Conference 7.286::digital

DIGITAL strengthens sales, marketing ...        
Page   1 of 2  
              DIGITAL strengthens sales, marketing operations 
   
         DIGITAL Chairman Bob Palmer today announced implementation of the 
   next steps to strengthen the company's sales and marketing operations, 
   further align the company's management and resources behind its 
   corporate strategy, and do business with customers and partners in a 
   more uniform manner.
         The changes include consolidation of the sales and marketing 
   operations of the company's Personal Computer Business Unit and its 
   Systems Business Unit into a single organization.  This new worldwide 
   organization will be focused on providing fully integrated solutions to 
   meet customer needs.  The company also announced the formation of the 
   DIGITAL Products Division, which will place the company's product-
   related activities into one organization.
         "The  DIGITAL growth strategy is based on one mission of 
   delivering with our partners networked business solutions based on 
   high-performance platforms and services," said Chairman Bob Palmer.  
         "The changes announced today put us in a stronger position to 
   execute against this strategy," he said.  "They are designed to 
   strengthen support for our current model of direct and indirect sales 
   and will be implemented in a way to avoid disruption at the customer 
   level.
         "The single most important benefit to our customers will be 
   DIGITAL's significantly improved capability to provide integrated 
   solutions through a worldwide sales and marketing organization, 
   supported by sharply focused products and services divisions," he said.  
         Palmer said Bruce Claflin, who currently leads the Personal 
   Computer Business Unit, will become vice president and general manager 
   of Worldwide Sales and Marketing.  This solutions-focused organization 
   will provide customers and partners with a full range of products and 
   services.   
         Bobby Choonavala, president of DIGITAL Asia Pacific, and Hans 
   Dirkmann, president of DIGITAL Europe, will report to Claflin.  They 
   will continue to be responsible for overall business operations in 
   these geographies. 
         Harry Copperman, who currently manages the Systems Business Unit, 
   will become vice president and general manager of the new DIGITAL 
   Products Division that combines all business unit product-based 
   activities.  This includes systems and software built on the Intel and 
   Alpha architectures.  DIGITAL Semiconductor and Network Product 
   Business remain fully integrated business units and will report to 
   Copperman.
         John Rando continues as vice president and general manager of the 
   DIGITAL Services Division, which includes three business units:  
   Multivendor Customer Services, Network and Systems Integration Services 
   and Operations Management Services.
         Bill Strecker will serve as technical director of the products 
   division, reporting to Harry Copperman.  Strecker continues to report 
   to Bob Palmer as Chief Technical Officer and vice president of the 
   Corporate Strategy and Technology group.  
         Claflin, Copperman, Rando, and Strecker continue as members of 
   the DIGITAL Executive Committee.
         Palmer said implementation planning will begin immediately and 
   the new organization will be effective July 1.  Cross-organizational 
   teams are working to define needs and devise organizational structures 
   that best support the groups.  "In the interim," he said, "it is 
   essential that all managers and employees stay focused on their current 
   responsibilities and commitments to deliver the Q4 plan."  No 
   restructuring charge or major staff reductions are expected to result 
   from these changes.  The changes do not affect AltaVista Internet 
   Software, Inc. or the corporate functions.
   
  Charlie Christ to retire 
   
         Bob Palmer also announced that Charlie Christ, vice president and 
   general manager of the company's Components Division, has announced his 
   intention to retire effective July 1, 1997.   
         "Charlie Christ built the company's storage product portfolio to 
   one of the best in the industry," Palmer said.  "In addition, he 
   provided leadership to our Network Product Business in the 
   manufacturing of high performance network components.  Most recently, 
   he has been instrumental in supporting DIGITAL Semiconductor's volume 
   Alpha and StrongARM strategy.  During DIGITAL's transformation, Charlie 
   took the lead in helping us to identify key partnerships and 
   divestments.  We wish Charlie the best in his retirement."

    >> DIGITAL Chairman Bob Palmer today announced
    
    
    Nice to see the 1st we hear about it is in a notes conference!

WSJ:Digital Equipment Promotes Claflin In Reorganization

 

  NEW YORK (AP-Dow Jones)--Digital Equipment Corp. (DEC) Chief Executive Robert
B. Palmer, unhappy with the company's lackluster performance, is planning a
management reorganization that will vault Bruce L. Claflin to the de facto No. 2
position at the company, say people familiar with the plans, reports Wednesday's
Wall Street Journal. 

  The expected move, which could be announced as early as Wednesday, is the
third major structural overhaul Palmer has devised since taking over at Digital
in 1992. 

  Digital has all but missed out on the latest round of growth in the computer
industry, and the shake-up reflects Palmer's growing dissatisfaction with the
company's performance, according to people who have heard his views. 

  The latest plan will abandon the structure that Palmer put in place three
years ago, under which top managers generally have responsibility for separate
products, sales of those products and other support functions in eight discrete
business units. 

  In its place will be a more traditional structure in which power will be more
concentrated and roles will be divided more according to functions. 

  Under the new plan, Claflin, currently vice president in charge of Digital's
personal-computer business unit, will be given control of the lion's share of
the company's sales and marketing functions. Most of Digital's products -
including computer servers, work stations, PCs, networking gear and storage
devices - will be sold by the group he is expected to head. 

  Palmer, who is chairman, chief executive and president, has declined to
appoint a No. 2 executive after the resignation last July of Enrico Pesatori,
formerly head of the company's computer operations. 

  The latest reorganization doesn't designate a successor, but it does clearly
position Claflin, who is 46 years old, as the second most powerful executive at
the computer maker, which is based in Maynard, Mass. Claflin joined Digital in
1995 after a 22-year career with International Business Machines Corp. 

  A Digital spokesman declined to comment on any reorganization. 

  The expected move stands to remove responsibilities from Harold Copperman, a
vice president and head of Digital's systems business unit who is now
responsible for sales and marketing of systems based on Digital's flagship Alpha
processor. 

  Copperman, who came to Digital in 1993, is slated to oversee manufacturing,
engineering and development, say people familiar with the new structure. 

  Also leading units will be John J. Rando, who keeps the top job at Digital's
computer-services sector; and William D. Strecker, who remains in charge of
technology and strategic planning. 

  Charles F. Christ, once viewed as a successor to Pesatori and currently in
charge of Digital's components division, apparently loses out in the
reorganization, keeping his vice president's title but losing responsibilities. 

  The restructuring reflects Palmer's dissatisfaction with sales performance.
Digital, once the No. 2 computer maker behind IBM, last year slipped to the No.
4 slot, trailing Compaq Computer Corp. and Hewlett-Packard Co. in sales. 

  (END) AP-DOW JONES NEWS 02-04-97

  0600GMT

(AP-DJ-04-02-97 0600GMT)
:TICKER: DEC
:SUBJECT: DI1 RSTR DI3 DI2 MA COMP
Copyright (c) 1997 Dow Jones and Company, Inc.
Received by NewsEDGE/LAN: 4/2/97 2:25 AM

    ....yawn...
    

    Is that why the stock is 25 and change?
    
    .mike.

Re .3

I first heard about from a memo forwarded from my management chain
and that was fairly early this morning, maybe another process
broken in your area?

    
    	RE: .5
    
    	I think it's almost time to prepare the third envelope.
    

    re: .8
    
    Nobody likes the hand dealt, so the cards get shuffled.
    I wonder if a new deck has been considered?
    
    Hmmmm???
    

For some reason, this brings to mind a newspaper column i read once reviewing
a supposedly big important speech by President Carter.  It carried the title:
"More Mush From the Wimp".

- paul

And they called Reagan the "Teflon President".

-OFWAMI-

    Re. 5273.15
    
    I wonder how an outsider can publish the news about Bruce early March
    whilst DEC only announced it officially yesterday (almost a month
    later).
    And after this reorg there will come another, and another ... until we
    (hopefully) will make ONE company again.
    
    Frans

    .5 got it right. 
    
    So we have a strategy for growth but we are getting smaller. The Q3
    results will tell their own story. How long can this go on?
    
    ..Kevin..

	re: reorgs


	A Japanese company and an American company had a
	boat race; the Japanese won by a mile.  The Americans hired
	analysts to figure out what went wrong.  They reported that the
	Japanese had one person managing and seven rowing, 
	while the Americans had seven managing and only one 
	rowing.  The American company immediately restructured
	its team.  Now they had one senior manager, six management
	consultants and one rower.

	In the rematch the Japanese won by TWO MILES.  So the American
	company fired the rower.

    .14
    
    except the companies who are nailing us are, for the most part, also
    'American'. Just different Americans.
    
    
    

re: .13

>    So we have a strategy for growth but we are getting smaller. The Q3
>    results will tell their own story. How long can this go on?
    
Clearly it will go on until the current BOD is unseated and replaced by a
slate that those shareholders who are neither hibernating nor otherwise in
la-la-land can support.  "No excuses management" seems to exempt the top
layer (BOD and President) and only rattle the birdcage over mistakes made
in implementing the strategy of 6-12 months back.  This leaves us always
in reactionary mode, since none of our strategies are forward-looking but
rather backward-looking.

I mean, the consolidation of all sales and marketing would've been great
a year ago...it certainly looks like an attempt to address some of the
insane business practices and metrics that have been highlighted in this
conference.  But we always seem to be refighting the last war rather than
looking forward to the present or future one.  Our whole raison d'etre for
Alpha came out of lacking a credible RISC chip when UNIX hot boxes were
the order of the day.  But rather than successfully push Alpha for the
UNIX hot box market, we tried to make it a successor to VAX and then tried
to shift over into the NT market.  But there's no evidence that people
really want an NT hot box that doesn't have the Intel label, because we're
out of the "open systems" fad that made UNIX hot boxes so fashionable and
back into the "best in class"(gag)/"safe bet" proprietary model that we
and IBM did so well with for so many years--except now "best in class"
means NT (dubious, i know) and "safe bet" means Intel.  Unless Intel (or
MS) really blows it with Merced and requires a recompile of all 80x86 apps
(the way we DID with Alpha vs. VAX, and the way Apple DIDN'T with PowerPC
vs. 680x0), we stay stuck in a "not enough market share to make it safe" bind.

The shareholders really need to scrutinize these issues before next
November's annual meeting.  The question is, are these issues being made
visible to the large shareholders who really should worry about their
investment in the course set by our current BOD?  The issues the European
Works Council raised were meat-and-potatoes ones about whether Digital was
killing itself via downsizing.  Those are good supporting issues, but the
big shareholders are likely to overlook them unless the centerpiece issue
of our lack of a credible strategy that can really be executed is raised.

- paul

    >Clearly it will go on until the current BOD is unseated and replaced by
    >a slate that those shareholders who are neither hibernating nor otherwise
    >in la-la-land can support.
    
    Are there any modern examples of this having happened ? How does it come
    about ?
    
    I would agree with a lot of your analysis, although I think the EWC
    also complained bitterly about the dismantling of high profit margin
    service activities just when the market is crying out for service and
    everyone else is investing in them. It is ironic that one of the things
    mentioned in the HP MS alliance is that HP have the qualified personell
    to service the market. We blew several billion $ laying off people who
    could have provided the resources for a strategy for growth.
    
    It is right though that it is not enough for shareholder's
    representatives to ask questions and complain. They will have to play
    hardball if this company is going to be saved. 
    
    Also, it is not just that we have made some weak decisions in the past
    and hang behind the market. The company has a leadership problem. I
    came to that conclusion after attending the Shareholder's Meeting in
    November and reading the company results in January. There is such a
    contrast between the two, and such a short time between the two events,
    than my conclusion is that the leadership of the company has lost its
    grip of the company and is either incompetent or plain stupid. If you
    don't know in November pretty well how you will do in q2 then you are
    not watching things properly. And if you know the score in November,
    then why  waffle on about great prospects for growth etc. If you do
    that, then noone will believe you any more. That is a liability in the
    market, and the real reason why our shares are now at $26.25. The
    street and the market simply don't believe a word we say.
    
    Quite why the senior management is not functioning is not clear to me,
    but there must be a lack of communication and Esprit de Corps,
    otherwise the fiasco of last November would not have happened.
    
    ..Kevin..  
                                                             

        Is it possible that what Digital has is incompetent (or
        apathetic) ownership?  Or does our ownership just not care
        about the value of the stock they hold?

        Bob

    Might as well be that not everyone is sharing in the doom and gloom
    scenario prevailing in these notes. There are good reasons to hold DEC
    stock, especially with a medium to long term view.
    
    Your mileage may vary, of course.
    
    Klaus

    RE: .17
    
    
    "If you don't know in Novemeber how you will do in Q2, then you
     are not wathings things."
    
    
    This has been proven, think about it. This is the quy who said
    at he employee update two years ago:
    
    	"we really blew it, we did not see the 183 million dollar
    	loss coming"
    
    Should have been tarred, feathered, right then and there.
    Accountability, thats just for us grunts down below.
    
    My .02 worth;
    dt
    

    The chances of a shareholder revolt saving the day seem unbelievably
    remote. There is no vehichle to get many of them aware of the problem,
    but if we did then all they could do is vote out a fraction of
    the board at next Novembers meetings. That fraction of new directors
    would have to attend some board meetings before they could develop any
    effective influence over the whole board.
    
    It would be 2 or more YEARS before any serious change could occur. The
    company will be long gone before that occurs.
    
    I noted the recent re-org announcement used 'Chairman Palmer' several
    times. Is the borad trying to tell us again how much confidence they
    have in their Chairman?

    
    Is this sales force re-org going to have the same results as the last
    one?
    
    ed

	I doubt that the "re-apply for your job" fiasco will happen
	anytime soon. (But look for it in about 5 years when everything
	old is new again!)
	
							mike

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From: "Terry C. Shannon" <[email protected]>
Subject: The Worm Turns at DIGITAL
[other header removed]
Organization: Shannon Knows DEC: The Newsletter That Takes No Prisoners

The following appeared on the newswire this morning.


DIGITAL strengthens sales, marketing operations

....further aligns business with growth strategy.... 

MAYNARD, Mass., April 2, 1997 -- Digital Equipment Corporation today....
[See official press release posted elsewhere in this conference]


Briefly:

o Palmer retains all three hats.

o This is Palmer's third MAJOR reorg. Either third time's the charm, or
Palmer will find himself sans chapeau.

o Claflin gains power. Probably the best guy at DEC to handle the
marketing mess.

o Copperman sidelined from sales and marketing roles.

o Rando continues in current role.

o Charlie Christ, who has made many significant contributions to
Digital, will now go off to make significant contributions elsewhere.

Terry Shannon
Publisher, Shannon Knows DEC
[email protected]

    re: shareholder revolt and BOD turnover
    
    The reality is that these events do happen, we just don't usually
    recognize them as such. We know them by their common names: "merger"
    and "takeover". Somebody else will finally determine that Digital as a
    company has some things of value that are being squandered, and will
    move to take control of them. I somehow doubt that the current BOD and
    management would be retained in any case.
    
    Geoff

re: .25
    
>    The reality is that these events do happen, we just don't usually
>    recognize them as such. We know them by their common names: "merger"
>    and "takeover".

Yes, maybe if we could get the WSJ to bad-mouth us the way they do Apple,
that Saudi prince Alaweed(?) would buy up a bunch of *our* stock. ;-)

Probably the tactic for dissident shareholders would be to try to get someone
(like Compaq) that has expressed interest in us before to assume the "white
knight" role.  And maybe bring someone like KO over to their side for P.R.
value.  It could be do-able the way things have been going...not sure how
much the poison pill could be used as a counterweapon with the stock so low.

- paul

    re: .26
    
    Ah yes, the poison pill. I remember when that went to the stockholders
    (like me) for a vote some years ago. I recall that it gave the BOD
    power to issue something like stock options at some artificially high
    price, but that's about it. Anyone still remember exactly how it was
    supposed to work, and exactly who it was supposed to protect from what?
    
    Geoff

Am I the only one who sees this as good news?

We are merging all of the Sales activities into a single team, as follows:

>	"The single most important benefit to our customers will be 
>DIGITAL's significantly improved capability to provide integrated 
>solutions through a worldwide sales and marketing organization, 
>supported by sharply focused products and services divisions," 
>[Palmer] said.  
>
>	Palmer said Bruce Claflin, who currently leads the Personal 
>Computer Business Unit, will become vice president and general manager 
>of Worldwide Sales and Marketing.  This solutions-focused organization 
>will provide customers and partners with a full range of products and 
>services.   

The key phrase is "full range of products and services".  The way I hope
this will be implemented, and what gives me so much optimism about the
future, is that all Sales Reps will get full sales credit for every
Digital product and service, every one of which will count equally toward
their budget.  This is the way it used to work when we were profitable,
and is IMHO one of the reasons we are not profitable now.  See Fred K's
superb analysis elsewhere in this notesfile for the connection between
workstation and server sales for an example of this.

I don't share the general pessimism that this is a bird-cage re-org.
Clearly there are winners and losers.  But the people who have made
the most difference are the winners (ie, Claflin)!

And I don't share the oft-repeated feeling that the SLT can't implement
this plan successfully.  The problem with the last two re-orgs was that
the SLT implemented the plans very successfully, and the plans worked
exactly as everyone in the field predicted, but that no one on the SLT
understood the exact results that would occur.  See my earlier notes 
here and in the SBU notes file around the results of not giving Sales
Reps credit for workstations and Intel servers (he says, immodestly).

So if the SLT implements this plan as successfully as they implemented 
the last two plans, it will deliver the results implicit in the plan.
The difference here is that this plan accurately reflects market realities,
how Sales Reps really work, and how our customers wish to buy from us.

This is the best news I have heard in a *long* time...  I am only sorry 
we are waiting until Q1FY98 to implement it.

-- Ken Moreau

|This is the best news I have heard in a *long* time...  I am only sorry 
|we are waiting until Q1FY98 to implement it.
    
    This delay is apparently there to minimise any perturbation to the
    expected magnificent Q4 numbers.
    
    John.

    Reengineering will be complete on July 1: we'll be back to the good old
    days/years, which may be a very good thing for the company. If the
    above assertion is valid, two questions will still linger on: what is the 
    great reengineering exercise really about and what other strategic 
    decisions made over these years should be un-done as well?

re: .28

>Am I the only one who sees this as good news?

No, i think you're right that consolidation of sales and marketing is a
needed step.  It's late in coming, because we've been in the "downsize and
divest" mode for so long (TOO long).  But it does try to address the broken
processes and metrics that have been documented here many times.

My only concern is that we can't seem to get out of this catch-up mode of
redoing the last reorg to make it right this time (even the initial CBU/PBU
thing was a retooled version of KO's NMS).  And even if we have the sales
and marketing organization structure right this time, do we have a credible
strategy for them to sell?  Can we make our hardware differentor stand up in
a world that's largely happy with the market share leaders for hardware and
is looking for software and system integration differentiation instead?

The announcement itself is a step in the right direction.  But if i was a
big (rather than little) shareholder, i don't know that it would allay my
sense that the BOD has been timid and myopic in its oversight of getting
this ship turned around.

- paul

    Yeah,
    
    This joining of forces was long expected by employees and customer
    alike; finally a move in the right direction, provided it will be
    correctly implemented.
    
    A couple of questions:
    
    . Is it part of a reasonable, longlasting strategy or just happened
      by accident ? (You see, avery one out of three sick person recover
      whatever the doctor's prescription)
    
    . If it's part of a strategy, how come it took so long to get out ?
    
    	Ezio, a usually-read-only noter at home for sickness.
    
    

    
    >       "The single most important benefit to our customers will be
    >DIGITAL's significantly improved capability to provide integrated
    >solutions through a worldwide sales and marketing organization,
    >supported by sharply focused products and services divisions,"
    >[Palmer] said.
    >
    
    let's hope it will be implemented alike... the fight over fief-dooms
    will be prolonged, the roles of MCS / OMS NSIS sales & marketing roles will
    be clarified/ or not...
    
    if the implementation per se will be o.k., we still have a chance to
    blow it via metrics & compensation...
    
    the real benefit will be in the tremendous synergy effects (we would'nt
    have without the last couple of re-org's) ;-)