[Info-vax] Message from HP.

[JF Mezei]

On 13-12-09 07:34, Michael Kraemer wrote:
>
> Just a rough estimate: Alpha development plus the fab costed
> around $500M/a, and with only 100000 chips sold per year,
> each Alpha CPU should have been priced at $5000 just to recover
> the development cost. So they must have made a loss on each
> Alpha they sold on the free market.
> Even fabless, at Compaq times, they had to spend $300M/a.

There are a number of issues here where Digital made matters worse for
itself.

For instance, the famous Hudson FAB ran below capacity in part because
DEC refused additional business hoping Alpha would grow to take up all
fo its capacity. Yet, Digital did nothing to make Alpha competitively
priced, so it didm't grow. Catch 22.

It takes vision, leadership and confidence from the board to take leaps
of faith. Palmer had none of those, so he couldn't decide to lower the
price of products to hopefully raise volumes. Instead, he was in cost
cutting mode where he kept pruning parts of Digital instead of fixing them.

The lessons learned here is that it is veryt hard for a CEO to rebuild a
company, but very easy for a CEO to destroy it. We've seen it with
Digital/Palmer, we've seen it with La Carly and Hurd at HP.  (Curly
didn't last long enough, and once the board gave up in finding a real
CEO, Curly's mandate was to call yup M&A bankers to find a banker).


The 1997 agreement should have seen DEC "donate" Alpha to Intel to
replace the then vapourware IA64 as Intel's successor to 8086.

You're either 100% in a business, or you're not at all. DEC seemed to
only want to be 50% into a business, never willing to go 100%.