[Info-vax] Did Ken Olsen kill Alpha?

[JF Mezei]

With regards to Alpha costs.

Was DEC able to make competitive VAX chips (cost wise) ?

It seems to me that in the 1980s when DEC made so much of its own stuff,
it was able to compete against IBM. In fact, even in the 1990s when DEC
was no longer competitive, it was still competitive at making ethernet
controllers and ARM chips.

Seems to me that there may have been some really screwy accounting to
inflate the real costs of the Alpha chip.  Perhaps Alpha were paying for
100% of the FAB when that FAB was also used to make ARM, ethernet and
plenty of other chipsé


My guess is that DEC, as usual, thought its products were unique and way
above the competition and warranted a HUGE margin over the competition
(like its compilers, disk drives etc).


The difference with Apple is that Apple has been pretty good at
measuring the right amout of markup that people are willing to pay to
get the lighted Apple logo on their laptop.  DEC failed to realise that
people stopped being willig to pay a markup to buy something from
"Digital Equipment Corporation".  And yeah, that was definitely during
the Olsen days, but it lasted through the early Palmer years where
palmer was focused on cutting costs and lowering prices to raise volumes
was unthinkable for him. In fairness, Palmer did produce some products
later in the 1990s where the margins were more reasonable, but "too
little too late" seems to be the right way to describe it.

I think that Olsen's mistep with VAX9000 vs Alpha was not that important
in the grand scheme of things. His inability to gauge who the real
competition was (focusing only against high priced IBM and ignoring the
others) was what reallt set Digital back in the marketplace.

The solution was relatively simple for Palmer. Instead, Palmer opted for
the staf and product cuts (often ill conceived). Cutting sales force
wasn't too bright.

There should have been parralell efforts to lower price of products AND
streamline Digital's administation costs. And there should have been
much mareting instead of spending budget to change the DIgital logo.