Palmer scents D-day victory in chip battle
James Harding, VNU Newswire US, reports on the latest from Digital?s headquarters in Maynard, Massachusetts
Digital chairman, president and CEO Bob Palmer will face the company board in the next few days, confident he will keep his job and win ?billions of dollars? from Digital?s legal battle with Intel.
Palmer hinted he is ready for Intel to settle out of court. ?I wouldn?t be surprised if they said could we perhaps work this out in some less acrimonious way, and I would listen,? he said.
His annual presentation to the board of his business plan for Digital?s 1998 financial year takes place this month, but despite mounting disquiet from shareholders, Palmer said: ?I have never felt my job was in jeopardy from my directors. There are many former CEOs on it ... they knew the condition of the enterprise when I took the job and that it was difficult to fix.
?The fact is these jobs have a short half-life and I accept the shareholders own the company. If they become dissatisfied then I will be replaced. But I don?t worry about it.?
Palmer agreed that Digital?s results are not as good as they should be, but he is ?fixing what went wrong,? he said, referring to Digital?s recent inventory and marketing problems.
Palmer said Digital?s legal counsel suggests the company will win billions of dollars by proving Intel?s Pentium Pro uses patented technology allegedly stolen from Digital?s Alpha. Analysts believe Digital has only a slim chance.
But Palmer, who joined Digital in 1985 to run the company?s chip operations, was clear that the suit was filed after eight months of deliberation and planning to ensure that it was legally and technically valid.
He said the legal process should take about two years and will cost tens of millions of dollars, despite filing the suit in Massachusetts to speed it up.
Partners campaign to give Alpha chancePartners Digital, Mitsubishi and Samsung will launch Alpha-based PC systems and an ad campaign in a bid to break Intel?s hold on the desktop before its processors adopt 64-bit computing.Bill Strecker, VP of strategy and chief technology officer at Digital, said Samsung will launch its first machine by the end of June. In the autumn, the three firms will unveil a European ?Powered by Alpha? campaign in a bid to point out the chip?s superior speed over Intel?s Pentium. The US promotion begins this week.Digital already has PC workstations based on Alpha, and 466MHz Alpha 21164PC-based desktop PCs will follow in three months? time. At under $2,600, they will compare with 233MHz Pentium II machines, which offer roughly half the power, according to Digital semiconductor VP Richard Riker. ?Our intention is to compete head-to-head with Intel and to shine with NT,? he said.The company plans to drive Alpha into NT installations and add its FX!32 software if needed, which allows Intel-native applications to run on Alpha at roughly 60 per cent of the speed.The Alpha campaign, part of Digital?s 40 per cent ad spend increase, is aimed at visual computing users wanting 3D animation, internet content development and digital video.Strecker said only Alpha offers 64-bit computing now. ?Falling memory costs are driving the shift from 32-bit to 64-bit as 4Gb systems, which now cost about $16,000, need more than 32-bit capability.?Digital ponders Alta Vista saleDigital is reconsidering selling off part of Alta Vista, the company?s independent software subsidiary.Digital chairman, president and CEO Bob Palmer told a select group of European journalists that he was investigating an initial public offering (IPO) of roughly 20 per cent of Alta Vista. He said Digital decided against the move last year, but believes market conditions may soon be right for the IPO. ?The market will not accept it right now, but I am definitely rethinking it.?Harry Copperman, senior VP at Digital?s products division, revealed that the company was weighing the benefits of Alta Vista?s brand and input to the main business with its power as a standalone soft-ware company.?The capital could be useful to Digital. Do we think we can build a software business fast enough to get benefit or would it be better integrated in the company?? he asked.Ilene Lang, president and CEO of Alta Vista, said the subsidiary will break even by the end of this calendar year. ?The IPO was in the plan, but the world changes all the time,? she said.Alta Vista will launch Language Tabs, a tool allowing internet searches in specific languages, by the end of June. Lang said the company is hiring staff at its Netherlands-based European operation and plans to open a mirror site in Japan. She also revealed that advertising contributes 40 per cent of its revenue, with licensing and product sales making up the rest.Alta Vista?s European partners include Anite Systems, Ingram Micro, Keltec, Netway and Web Factory. It now boasts over 31 million hits a day.