Conference 7.286::digital

It's ironic that BP Mentioned that he owed it to the shareholders
of DIGITAL to go ahead with the lawsuit and now the shareholders
are (some of them anyways) appear to be rebelling.

/Mario

    
    Also interesting that our stock has not dropped since the Intel law
    suit .. still at around $35-$36. Also interesting is that a shareholder 
    with apparently only a few hundred shares can stir up so much poop .. 
    kind of makes you wonder what his real intent is or maybe even
    who is behind him ?
    
    p.s. re: Intel pulling plug on chips .. right, just remember that their 
    manufacturing operations folks run an old reliable system called
    OpenVMS, so does that give you an indication of how much they need us?
    
    No sense listening to press on this as the positioning for Cust mind
    share is only going to get a lot crazier ..
    
    Regards,
    
    / Kerry

>p.s. re: Intel pulling plug on chips .. right, just remember that their 
>manufacturing operations folks run an old reliable system called
>OpenVMS, so does that give you an indication of how much they need us?
    
Perhaps shareholders are less impressed with the few piddly VMS licenses
and are instead concentrating on things like 25% of DIGITAL's revenue,
or DIGITAL's largest contract, etc. that are now heavily at risk.
K

    Lynn,
    
    >>
Perhaps shareholders are less impressed with the few piddly VMS licenses
and are instead concentrating on things like 25% of DIGITAL's revenue,
    >>
    
    Apparently, those "piddly VMS licenses" run Intel's entire chip 
    manufacturing processes - of course, that's only a minor consideration 
    in all of this .. I am sure they can get OpenVMS support from Microsoft 
    or Dell or Compaq or ???
    
    :-)
    
    Regards,
    
    / Kerry
    
    

    >p.s. re: Intel pulling plug on chips .. right, just remember that their 
    >manufacturing operations folks run an old reliable system called
    >OpenVMS, so does that give you an indication of how much they need us?
    
    [Copied without permission]
    San Jose Mercury News, Monday, June 2, 1997
    
    Challenge your Technical skills at Intel.
    
    VAX/VMS system Administrator
    
    You'll be a member of the system management team in a 24-hour by 7-day
    manufacturing and development environment, providing day-to-day system
    support.  Areas of support will include system tuning, account
    management, system security/performance monitoring, office automation
    and network support, new system installation, software upgrades and
    maintenance contract management. Require a BSCS or equivalent and 3+
    years' experience managing OpenVMS cluster system in a large-user
    environment.  Also requires experience evaluating new systems; managing
    disk configurations; DECNET , LAT and TCP/IP network; and experience
    with I/O balancing and disk backup strategies.
    
    /Thien
          

    re .4
    So the point you're *trying* to make is you believe that DIGITAL
    can shut down Intel's FAB plants since they use VMS?
    
    You've actually convinced yourself of that, huh?
    ;-)
    K  

    The issue is not technology etc., it's the lack of ability of an
    excellent technology to engineer, market and sell its products. There
    is enough blame to go around in all of those functions mentioned - but
    mostly at levels which should be positioning and creating sustainable
    revenue growth - not just spreadsheet blips.
    
    Yah, spreadsheet blips are nice and needed to survive from now to then,
    but we don't have a long term, viable strategy that is generating lots
    of money and growth.  Period.
    
    Now, would YOU be happy if all of your retirment funds were in DIgital
    stock?  If no, then we should probably be doing something to make it
    more attractive etc. as well as secure our own futures.
    
    Too many strategies, false starts and retrenches.  I keep saying that
    the folks up top won't notice the dance is over until the money runs
    out....
    
    

    Re: Now, would YOU be happy if all of your retirment funds were in
    DIgital stock?
    
    I certainly hope no one has all of their retirement funds in
    ANY one security, particularly not the security of the company
    they work for, since that's a huge problem in terms of
    non-diversification.
    

    RE: .7 and .8
    
    I believe Jon was using an extreme example to show how upset some
    shareholders can be at our stock's performance, rather than expressing
    an actual situation that he may be a part of.  At least I hope you
    were, Jon.
    
    Now that I've stated the obvious, let me make a few points around some
    of the previous messages.  The number of shares that a Provident or any
    other group has that may mount a shareholder revolt is irrelevant.  It
    can be as low as one share, or millions.  Companies try to discredit
    those organizations that have low share volumes, insinuating that
    somehow they have lesser credibility than those holding larger amounts. 
    But let's face it - Provident's holding were just what they needed to
    get into the dance.  They are tapping a groundswell of anger that has
    rightfully arisen due to our company's performance.  You might not
    agree with their tactics, you might not agree with their ultimate aim
    in all this, but you have to agree that they have a lot of history
    working in their favor.
    
    Personally I feel that Bob Palmer is a very capable CEO, and in the
    right situation would have been exceptional.  But his tenure at DIGITAL
    indicates this was not the right situation, and he needs to take the
    heat for it.  Shareholder value has nosedived during his reign, which
    is particularly galling since our industry and the markets in general
    have performed so admirably during this same time.  His renumeration
    during this period, particularly during the past year, is also
    unacceptable to many shareholders.  $8+M, as either Business Week or
    the San Jose Mercury News stated previously, is too high in anyone's
    book for the performance of this company's stock during 1996.  If Bob
    and the Board, and also the top management team, are feeling heat from
    Provident's actions, it would appear justified to this author.
    
    I guess the only thing I find funny is that with the large institutions
    still holding our stock (e.g. Prudential Investments), that this kind of
    "revolt" wasn't initiated earlier.
    
    Chuck                                                  

    re .9
    
    
   > Personally I feel that Bob Palmer is a very capable CEO, and in the
   > right situation would have been exceptional.  But his tenure at DIGITAL
   > indicates this was not the right situation, and he needs to take the
   > heat for it.  Shareholder value has nosedived during his reign, which
   > is particularly galling since our industry and the markets in general
   > have performed so admirably during this same time.  His renumeration
   > during this period, particularly during the past year, is also
   > unacceptable to many shareholders.  $8+M, as either Business Week or
   > the San Jose Mercury News stated previously, is too high in anyone's
   > book for the performance of this company's stock during 1996.  If Bob
   > and the Board, and also the top management team, are feeling heat from
   > Provident's actions, it would appear justified to this author.
   >
    
    	I personaly have no data to base a conclusion about Bob Palmer's
    ability to be CEO other than what I have seen. If he were a good CEO,
    he would make the situation 'right'. 
    	I wonder if there was a schedule set for our turn-around. Even a
    loose one. I know that here in the trenches, if you don't meet
    schedule, you are at least re-assigned. It would at least seem that the
    compensation should fit the results.
    	It's time for something new.
    
    ed

>Perhaps shareholders are less impressed with the few piddly VMS licenses
>and are instead concentrating on things like 25% of DIGITAL's revenue,
>or DIGITAL's largest contract, etc. that are now heavily at risk.

    Given the following statement:
    
          "A spokesman for Intel said that,       
          contrary to news reports last week,    
          Intel had not said that it would stop  
          selling Digital chips. If it could     
          not reach a new agreement, he said,    
          Intel might simply make Digital buy    
          chips from an Intel distributor        
          instead of selling to it directly."
          
          [�New York Times Company]
    
    
    Why would we be at risk of being able to sell Intel based systems?
    
    -Bruce
    
              
    

    re: .8
    
    Karen,
    
    If you were HP, CISCO, COMPAQ, SUN or DELL (or even IBM) I suspect that
    your non-diversified position would be SUBSTANTIALLY better than if it
    were DIGITAL.  THAT is the stockholder issue.
    
    As far as my retirement funds...of course they're diverse....diversity
    rules, this is (after all) the 90s (grin),
    j

    
    THE stockholder issue is that The Board & Senior Management, after 
    five years of dismal performance, turned down the Compaq offer of 
    nearly double the share price.
    
    Imagine you have a property for sale and your [real estate] agent 
    turns away an offer for almost double the next best offer -- and 
    does not even tell you. 
    

    >>>
    Imagine you have a property for sale and your [real estate] agent 
    turns away an offer for almost double the next best offer -- and 
    does not even tell you. 
    >>>
    
    Another way of looking at it might be - how would you feel if a 
    relative came up to you and said that he had sold the house you had
    lived in for 30 years - even if he had received a good price?
    
    Especially when you know the person buying the house only wants the 
    land it is on and plans to rip it down ?
    
    Does anyone think that Compaq would not have kept the good stuff and
    threw out whatever was left ?
    
    Regards,
    
    / Kerry

    On the house & real estate agent analogy, who cares what happens to the
    house after its sold!!!
    
    If its ripped down , renovated, rebuilt its the perrogative of the new
    owner, similarly with a business no matter how big!
    

>    On the house & real estate agent analogy, who cares what happens to the
>    house after its sold!!!

The tennants.

+Mark+

We are not the tennants.  We are the hired help.

    RE: .15
    
    Kerry,
    
    Don't kid yourself.  I have never seen any press, either inside or
    outside Digital, that hinted that the reason the Compaq offer was
    turned down was because management was concerned about us "tenants"
    living in the house.  On the contrary, the press/rumors indicated its
    was because the existing Digital landlords would no longer have been
    the landlords of the house (with our company's performance compared to
    Compaq's, why would they have thought it would have played out any
    differently?)
    
    Chuck

    >> THE stockholder issue is that The Board & Senior Management, after 
    >> five years of dismal performance, turned down the Compaq offer of 
    >> nearly double the share price.

The board and senior management are supposed to act in the best interest of 
the stockholders.  They must give consideration to all serious purchase offers 
and evaluate them with that -- and only that -- in mind.  Given the 
performance of this management over the past 5 years, I think they have a 
valid issue.

    re: Intel and OpenVMS reliance ...
    
    After talking to a friend of mine that sells HP, it turns out that the
    Digital lawsuit may be a bonanza for him. He's already got things in
    motion to wholesale replace the VMS clusters running Workstream (the
    shop floor control system used by Intel fabs) with HP systems running
    newer versions of the software. Many of the Intel IS managers who were
    previously loyal to DEC have had a sudden change of heart, especially
    after hearing their some of the language Digital used in the lawsuit.
    
    Overall, HP probably has the most to gain out of this whole thing,
    especially as it comes on top of their new friendship with Microsoft.
    They are firmly lined up with the dominant computer architecture, OS,
    and software products on the market; some by alliances that have been
    years in the making. HP stockholders and employees enjoy a level of
    success and satisfaction that Digital saw only fleetingly in the late
    1980's, and their corporate strategy and leadership seems to have
    things well plotted out for the next few years as well.
    
    I can only hope that there's someone out there in Digitaland that is
    signing up lots of new customers and applications to replace the ones
    that are getting lost in this little set-to ...
    
    Geoff

re .21

There is another side to the picture presented in .21

I talked with a customer from a Fortune 500 company that has a stated
goal of eliminating Digital from the account.  Their take on the lawsuit,
that it introduced uncertainty regarding deploying NT on Compaq, and
NT on Digital would be given a fresh look.

Ram

    Re lawsuit:
    
    We had better be able to win it.
    
    

    
    .21 re: HP .. Since apparently one of the goals of the law suit is to 
    ensure that our technology is not used in the Merced chip - a key 
    component in HP's future strategy, they should be concerned.
    
    Re: replacing Intel OpenVMS prodcution systems with HP-UX. If one
    considers the issues, then one realizes that at best they would be
    looking at a 2-4 year plan - one that replaces all their operations
    folks  (how many OpenVMS types know UNIX?). Getting this many new 
    operations personnel with senior system mgmt skills would mean the
    big O word - outsourcing.
    
    Now, I wonder how the Intel OPS folks would like this plan ?
    
    The HP replacement stuff is just more rhetoric .. HP trying to put
    a positive spin on something they are likely very concerned about ie.
    Merced delays.
    
    Regards,
    
    / Kerry

    >    Re: replacing Intel OpenVMS prodcution systems with HP-UX. If one
>    considers the issues, then one realizes that at best they would be
>    looking at a 2-4 year plan - one that replaces all their operations
>    folks  (how many OpenVMS types know UNIX?). Getting this many new 
>    operations personnel with senior system mgmt skills would mean the
>    big O word - outsourcing.
>    
>    Now, I wonder how the Intel OPS folks would like this plan ?


    Intel like Digital has added a large amount of VMS code around
    Workstream/Classic. To replace Workstream/Classic with the newer
    Workstream/DFS or Workstream/Open would be a huge project that would
    affect productivity during a long transition.  

    One of the reasons Workstream/Classic is still very popular in the
    industry because it is so expensive for an existing FAB to move away
    from it.  Motorola uses a product called PROMIS(also runs on VMS) in
    all it's FAB's except one, the FAB Digital sold them.  They looked at
    converting the fab over it, and found the downtime to the facility
    would be more costly than running SQF with Workstream.    

    I think .21's friend wants to take advantage of this, but I doubt he/she
    will be successful.

    -Bruce