In a parting shot to 1991, UBS Securities vice-president Marc Schulman has delivered himself of another opus, this one a 31-page treatise entitled Digital Equipment: Ready for Take-Off a fitting follow-on to his original blockbuster Microsoft and the New Order in the Computer Industry (CI No 1,737). Mr Schulman’s position on DEC can be summed up by his advice to investors: Buy. Having probed DEC’s psyche, he concludes its long nightmare is ending. In fact, by his reckoning, DEC’s earnings will jump from $3.10 a share in fiscal 1992 to June to $7.50 in fiscal 1993, and assuming a flat equity market, believes that its share price could appreciate to $90 by this time next year from around $50 now. Now, remember, this is a forecast about a company currently sounding warning bells about a serious operating loss on its second quarter, in a market not exactly bullish on high-tech issues where other analysts are busy slashing their forecasts on DEC. However, we will let Mr Schulman’s piece speak for itself as to whether DEC is a sound investment. What we are after are any marketing nuggets he may have squirreled away: unsurprisingly, he anticipates, for instance, that the Alpha chip will initially deliver 80 VAX units of performance and 100 Specmarks – 2.5 times the performance of the 83MHz CMOS chip in the new VAX 6000 Model 600. The first Alpha VAX, he says, will be a VAXstation that will be delivered in volume in the December 1992 quarter. Alpha VAX 4000s should be delivered in the following quarter. They will be followed by Alpha VAX 6000s in the June, 1993 or September, 1993 quarter. The first Alpha VAX 9000s, which will have stronger input-output capabilities than the Alpha 6000s, will be only 15% slower than the fastest IBM mainframe in commerical applications and 70% faster in technical applications. Furthermore, in commerical applications, the Alpha VAXes will on average provide 18 and 23 times the price-performance of air-cooled and water-cooled IBM ES/9000s respectively. In technical applications, the price-performance advantages will be twice as large. So, he concludes, unless IBM introduces some radically new technologies to improve its performance, DEC will be positioned to take large chunks of its business away. Having more or less wiped the floor with IBM, Mr Schulman then turns his attention to the Advanced Computing Environment. He attributes DEC’s involvement in ACE to its expectation that the proliferation of ACE boxes – and not just those it manufactures and sells but everyone else’s as well will expand the marketplace for its high-margin Network Application Support software. (Apparently both Mr Schulman and DEC take it on faith that the ACE explosion will really happen). With the world now equating the notion of open systems with interoperability rather than Unix, Shulman claims, DEC has accidently fallen into Aladdin’s treasure trove since it’s been developing software – Network Application Support – that facilitates heterogeneous integration and the creation of client-server applications for years now. According to Mr Schulman’s count, at the end of October more than 1,000 software companies, including Borland International Inc, Lotus Development Corp and Computer Associates International Inc, were delivering over 2,400 Network Application Support-conformant programs. As clients, he notes, NAS already supports systems running under every important operating system.

Better sense

In addition to its own VMS and Ultrix-based systems, personal computers running MS-DOS, Windows and OS/2, Macintoshes and Sun Microsystems Inc workstations can function as clients. At present, only VMS and Ultrix-based RISC systems can function as servers. During 1992’s second half, server support will be extended to include machines – including ACE machines – running the OSF/1 operating system. In 1993, server support will be expanded to include ACE machines running Microsoft’s Windows NT operating system, IBM machines running AIX and Hewlett-Packard Co machines running HP-UX. At unspecified dates beyond 1993, NAS

will also support IBM machines running MVS and Hewlett-Packard machines under MPE. At present, it is not planned to support Sun machines as servers. This, Schulman argues, makes better sense than what DEC’s competitors are doing. Taking Sun and Silicon Graphics Inc as models, he notes that DEC will be the only vendor selling NAS, while the others are commoditising their product differentiation: Sun with Solaris and Silicon Graphics with its graphics libraries. It is also not flirting with self-impact, since within a year both Sun and Silicon Graphics will be competing against high-performance personal computers equipped with software that once distinguished their products. This position, coupled with its relationship with Microsoft and its concomitant promise of vastly enlarging DEC’s grasp on the personal computer market, is supposed to turn the company around and make it a Wall Street darling. – Maureen O’Gara