When you're No. 2, as Avis used to say, you have to try harder. So it is with Digital Equipment Corp.
Not that Digital is apologizing for its $11 billion in sales last year. It's just that this No. 2 computer company has set its sights on ousting No. 1 - International Business Machines Corp. - from the top spot.With sales last year of about $50 billion, IBM doesn't have to start looking over its corporate shoulder just yet. But with a growth rate of 20 percent per year (IBM's is less than half that), Boston-based Digital Equipment Corp. hopes to close the gap before the 20th century logs off.
And Utah is going to share in the chase, saidLarry R. Goodwin, vice president of Digital's western sales area, headquartered in Santa Clara, Calif. Goodwin said Digital opened a small (six employees) office in Salt Lake City in 1982 that today employs 120 and will do $50 million in sales this year, up from $10 million only five years ago.
"Our operation here has been very successful," said Goodwin in an interview this week. "And we intend to continue investing in Salt Lake City." Salt Lake is headquarters for a five-state district in which Digital expects $90 million to $100 million in sales this year, half of that out of the local office.
Does this success mean that Digital might consider Utah as a site for one of its manufacturing plants? "We're now in the process of decentralizing," Goodwin told the Deseret News. "It's certainly a possibility that, for the future, we could place something here in Utah."
In the meantime, he said, the Salt Lake operation will beef up its local office with yet more new jobs, he said.
Digital's Salt Lake field office does marketing and provides technical support for its wide range of computer hardware and software. Its Utah clients include Kennecott, Morton Thiokol, Hill Air Force Base, The Church of Jesus Christ of Latter-day Saints and most of the major universities.
"These are all prestigious customers," said Goodwin, "and it illustrates the major presence Digital Equipment has in Utah.
So what's new in the computer biz?, we asked Goodwin and Art LaNata, intermountain district sales manager. It was a loaded question and they both laughed. Computers are one industry where "What's new?" is not a casual question.
"This business is changing so fast it's unbelievable," said Goodwin. "It's very much a leapfrogging technology. By that I mean the technology is getting dramatically better all the time while the price drops conversely. It's an industry where you have to come out with better products all the time or you will fail."
He said 95 percent of Digital's products didn't exist two years ago, and that situation will happen again over the next two years. "It's very competitive, and you have to put in a lot of R&D."
Unlike automobiles, that kind of planned obsolescence is good for customers, said LaNata, because it means their value-to-investment ratio continually goes up. At least it does, he noted, admitting gross prejudice, if the customer buys from Digital Equipment.
"Our products are all compatible with each other, from the smallest to the largest. They all run on the same software and architecture (so) our customers never have to worry about conversions. They can migrate upward without having to change software."
Digital Equipment Corp. was formed in 1957 by company president Kenneth H. Olsen and several other MIT grads in rented space in an old woolen mill in Maynard, Mass., a suburb of Boston. For office furniture they brought some old lawn chairs from home.
The company - now employing 120,000 worldwide - is still there, and the boss still lives in the same house he had in 1957. "Olsen's high standard of ethics really permeates this company," he said. "We're about as ethical as a corporation can get."