bob Palmer, commented on and questioned by the
DECUS representatives may be summarised as:
1. That Digital is now a customer focused company.
2. The matrix management of the past has been replaced by clear line
management.
3. There will be channel marketing for 80% of customers.
4. The named accounts (the remaining 20%) will be serviced by Digital
account representatives.
5. Software will continue to support integration and networking as
in the past, but may increasingly be sourced from third parties.
6. That marketing will be targeted to specific market segments -
Digital will no longer cover all markets.
7. There is a clear segmentation and coverage of OpenVMS, OSF/1 and
Windows NT for customers ranging from mission critical, high
availability systems to desktop operating systems.
8. Digital will have two processor platforms for the long term, Intel
and Alpha. VAX will continue to be developed, but not to the same
price performance as Alpha.
9. A long list of questions and comments will be agreed by the DECUS
representatives and answers will be circulated to all chapters.
10. The goal is profitability this calendar year.
DECUS LEADERSHIP FORUM 26-28 JULY 1994
Sunday 24 July 1994
Met up with Ron Reinhard and we discussed objectives for the forum.
Monday 25 July 1994
GIA (aka G7, APA) met to discuss GIA, the forum and chapter issues. Objective
paper prepared. Meeting lasted 5 hours.
Tuesday 26 July 1994.
The forum format was changed from the timetable distributed prior to the meeting
to:
Day 1. Presentation of strategies
Day 2. Detailed Q&A of the strategy and tactics
Day 3. Communications strategy about the forum and "state of
the nation" addresses from Enrico Pesatori and Bob
Palmer followed by the marketing strategy.
In summary the first day created some confusion for the attendees - some of the
presenters confused tactics with strategy, however day 2 saw some clarification
and day 3 rounded the situation out. The release of the Q4 and year
result on Day 1 did not help.
My overall opinion is that:
1. There is a clear vision and strategy at the top of Digital.
2. There is confusion and dilution of this strategy at the third tier
and below, however the "message" is being steadily improved
throughout the organisation.
3. There appear to be attempts to revert to the "old" Digital in the
creation of some groups and the aggregation of power.
4. There is confusion in many minds as to what is strategy and what are
tactics.
5. That there is an increasing confidence within Digital that the
company will not only survive, but become profitable within a year.
DAY 1.
Lucia Quin, VP Business Strategy, Systems Business Unit (SBU).
A clear and concise message from Lucia that set the stage for the rest of
the forum:
* The first reaction within Digital to the decline in fortunes was
one of shocked disbelief and similar to that of a deer in a
spotlight - terrified to move. This has now gone and there is new
energy and drive within the company.
* A realisation that the industry had moved and that reorganisation
was required in range of products and sales strategy.
* The old management structure is gone - clear line management
structures now exist or are being established.
* That customer focus needed to be, and has been, introduced.
* That there is still a lack of clear enunciation of strategy at a
high level in the company but it is "on the move" again.
* That there is no company wide shared vision of the future. All
energy is focused on the new channels approach.
Willy Shih, VP Unix and NT Systems, SBU.
CSD (Computer Systems Division) - Product Strategy and Direction.
A somewhat disjointed presentation, however the overall strategy presented
was:
* With margins reduced the answer is channels distribution and volume
of sales. Sales targets (volume) are 1,000,000 plus for all
products annually (except high end systems).
* The marketing of products (software and hardware) will be directed
through the channels for all "consumer" products. A consumer
product is defined as any product except the high end systems.
* There will be focus in the UNIX market on workstations and
commercial systems for those who require a UNIX solution.
* That NT is slated for servers and high end PC's (an overlap into the
workstation market).
* OpenVMS is a key product and is to be targeted particularly for the
critical mission and commercial market.
* There will be no internal competition between products.
* Some markets will be left untouched - there will be rigorous
examination of all markets pursued.
Charlie Christ (pronounced Crist), VP Components Division.
Charlie had just returned to Maynard from a month of successful
negotiation with Quantum for the sale of the disk manufacturing unit.
The rationale is that this business is highly competitive and requires
constant, and high, injections of capital to remain competitive. The
division had been returned to profitability and leadership in the larger
disk market. However the capital injections required, and the fact that
the smaller disk suppliers (such as Quantum) are moving into this market,
created a synergy with Quantum for the sale of this business. No jobs
are lost, 5,000 people are transferred to Quantum and Digital will
source its disks from Quantum.
The StorageWorks business was not sold, nor was the disk subsystem
business (RAID etc) - only the disk manufacturing.
Charlie had not had any time to get to grips with his new group, however
indicated that his strategy would be to:
* Listen to the customer - no filtering of the message.
* Ensure that all operations are focused on cost effective
production of equipment that has a known market requirement or
niche.
* Outsource operations that have a high and continuous capital
requirement or low return (high risk) on manufacturing cost.
* Continue with, and strengthen, the development of technologies and
equipment such as StorageWorks, providing required functionality and
leading, innovative, products.
Jesse Lipcon, VP OpenVMS Systems, SBU
Jesse presented a session that elicited a lot of questions due to the VMS
background or interest of most of those present. His session concentrated
on showing that OpenVMS is a key product, will continue to be a key
product (on both Alpha and VAX), and is gaining new business, particularly
for those downsizing from large mainframe systems. He concentrated in
this session on debunking OpenVMS "myths" propagated in the market by
competitors or the computer press. The strategy as I "gleaned" it is:
* OpenVMS is now going to be pushed in the market as a fully
featured, robust system particularly suitable for business, fault
tolerant systems and the like.
* The OpenVMS business will be "grown", along with the other two
Operating Systems (OSF and NT).
* Any proprietary labels will be vigorous attacked as OpenVMS has just
received accreditation as conforming to XPG4 standards (something
that some Unix's have not yet achieved).
Willy Shih, VP Unix and NT Systems, SBU.
UNIX and NT Product Strategy.
The strategy is based on:
* Although the Unix market is slowing, its growth will continue to be
faster than the overall market.
* NT will become the server system software of choice.
* The PC and Mac market will continue to dominate.
* Price performance advantage provided by Alpha will continue to be
exploited.
* To be the first to apply PC industry cost structure to the
workstation and server business.
* Seamless integration of X86 at the low end to Alpha based systems
at the high end.
Bill Demmer, VP Layered Software Group.
Software Product Strategy.
Bill was assisted by Nancy Strecker, VP Digital Software Products.
Bill had a clearly enunciated strategy, however a part of his message become
lost as he was unable to tell us of planned changes to pricing and the
like due to the "in preparation" stage. He did indicate that the
current internal discussions related to a considerable simplification of
the pricing structure.
The Mission:
To provide the most competitive layered software and application suites
for the product segments targeted markets.
The Strategy:
To provide world class networked software for multi-vendor heterogenous
environments and to create market pull and leverage for Digital's
networked computing systems.
Tactics:
* In line with the other business units, the goal is high volume
sales.
* Software may be sourced or engineered outside of Digital, however
Digital will own the support of all sold layered software.
* For middleware (a difficult concept - at least it appeared to be
difficult to define - but it is the software that could, in
general, be described as the 2nd layer in the 3 layer client
server model plus the intersystem layered products) is aimed to
exploit the Digital core competencies of distributed systems,
integration, networking and scalability).
* Focus on past software successes and provide new capabilities in
these areas to protect customer investments and provide a migration
to Alpha.
* Make customer computing choices from the Digital stable work
together better than anyone else's software.
Discussion and questioning in this area got "lost" in the attendees own
specific concerns on layered software, particularly Rdb. The Digital
group agreed to take written questions and these would be replied to the
next day - if possible.
Survey and question sheets were distributed and completed.
The progress of the forum was discussed and a number of additional
concerns/items/queries were tabled for resolution. Session chaired by
Dan Burkus, Group Manager, Cross-Segment Customer Programs.
Day 2.
Opened with a review of the previous day:
* The return to profit is via volume and price for all
consumer products.
* More concentration on the installed base:
- via partners and channels
- better software and hardware for the customer base to do
business better/easier.
* CPU's will be Alpha and Intel
Operating Systems will be OpenVMS, OSF and NT
* Market Segments to be targeted are:
- Commercial space (servers)
- Technical workstations
- Market segments rather than trying to service the
entire market
- Networking
- Middleware
* Digital are focused on the enterprise (not just the desktop).
Question and Answer Sessions.
For all of the Q&A sessions, a list of questions had been amalgamated from the
previous days surveys. These would be answered in writing, after extension from
the days sessions. These, and any additional questions, will be circulated
electronically to the DECUS Leadership for refinement before general release.
The following are summaries from my notes of the sessions.
Product Support:
- There will be a move to the industry standard of providing support
(i.e. 0900 style, or 3 hours free support for a product - whatever
the "norm" is for the industry)
- Digital will support the "named" accounts.
- Telephone support will continue for the operating systems etc,
hopefully improved. Changes in time zones are recognised as a
problem to be addressed.
- There will be cost savings in quality assurance and testing by a
merging - where possible - of the code streams for all platforms.
- Tight clustering for homogenous systems (single logon style as for
VMS) will be provided. Heterogenous clusters will use DCE style
approach.
- Improved openness for software release dates. The dates distributed
will be INDICATIVE ONLY.
- Decnet Phase 5 includes Phase 4 stacks so that the transition to OSI
can be at your discretion - run Phase 5 with the Phase 4 stack as
you determine your transition.
OpenVMS:
- OpenVMS for Alpha and VAX will retain the same functionality. The
file structure will be different due to 64 bit, but at the
application level they will be the same.
- OpenVMS and OSF licencing prices will be the same i.e. at the level
Unix systems expect. Third party manufacturers are adopting this
model as well.
- Pricing will be world wide, but some local variations will apply for
some specific markets. In general the price will be the same world
wide.
- Rdb, like all the layered products, could be sold or outsourced.
Any decision in this area will be based on improved functionality
and service to the customer.
- If Rdb was to be sold, any embedded relational database features
OpenVMS requires use SQL calls, so in fact any commercial level
relational database could be used.
- Non disclosure sessions at symposia will be possible.
- For highest levels of data availability and security, the product
to be marketed is OpenVMS. Unix will also be marketed for commercial
use, and will be the best Unix on the market.
- There is no intent at this stage to make OpenVMS available on
another platform. There are features in the platform architecture
that would make this enormously expensive.
Unix and NT:
- Will be building WindowsNT into a family - reaching up to the
workstation level and corporate mission critical servers, and also
reach down to the desktop.
- Encouraging vendors and developers to use common API's for all
three operating systems.
- Digital will be working with the ISV's (Independent Software
Vendors) to speed software development.
- The homogenous clustering etc will be Digital's differentiation
for the three operating systems (i.e.scalability).
- Networking and inter-operability tools will initially provide
differentiation.
- There will be a delivery of a broad portfolio of enterprise
services on all platforms, e.g. eXcursion will be available on
NT platforms.
- There are a number of new systems in the wings.
Marketing Strategy, Mike Mancuso, Director, Channels.
Channels vision: Our vision is to distribute products and services to
the worldwide information technology market at a
reasonable price regardless of channel.
Channels strategy: To maximise customer coverage when selling, delivering
and supporting products and/or services worldwide.
Tactics:
* The pareto principle applies - 80% of revenue is from 20% of
accounts. The top accounts will be serviced directly from Digital
sales reps. Delivery may be via the channels.
* The remaining 20% of revenue is coming from 80% of the sales
expense. The channels will service these.
* Channels offer minimal cost but high effectiveness in servicing the
80% of customers from which 20% of revenue is made.
* Sales staff will be credited with sales via the channels, direct
selling to non named accounts will not accrue commission.
* There will be a known Digital person for all accounts - in 80% of
cases this person will provide Digital "ownership" and
monitoring/mediation/trouble shooting of the channel.
The day finished with an outline of the purposes of Day 3 and expectations.
Day 3.
An extensive list of questions developed for Enrico Pesatori and Bob Palmer.
Enrico Pesatori outlined his vision and mandate for the SBU. All the
strategy is based on volume of production and sales, whilst minimising
costs by selling through the channels. He also made the point that with
the downsizing of Digital, there had been no new blood recruited into
the organisation. This has been rectified.
Bob Palmer had the questions presented to him a short time before the
meeting. He did not use a prepared speech, but an "off the cuff" response
to the questions. He offered a clear vision and strategy:
* There operating systems to cover the range of required functions in
the market, operating from the enterprise wide model to high end
workstations, but in focused markets.
* Channel marketing.
* Alternative supply, or third party supply, if the functionality and
integration of products is not affected, where this affects
leverage for Digital, the supplier and the customer.
* The goal of profitability by end of the calendar year.
* A clear focus on the customer.
* Clear affirmation that VAX and particularly OpenVMS are business
areas to be pursued without apology re proprietary systems, but the
future is in Intel and Alpha systems.
* Recognition that the road ahead is not sure, but absolute conviction
that the causes have been ascertained and addressed.
* Clear analysis of the rise in the Digital share price, based on:
- Increased product penetration in the market in relation to
cheaper machines reflected in increased Q4 revenues.
- Sales of Alpha exceeded VAX in revenue for the first time.
- A reduction in gross margin can be addressed by an increase
in the channels selling.
- Any further sales or outsourcing of activities would not
affect profitability.
- Company is not in crisis, the balance sheet is still strong.
* It has not been easy downsizing the company by 31,000 people
whilst retaining support to the customers.
Corporate Communications Strategy, Charlie Holleran, VP Corporate
Communications.
Objectives:
* Restore Digital brand to industry pre-eminence.
* Reinforce Digital's reliability as a long term business partner.
* Establish Digital's ability, directly and through partners, to
implement networked platforms and applications in heterogenous
environments more quickly and more cost effectively than anyone
else.
Tactics:
* Establishment of Digital's name through a "key brand" technique.
* Key brands in Systems, Networking, Software, Services.
* A new advertising campaign.
* A new program to clearly identify the company and its products. For
example there is confusion between Digital and DEC.
Comments:
* For a long time management was "in the bunker." Digital is now a
feisty organisation, and will change structures and techniques if
they are not right.
* All senior management are now customer focused.
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% Date: Fri, 05 Aug 1994 13:05:38 -0400 (EDT)
% From: "Keith, StorageWorks Host-Based SW" <[email protected]>
% Subject: Notefile BUSINESS_PRACTICES Note 432.38
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| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 3307.1 | Say yes, or say goodbye | POBOX::CORSON | Higher, and a bit more to the right | Fri Aug 05 1994 14:57 | 6 |
|
There you have it, folks. Once our middle managers get the message
we will be on our way. It is no longer Club Digital, or a "cult" - we
are going to be a business. And be run like one. It is about time.
the Greyhawk
|
| 3307.2 | Wonder is they got receipts? | SYORPD::DEEP | ALPHA - The Betamax of CPUs | Fri Aug 05 1994 16:09 | 3 |
| Of course, this could just be a corporate boondoggle to New Zeland! 8^)
Bob
|
| 3307.3 | Specifics | CSOA1::GILBERT | | Fri Aug 05 1994 17:31 | 7 |
| Customers buy specific lines items from a quote not business
architecture plans. With the recent turmoil at Digital my customers
are only sure that we will continue to make and sell Intel and Alpha boxes.
They question our commitment to all software products, network giblets,
printers, and disk. And those items drive the sale of the boxes in
some cases. IMO senior managment needs to be very clear about what
specific products we sell now and will in the next 6 months.
|
| 3307.4 | tenth tier | ANNECY::HOTCHKISS | | Mon Aug 08 1994 04:27 | 3 |
| It's a good report and shows we are in business-the customer focus bit
is a little strong as is the 'third tier' management changing the
message-what about the tenth tier..?
|
| 3307.5 | | VANGA::KERRELL | Hakuna matata! | Mon Aug 08 1994 05:09 | 8 |
| re.2:
>Of course, this could just be a corporate boondoggle to New Zeland! 8^)
Except it was in the U.S., and included DECUS representatives from all over
the world.
Dave.
|