D M PRTPF
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GOOD MORNING.
IT'S A PLEASURE FOR ME TO BE WITH YOU HERE TODAY. MY FEW REMARKS THIS MORNING ARE REALLY JUST A GOOD EXCUSE
-AN EXCUSE TO SPEND SOME TIME WITH YOU WHICH OTHERWISE THE PRESS OF EVENTS
SOMEHOW NEVER ALLOWS
--SO IT HAS BEEN A GREAT COUPLE OF DAYS AND I THANK PAUL AND YOU FOR INVITING ME.
BEFORE I SPEAK ON THE STATUS AND OUTLOOK
FOR THE COMPUTER GROUP,
LET ME JUST TAKE A MOMENT
AND LIST AND SIZE THE ELEMENTS WHICH MAKE IT UP.
HiBiLfi^M£IT PRESIDENrs F0RUM
THE COMPUTER GROUP COMPRISES TEN MAJOR BUSINESSES
OR PRODUCT FAMILIES AS WE CALL THEM.
THESE TEN PRODUCT FAMILIES IN TURN
COME UNDER ONE OF THREE GROUPS OF BUSINESS:
SERVICES, SYSTEMS & PERIPHERAL PRODUCTS.
PERIPHERALS COMPRISES FOUR BUSINESSES:
OEM, END USER OR PLUG COMPATIBLE PRODUCTS, TERMINALS & BUSINESS PRODUCTS,
PERIPHERALS IN TOTAL IN 1977
ACHIEVED $525 MILLION IN REVENUES.
SYSTEMS COMPRISES THREE BUSINESSES:
EDP SYST, INSTRUMENTS & CONTROLS, & AEROSPACE & MILITARY PRODUCTS.
TOGETHER, SYSTEMS PRODUCT FAMILIES
HAD $395 MILLION IN 1977 REVENUES.
SERVICES, THE MAJOR THRUST OF OUR BUSINESS,
COVERS DATA SVCS, PROFESSIONAL SVCS. & ENGINEERING SVCS.
TOTAL REVENUES FOR SERVICES
WERE $555 MILLION LAST YEAR.
iffi%: W W ! PRESIDENT'S F0RUM
NOW I HAVE TO BE CAREFUL HEREOR I'LL SPEND ALL MY TIME
AND PROBABLY PART OF JOHN LACEY'S
-BORING YOU WITH THE CHARACTERISTICS, IMPORTANCE & PROBLEMS
OF EACH PRODUCT FAMILY.
SO LET ME INSTEAD JUST SAY
THAT WITHIN THESE BUSINESSES CONTROL DATA
IS MORE COMPREHENSIVELY INVOLVED IN THE INFORMATION INDUSTRY THAN ANY OTHER COMPANY IN THE WORLD.
MORE IMPORTANT IS THAT WE HAVE EVOLVED
FROM JUST A COMPUTER MAINFRAME MANUFACTURER
INTO A SERVICE COMPANY
--A UNIQUE SERVICE COMP--ANY.
THE BUSINESS OPPORTUNITY FOR SERVICES
CANNOT BE OVERSTATED.
ALL THE MAJOR SOCIETAL PROBLEMS
INVOLVE AN OVERWHELMING NEED FOR INFORMATION;
AND THIS IS WHAT DATA SVCS, EDUCATION & PROFESSIONAL SVCS,
ARE ALL ABOUT.
.«%: WFW*m PRES1DENT'S F0RUM
CONTROL DATA CAN BE VIEWED
AS BEING A HIGHLY VERTICALLY INTEGRATED SERVICE COMPANY. THAT IS, WE MAKE ALL THE COMPONENTS
-THE COMPUTER MAINFRAMES, -THE PERIP.PRODUCTS,-THE SOFTWARE PRODUCTS,
THE FINANCIAL SERVICES, & THE CONSULTING SERVICES
THAT GO INTO OUR FINAL INFORMATION SERVICE. AT THE SAME TIME,
THE TOTAL MARKET FOR INFO. SERVICES IS SO HUGE
AND IS APPROACHED IN SO MANY WAYS
BY SO MANY DIFFERENT COMPANIES
THAT THERE ARE ENORMOUS MARKETS
FOR EACH OF THESE INDIVIDUAL COMPONENTS AS WELL.
THUS IN PERIPHERAL PRODUCTS BY SELLING OEM,
OR IN COMPUTER MAINFRAMES BY SELLING COMPLETE SYSTEMS,
BY TREATING THAT AS A SEPARATE SERVICE,
WE ACHIEVE ECONOMIES OF SCALE
NOT POSSIBLE TO ANY OTHER SERVICE COMPANY.
,-PBXCE - CQMMERCIAL CREDIT PRESIDENT'S FORUM
M%: WFW*<M
ANOTHER WAY TO LOOK AT ITIS STARTING FROM THE BASE LEVEL PRODUCTS
SUCH A PERIPHERALS, COMPUTERS, FINANCIAL SERVICES
SOFTWARE AND PROFESSIONAL PEOPLE.
A VERY LARGE NUMBER
OF EVER INCREASING VALUE ADDED PRODUCTS AND SERVICES
CAN BE GENERATED.
THE HIGHEST VALUE ADDED COMBINATION IS A SPECIFIC DATA SERVICE;
THE LOWEST IS A SIMPLE PIECE OF HARDWARE. SO THESE COMBINATIONS CAN BE THOUGHT OF OF LEVELS OF VALUE ADDED SERVICES.
AND, AS I HAVE INDICATED,
ATTRACTIVE MARKETS EXIST FOR ALL LEVELS,
WHILE AT THE SAME TIME THEY REINFORCE
THE ULTIMATE SERVICES THRUST OF OUR BUSINESS.
1977 WAS A RECORD YEAR IN BOTH REVENUE AND PROFITS
AND, OF COURSE, IT'S NICE TO BE ABLE TO SAY THAT.
BUT HAVING SAID IT
I WILL ALSO SAY
THAT IT IS A RELATIVELY UNIMPORTANT STATISTIC TO US AS WE MOVE INTO 1978.
FOR WE HAVE ONLY BEGUN TO REALIZE THE LEVERAGE THAT IS INHERENT IN OUR BASIC STRATEGY.
LET ME GIVE YOU TWO EXAMPLES OF WHAT I MEAN.
TAKE ENERGY.
CONTROL DATA HAS BEEN A MAJOR SUPPLIER IN THIS FIELD SINCE LONG BEFORE IT WAS SO PROMINENTLY RECOGNIZED
AS A CRITICAL WORLD PROBLEM.
ALMOST EVERY PART OF THE COMPUTER BUSINESS IS INVOLVED. FOR EXAMPLE, WE HAVE AN ORGANIZATION,
WHOSE ORIGINS GO BACK TEN YEARS,
DEDICATED TO NUCLEAR POWER PLANT DESIGN & SAFETY.
WE ALSO HAVE ONE FOR THE PETROLEUM INDUSTRY,
mm%: wfwmt president's forum
MOST OF OUR HARDWARE DIVISIONS
ARE INVOLVED WITH PRODUCTS AND EXPERTISE
TO SERVE ENERGY MARKETS.
AND WE OFFER AS PART OF DATA SERVICES
DESIGN TOOLS TO ENGINEERS WORKING IN POWER PLANT DESIGN.
THIS YEAR OUR CYBERNET DATA SERVICE AND PLATO
WILL BEGIN WORKING TOGETHER.
PLATO WILL TEACH ENGINEERS THE LATEST TECHNIQUES & TOOLS
AVAILABLE TO THEM THROUGH CYBERNET
AND, OF COURSE, THE NETWORK ACTUALLY BRINGS
THESE PROBLEM-SOLVING TOOLS TO THE ENGINEER,
THE SYNERGISM IS AMAZING.
FOR EXAMPLE, THIS COMBINED PLATO/CYBERNET APPROACH
WILL INCREASE REVENUES FOR JUST ONE DESIGN APPLICATION BY 50%
THAT'S WHAT I MEAN BY JUST BEGINNING
TO REALIZE OUR PRODUCT LEVERAGE.
BUT PERHAPS ONE OF THE MOST EXCITING DEVELOPMENTS IS IN THE AREA OF ENERGY MANAGEMENT.
THAT IS,
MAKING BETTER USE OF THE ENERGY WE DO HAVE.
W»%: W W PR™'S F0RUM
CONTROL DATA, BUILDING ON THE LONG EXPERIENCE
OF ITS AUTOCON SUBSIDIARY WITH THE UTILITIES INDUSTRY,
HAS DEVELOPED AN OPERATIONS CONTROL SYSTEM FOR ELECTRIC TOWER UTILITIES.
THESE ARE LARGE AND COMPLEX SYSTEMS
TYPICALLY COSTING SOME 10 MILLION DOLLARS.
THE SYSTEM PAYS FOR ITSELF IN FUEL COST SAVINGS ALONE
IN TWO TO FOUR YEARS.
THE FIRST SUCH SYSTEM IN THE WORLD
IS IN OPERATION AT WISCONSIN ELECTRIC POWER COMPANY.
JUST A FEW OF THE BENEFITS INCLUDE:
- HELPING AVOID BLACKOUTS
-
IMPROVED EFFICIENCY, WHICH REDUCES OPERATING COSTS
-
SAVINGS IN CAPITAL EQUIPMENT COSTS, BECAUSE THE UTILITY CAN
SAFELY OPERATE CLOSER TO CAPACITY MARGINS.
• CONTROL DATA IS THE PIONEER AND LEADER
• IN THESE SYSTEMS.
• WEPCO ~ COMPLETED JUST LAST YEAR
--• WAS THE FIRST
• AND REPRESENTED A FOUR-YEAR EFFORT.
mm%: f f . % i T president's forum
IN THE NEXT TWO YEARS THE UTILITIES INDUSTRY WILL INSTALL SIX MORE SYSTEMS.
CONTROL DATA HAS FOUR OF THESE,
AND THE BALL IS JUST STARTING TO ROLL, THE DEMAND IS SO ENORMOUS
THAT WE CANNOT BID ALL THE OPPORTUNITIES.
WE RECENTLY DECLINED TO BID
FOR A SYSTEM AT CON ED IN NEW YORK.
THE GROWING REPUTATION OF CD's ENERGY MANAGEMENT SYSTEMS
IS SUCH THAT THEY DELAYED THE PROCUREMENT
TO MEET OUR ABILITY TO MAKE A PROPOSAL,
TO UNDERSTAND BETTER THE CONCERN
(OR TO PUT ALL IN PERSPECTIVE), THE 1977 BLACKOUT IN NEW YORK
IS ESTIMATED TO HAVE COST BUSINESS, INDUSTRY AND THAT COMMUNITY
OVER ONE BILLION DOLLARS.
R.M.PRICE -COMMERCIAL CREDIT PRESIDENT'S FORUM
JANUARY 31, 1978 - PAGE TEN
CON ED's LOSS IN REVENUE ALONE FOR THE TWENTY-ODD HOURS
WAS NEAR TEN MILLION. AVOIDING THAT ONE EVENT
WOULD HAVE PAID FOR THE COST OF THE SYSTEM.
NOT REALLY UNRELATED TO ENERGY
IS ANOTHER OLD BALIWICK OF OURS THAT IS RECEIVING INCREASED WORLD ATTENTION THESE DAYS,
AND THAT IS WEATHER.
WITH THE ADVENT OF COMPUTERS,
A LONG-TERM SOCIETAL NEED
OF ACCURATELY PREDICTING THE WEATHER
WAS FINALLY WITHIN REACH,
TODAY CONTROL DATA SYSTEMS AND SERVICES
ARE PLAYING MAJOR ROLES IN HELPING MEET THIS NEED, CONTROL DATA SYSTEMS ARE INSTALLED
IN HALF OF THE MAJOR WORLD WEATHER CENTERS
AND PROVIDE GRAPHIC DISPLAY, COMMUNICATIONS
AS WELL AS PREDICTION CAPABILITY.
M.'.PEJ^r CQ^ERCA$kCRED IT PRESI DENT' S FORUM
JANUARY 31, 1978 - PAGE ELEVEN
WE ARE THE PREDOMINANT SUPPLIER OF SYSTEMS TO THE MAJOR WORLD CENTERS.
THESE ORDERS WERE THE RESULT
OF QUALITY MKTG. PROGRAMS ALONG WITH INDUSTRY KNOW-HOW.
WE RECOGNIZED THE INDUSTRY TRENDS SEVERAL YEARS AGO
AND SET FORTH PLANS TO MEET ITS REQUIREMENTS. WE DEVELOPED SPECIAL COMPUTER PROGRAMS
INCLUDING GRAPHICAL DISPLAY OF WEATHER INFORMATION.
WE FOUND A CONSULTING ORGANIZATION - OCEAN DATA SYSTEMS, INC,
WITH A LONG-STANDING REPUTATION,
TO PROVIDE THE TECHNICAL
AND APPLICATIONS SOFTWARE EXPERTISE REQUIRED. THESE STRATEGIES ARE BEGINNING TO PAY OFF
WITH ORDERS
AND A GROWING INTEREST IN OUR PRODUCTS AND SERVICES.
AS WEATHER PREDICTION TECHNOLOGY HAS CONTINUED TO ADVANCE,
IT HAS CONTRIBUTED TO AN INCREASING AWARENESS
OF NOT ONLY THE BENEFITS,
BUT THE NEED FOR IMPROVED WEATHER PREDICTION.
.«%: TOERW»PR™'S F0RUH
THE DRAIN ON OUR CRITICAL OIL AND GAS RESOURCES
IS A PRIME EXAMPLE.
ACCURATE WEATHER FORECASTS
CAN RESULT IN SIGNIFICANT REDUCTIONS
IN THE ENERGY RESOURCE REQUIRED TO PRODUCE ELECTRICITY,
TO OPTIMALLY ROUTE A SHIP OR DRILL FOR OFFSHORE OIL. ON THE OTHER HAND,
THE COMPUTING RESOURCE REQUIREMENTS ARE ENORMOUS. AND FEW INDISTRIAL ORGANIZATIONS
CAN AFFORD A DEDICATED COMPUTER OF THE SIZE REQUIRED. CONSEQUENTLY, IN 1978
A NEW SERVICE - INDUSTRIAL WEATHER SERVICE
-HAS BEEN CREATED
AS A JOINT VENTURE PROGRAM WITH OCEAN DATA SYSTEMS. R M Price CDC speeches Charles Babbage Institute <www.cbi.umn.edu>
THE INDUSTRIAL WEATHER SERVICE
WILL DEVELOP TAILORED & SPECIALIZED WEATHER FORECASTS TO HELP INDUSTRY
AND ALSO FOR EMERGING AND OTHER NATIONS
WHO MAY NOT HAVE AVAILABLE THE TECHNOLOGICAL RESOURCES TO SOLVE THE PROBLEM BY THEMSELVES.
SO HERE AGAIN WE HAVE THE LEVERAGE
OF OUR EXISTING NETWORK RESOURCE & APPLICATION EXPERTISE WORKING TO CREATE NEW OPPORTUNITIES
-AND ESPECIALLY NEW OPPORTUNITIES IN SERVICES. I'LL COME BACK TO THAT THOUGHT IN A MOMENT.
LET'S TAKE A LOOK AHEAD AT 1978,
IN A WORD OR TWO
IT IS MORE OF THE SAME.
MORE PROGRESS
IN TERMS OF GREATER PROFITS AND GREATER CONSISTENCY. IN 1977 WE ACHIEVED A PROFIT OF 20 MILLION DOLLARS,
AN INCREASE OF 60% OVER 1976.
K%:
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THIS YEAR
ANOTHER SIGNIFICANT INCREASE IN PROFITS IS PLANNED
-WE HAVE BUDGETED A PROFIT
OF JUST OVER 30 MILLION DOLLARS
-ABOUT 50% OVER 1977.
NINE OUT OF TEN PRODUCT FAMILIES SHOULD BE PROFITABLE.
IN COMPARISON, IN 1977 EIGHT OUT OF TEN PRODUCT FAMILIES
WERE PROFITABLE AND A YEAR EARLIER, IN 1976,
ONLY HALF WERE PROFITABLE. SO, THE PROGRESS CONTINUES. THERE IS STILL MUCH TO BE DONE TO ACHIEVE LONG-RANGE CONSISTENCY
AND 1978 WILL NOT MARK THE END OF THAT ROAD EITHERV
AND WE WILL CONTINUE ON THE PATH
TO MAKE DATA SERVICES
THE MAIN THRUST OF OUR BUSINESS.
THE AREA THAT WILL GET MOST ATTENTION
WITH REGARD TO OUR FUTURE STRATEGIES
IS THAT OF APPLICATION UNIQUENESS.
3«%: «WEWeside"t's F°R»«
APPLICATION UNIQUENESS IS A BROAD TERM,
IT IMPLIES NOT JUST SOME COMPUTATION SOFTWARE
UNIQUE TO US
OR UNIQUE DELIVERY MECHANICS
SUCH AS THE NETWORK OR GRAPHICAL DISPLAY CAPABILITY
BUT AN EVER INCREASING EMPHASIS
ON INFORMATION DATA BASES THEMSELVES,
AND IT APPLIES EQUALLY TO SCIENTIFIC APPLICATIONS: PLASTICS, SOLAR ENERGY, WEATHER,
AS WELL AS COMMERCIAL & FINANCIAL APPLICATIONS:
ECONOMIC DATA, SECURITY, SAVINGS & LOAN STATISTICS, ETC.
I CAN'T REALLY COVER THIS WHOLE SUBJECT
IN A FEW MINUTES THIS MORNING,
BUT I CAN GIVE YOU SOME DETAIL
ON ONE MORE EXAMPLE,
IT HAS TO DO WITH AGRICULTURE. AS MOST OF YOU KNOW,
AGRIBUSINESS IS THE LARGEST INDUSTRY ON EARTH.
THE DEMAND FOR FOOD PRODUCTS
WILL MORE THAN DOUBLE BY THE YEAR 2000.
IT IS BECOMING INCREASINGLY IMPORTANT
THAT WE KNOW CURRENT CROP CONDITIONS,
NOT ONLY IN THE U.S.
BUT IN THE REST OF THE WORLD ALSO -AS THE LATEST GRAIN SHORTFALL IN RUSSIA HAS TAUGHT US.
THROUGH CYBERNET WE WILL OFFER A NEW CONCEPT
IN PREDICTING LARGE AREA CORN & SOYBEAN PRODUCTION,
THIS SERVICE IS CALLED AGSERV AND IT IS AIMED FIRST
AT LARGE AGRIBUSINESS FIRMS IN THE U.S. & OVERSEAS
WHO MUST TAKE A POSITION
REGARDING FUTURE GRAIN CROP SUPPLY AND DEMAND. THE HEART OF AGSERV
IS A PROPRIETARY DATA BASE
WHICH IS AN AGGREGATION OF PUBLIC "N W S".DATA, PUBLIC USDA DATA,
AND CD PRIVATE AGRONOMIC & SOIL MOISTURE DATA,
THROUGH THIS COMBINATION OF DATA WE ARE ESSENTIALLY SIMULATING
THE ACTUAL CORN & SOYBEAN GROWING ENVIRONMENT. THE VALUE OF THE DATA BASE
IS ACHIEVED BY THE WAY IT IS COMBINED INTO USEFUL FORM,
THE EMPHASIS WE PLACE ON HIGH QUALITY DATA SOURCES,
AND THE LARGE NUMBER OF SAMPLING POINTS
WE USE TO REPRESENT THE CORN AND SOYBEAN BELT.
GIVEN THIS DYNAMIC, ACCURATE SIMULATION OF THE ENVIRONMENT,
WE THEN MIMIC THE GROWTH OF THE CROP.
THE RESULT IS THAT AT ANY POINT
DURING THE GROWING SEASON
WE CAN PREDICT THE CORN & SOYBEAN YIELD POTENTIAL,
THE MARKET POTENTIAL
FOR THIS SERVICE IS ENORMOUS.
THE 1978 EFFORT IS BASICALLY DEVELOPMENTAL
BUT EVENTUALLY, WE WILL OFFER VARIATIONS OF THE SERVICE
TO ALL ELEMENTS OF AGRIBUSINESS
-FROM THE FARMER TO FOREIGN GOVERNMENTS,
AGSERV IS A GOOD EXAMPLE
OF APPLYING EXISTING DATA BASE TECHNOLOGY
TO PENETRATE A NEW MARKET AREA FOR CDC,
ANOTHER MAJOR ELEMENT OF OUR SERVICES STRATEGY IS THAT OF DATA SERVICES AND MINI COMPUTERS,
WE HAVE HAD A FEW BEGINNINGS
OF COMBINED DATA SERVICES AND SMALL COMPUTERS,
BUT IN 1978 WE WILL BEGIN MUCH MORE AGGRESSIVELY TO LOOK AT STRATEGIES
INVOLVING SMALL SYSTEMS AND DATA SERVICES
AS A PART OF A TOTAL APPLICATION OFFERING,'
THOSE THEN ARE A FEW STATISTICS
AND A LITTLE PERSPECTIVE ON THE COMPUTER GROUP
• THERE IS, THOUGH, ONE FINAL THOUGHT.
0 I WANT TO SHARE WITH YOU
-• AND THIS CONCERNS ALL OF US.
• FOR ME,
• AND I HOPE EACH OF YOU,
o THERE IS BEYOND THE NUMBERS, THE PROBLEMS & THE CHALLENGES,
• THE SHEER EXCITEMENT OF CONTROL DATA.
0 THE TREMENDOUS CHALLENGE & EXCITEMENT
0 OF MAKING THINGS POSSIBLE FOR PEOPLE.
YOU, WE, ALL OF US ARE SO INCREDIBLY FORTUNATE
TO BE INVOLVED IN THE BUSINESS OF THE FUTURE,
OF BRINGING INFORMATION & FINANCIAL SERVICES
TO ALL ELEMENTS OF WORLD SOCIETY, THAT IS THE GIFT WE HAVE BEEN GIVEN,
TOGETHER
WITH DEDICATION TO THE FUNDAMENTALS OF OUR BUSINESS WE HAVE AN OPPORTUNITY OF AWESOME PROPORTIONS.
IT WILL BE HARD....
IT CAN BE FUN....
