Conference 7.286::digital

    Revenue per employee is an indicator of how vertically integrated the
    company is.
    
    A company that simply assembles components made by other companies and
    adds value through mass marketing will have a very high revenue per
    employee.
    
    Digital is structurally going to have low revenue per employee
    
    design: we do a lot of our own chip design
    
    manufacturing: we have a lot of captive manufacturing capacity
    
    selling: we have few high volume channels and no mass marketing
    channels
    
    Outsourcing design, manufacturing, and selling is going to cause a lot
    of conflict.  And as you know, Digital values the absence of conflict
    more than it values results.

>                     <<< Note 1149.0 by COOKIE::LENNARD >>>
>    This is a very important metric and who's kidding who???

Revenue per employee,  by  itself, really is not all that important.  It's just
another statistic, another way of looking at a company's performance.

As  we all should be painfully aware by now, increased revenues  are  met  with
resounding  yawns  from  Wall  Street  when the expenses have continued high or
increased by a higher factor.  Since we are on a drive to reduce those expenses
while  increasing revenue, a more meaningful  statistical  indicator  would  be
EARNINGS per employee (revenue less expenses).  Even using that metric alone is
unreliable,  however it should indicate how successful we are in  reaching  our
goals.

Dave

    re .0
    
    What Ken said was that we give away of a lot of services that the other
    companies against which we are compared charge for.  His point was that
    we would look much better is the revenue we don't collect now were to
    be included in our 'rev per emp' calculation.  He added that we are now
    trying to figure out how to charge for some of our currently free
    service.
    
    I have no opinion here.  I just wanted to clarify what he was saying.    

    First discussed in this conference back in topic 49. I think it's
    been talked about at length in an other topic but I can't find it
    right now.

    			Alfred

Re .3: Well, the customer I'm dealing with wonders why we charge for things 
       that other vendors DON'T charge for. In comparison to our competition 
       in the production mainframe business, we're perceived as 
       nickel-and-diming the customer.

	Conversation overheard at major customer site a few months ago:

	VAX I.S. Manager: "This is Digital's quote for the VAX consolidation"

	IBM I.S. Manager: "Wow! Our vendors' are only a couple pages...
			   Does DEC charge for the knobs and switches?"

This may all be a matter of perception because we unbundle so much. Its likely 
that they're paying for the same services from other vendors, but those 
vendors don't break it out to the detail we do. Certainly this has its pros 
and cons. At the customer I support our level of detail on quotes and order 
forms is not viewed positively.

Jim

    regarding -.1
    
    I think they were talking less about product and more about things like
    free consulting services.  I have heard stories about the types of
    thinks that getted rolled under 'Technical Support to Sales' that wind
    up providing to customers expertise that we could probably sell them.  
    
    I must admit, however, that when I see a price for a software product
    and then I still have to buy the license, I get little annoyed.  I know
    that this might be necessary for VAXes, but for WPS-DOS?  Seems a
    little bizarre to me.
    
    LI