Digital's Palmer faces an unsettled future after Intel settlement: CEO bet big on fast chip, now needs new strategy to restore firm's luster: benefits from a bold lawsuit
Article Abstract:
DEC is scaling back emphasis on the Alpha microprocessor chip as a result of its legal settlement with Intel. The move represents a significant change for DEC, despite its hopes of drawing $1.5 billion from the Intel agreement. Chmn, CEO and Pres Robert Palmer has championed Alpha since succeeding founder Ken Olsen in 1992. Palmer launched a patent-infringement lawsuit against Intel in May 1997. Financial terms of the Intel agreement call for DEC to sell semiconductor-manufacturing facilities for $700 million, plus product discounts and licensing fees worth as much as $800 million through 2007. Some DEC board members pressured Palmer into selling the Alpha plant to Intel, arguing that Alpha was draining the company, according to insiders. DEC's morale and stock values have risen since the improbable suit, but Palmer must find a new approach to revitalize the traditional computer company. An unsuccessful strategy may invite investor and boardroom pressures that could challenge Palmer's autonomy and DEC's independence.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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SCI moves from computer war's backstage to center; assembling machines with familiar names, firm increasingly prospers
Article Abstract:
SCI Systems is playing a leading role in the fast growing contract manufacturing market. Contract manufacturing is becoming a popular option with computer makers anxious to reduce production costs while increasing market share. SCI Systems is in a particularly favorable position with 20 plants on three continents and a reputation as the largest and possibly most efficient contract manufacturer in the market. The company's close relationship with HP is also extremely beneficial since HP is positioning itself as a major retail vendor. Contract manufacturing and SCI's role are expanding as companies delegate responsibility for purchasing materials, testing, designing and building products in addition to assembly. The volume of parts and products produced by SCI and the deficit incurred from heavy investment in a global network of plants are sources of concern. Considerable growth in the European market should validate SCI's global approach.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1995
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Stacked DEC; Digital's new attitude toward old enemies puts it back in game; CEO Palmer turns to pacts with Microsoft, Oracle to reseed firm's growth; shake 'n bake restructuring
Article Abstract:
DEC's recent agreement to take part in a mutually beneficial joint development and marketing pact with Microsoft is emblematic of an increasingly pragmatic outlook from DEC's management staff. In exchange for DEC's not pursuing litigation associated with the dubiously similar aspects between Windows NT and DEC's VMS, Microsoft has agreed to incorporate VMS into its Windows NT development plans and to create a version of NT for DEC's Alpha processor. The agreement represents a calculated risk for DEC, for by moving its VMS customer base to hardware-independent Windows NT, there is no assurance that those customers will continue to purchase DEC hardware. DEC has become a more practical and ruthless operation since the 1992 promotion of Robert Palmer to CEO, laying off some 60,000 employees and regaining a measure of its 1980s profitability.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
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