Choosing a colocation vendor – overview (part 1)

There’s been a lot of talk the last few days about Facebook’s Open Compute project, where they have published info about their servers and data centers. It’s interesting reading. But, arguably, not specifically relevant for many folks.

Say you’re a startup. You’ve built the next great thing, you’ve got a few beta customers, and it’s time to get ready for real use. You’ve dabbled with shared hosting, and have vowed to never do that again. You’ve thought about virtual private servers, dedicated/managed hosting, and cloud services like EC2 or Windows Azure. But in the end, you’ve decided you’d rather own and operate your own servers. So you need a home for them.

Unfortunately, there’s not a ton of guidance out there for you at this point. There is a lot of superficial advice that Google will point you to, but not a lot that’s very useful for the startup CTO. What should you look for in a data center?

This article will talk about some high-level things to think about. Parts 2 and 3 will dig in further into what’s really important, and how to plan for the future.

You get what you pay for

Way back in 2002-ish or so, before I started NewsGator, I had a couple of servers at a mom-and-pop colo shop. I think it was like $50/mo or something for a couple of servers – just insanely cheap. It was basically a small office suite, with maybe 5 racks of equipment. It seemed a little warm in there, and the only security was the lock on the suite door (meaning I could get to other folks’ servers). I wasn’t there long, but a friend was – he told me a lot of stories about his servers overheating, and even one time when his servers were down and unreachable for a whole weekend without any notice. He later found that the company had put the entire rack he was in (shared with others) in a truck and hauled it across town to a new facility. Yikes.

What do I need?

You really want to find a company you trust; someone you can call a partner. You’re putting a lot of faith in them, so choose wisely. If you can afford it, go with a top-tier hosting facility in your area. If you can’t afford it, think harder about whether you really want to colocate. A few high-level things to think about:

  • physical security – who can get into the room your servers are in? How? Once they are in the room, could they get to your servers?
  • network – make sure you’re comfortable with the internal and external connections to the net, and how traffic is managed in the event of something going down.
  • bandwidth – think hard about what you need, both in terms of sustained and burst bandwidth.
  • physical space – is there room for you to expand as you grow?
  • cooling – your equipment doesn’t work if it gets too hot.
  • power – can they bring in enough power for your equipment? What happens if there is a grid power outage? How often to they test their generators and other power equipment? Have they ever had an actual power outage?
  • maintenance – sooner or later they’re going to have to do maintenance on, say, the router you’re connected to.
  • SLA – they can’t guarantee your site will be up, but they can guarantee that you will have power and network access. What does the service level agreement say?
  • company – is the company in good financial health? You don’t want to have to make an unscheduled move.

Now, when you look at a list like this for the first time, you’re probably thinking things like network/bandwidth are the most important to worry about. I did. I spent a lot of time worrying about that. But what I found was that ended up being the least of my worries.

This has all been pretty high-level so far…but in part 2 tomorrow, we will look at network and bandwidth; then in part 3, we’ll talk about the big daddy of them all, power and cooling.

On cloud storage

Seems like every day we’re flooded with new consumer-targeted cloud storage companies, promising easy backups and possibly tempting prices. And most of them have a free tier, offering a few GB to give us a taste. Some examples – AVG LiveKive (5GB free), SpiderOak (2GB free), Box.net (5GB free), SugarSync (5GB free), Windows Live SkyDrive (25GB free), Dropbox (2GB free), Memopal (3GB free), and even Comcast (2GB free) if you’re a customer. There are plenty of others, but you get the idea.

If you add those up, you’re at 49GB, which is a pretty reasonable amount of storage.

Seems like what we need is an app that looks something like Jungle Disk to the user, that can present a single view, but aggregate storage from multiple places on the back end. So essentially you’d see a 49GB disk in the Finder or Explorer, but your stuff would be distributed among whatever storage you’ve configured.

Even better, a Super Jungle Disk-like app, which can still present a unified view to the user, but actually store your stuff on multiple back ends, so you effectively have a RAID-1 (e.g. mirrored) storage solution. So maybe your 500MB of photos get stored on both Box.net and Dropbox, but in any case are seamlessly managed by this front-end tool on your desk.

Sort of a cloud-storage Drobo. Now that would be cool.

No, I didn’t see your ad in the paper

The other day, someone came to the door and rang the doorbell. When I answered, he was standing back about 10 feet (which everyone seems to do now – seriously, when did that start?), and he said something like:

“Hi, I’m your neighbor from down the street, and I’m also your new newspaper delivery guy. I know you don’t subscribe, but we’d like to give you the Sunday paper for free. Would you like me to leave it on your driveway, or up here by the door?”

Nice of him to ask, but sheesh, just what I need, another newspaper to have to throw away. The only thing I use them for is to put on the garage floor while I’m working on my motorcycle, and the local community paper that comes once a week (whether you want it or not) serves that need. I certainly don’t need – or want – the huge Denver paper every week.

So I told the guy “thanks, but I’d prefer not to get the paper at all.” Thinking that, you know, after 20 years I will have saved a whole tree by being so selfless.

The guy was utterly shocked. “Not even for the coupons?” he said. He wouldn’t let it go – he really gave me the feeling that I am the only one in the country who doesn’t dig the ads and coupons out of the Sunday paper. Finally he got the message and went to the next house, and thankfully I haven’t run over a paper on my driveway yet.

But it all got me thinking. I mean, sure, I’d like to save a few bucks as much as the next guy. Maybe I’m missing something in all these ads I never see. But why do I apparently need to get a 5-pound paper every week, throw most of it away, and then rifle through the inserts looking for where bananas (or TVs, or couches, or who knows what else) are on sale this week? Is there not a better way? And how many newspapers must we print to get the word out?

Suppose I want a new couch. The one thing I know about couches, other than how to sit on them, is that they go on sale all the time and I would guess no one pays retail for these things. So why can’t I go to a web site, let it size me up for a while to ascertain my location, type in “couches,” and have it show me all the awesome couches that are being advertised in my area right now? Presumably the same ones that are in the newspaper, but for those of us who want to be newspaper-free.

If I google couches 80129, I get nothing even remotely like this. Huh.

And I know what the paper-flyer folks are thinking.  What if I didn’t know I wanted a new couch, but then I saw the insert, and got so excited I had to go get one. If that really does work, and newspaper inserts can plant the seed of an idea and then lead to an immediate transaction, then I suppose the inserts are here to stay. My guess is this works better for bananas than for couches, though. And in any case, there should also be a digital version of this.

Almost as bad as the newspaper is having to think of every store that sells couches, go to their web site, and look to see if they have a local ad online. That’s a lot of work, and it’s probably only going to work for the larger stores that automatically publish their ad flyers on a weekly basis. And, I have to think of that store when I’m making my mental list.

Seems to me this information should be aggregated, and available based on location. Perhaps there’s an opportunity there. Or maybe it already exists, and I’m the only one who doesn’t know about it.

And in the meantime…I say to local businesses, remember that you, too, can be found on the internet. Your web site can be much more dynamic. And when I’m searching for information, when I’m ready to buy, when I actually want to see your advertised products, you’re hiding from me.

And no, I didn’t see your ad in the paper.

Unexpected Benefits

A couple of weeks ago, I read this post from entrepreneur Daniel Jalkut (inspired by these posts) about entrepreneurship, ambition, and whether to keep your startup small and just you, or grow it into something much bigger but with different responsibilities.

When I started NewsGator, it was just me, plus some outside help from whoever I could talk into having a burrito with me (you know who you are!). For the most part it stayed that way for a year or so, I enjoyed it immensely, and it had become what the cool kids are calling a lifestyle business. But for me, personally, I had bigger plans, and took on outside investment in order to build it into something larger, with a scope so much wider that I just couldn’t do it all myself.

Now, the company is about 100 people, and I’m tremendously proud of what it has accomplished.

But somewhere along the way, something touched me in a profound way. One holiday season we had a week where everyone had an envelope with their name on it stuck to the wall in one part of the building. The idea was to write anonymous notes to other folks, presumably saying nice things about them, or thanking them for something they’ve done. At the end of the week, everyone took their own envelope and read the things people had said. In my envelope was a note I will never forget. Paraphrasing:

“Thanks for starting this company. Because of NewsGator, my family has been able to afford a home.”

I’m not one to get all sentimental, but reading this note choked me up.

Up to that time, I had spent a lot of time thinking about we were affecting our customers’ lives. But I hadn’t really thought a lot about how we were profoundly affecting our employees’ lives as well.

An unexpected benefit of starting and growing a company.

Do More Faster

If you haven’t yet, you should take a look at Do More Faster, a book by Brad Feld and David Cohen about the experiences of early-stage investors and entrepreneurs.

I’ve even got a chapter in there myself, called “Don’t Plan, Prototype!” It’s essentially a couple of pages talking about the very early stages of NewsGator, from the sitting-around-scratching-my-head stage up to our first venture financing. I wrote it and slipped it into a stack of manuscripts David had laying around…somehow they didn’t notice, and it made it into the book. :)

Anyway, you can pre-order the book now at Amazon. Check it out!

Implied Volatility

As many of you know, I’ve been spending much of my time lately trading stocks and options. It’s been quite an adventure – I went from being a buy-and-holder starting in the mid-90′s, to a day trader who thinks of a long-term position as something I hold over lunch. :-)

The longer-term positions I do hold are usually option positions. Over the last year or so, I’ve been learning the ins and outs of option trading; the greeks, the vix, implied volatility, all of that. I remember one of the first articles I read about the greeks – all I could think was, how am I supposed to remember all this? But as time goes on, things all started becoming more clear.

Except, of course, for this concept of implied volatility.

Now, just like everybody else, I read that there’s this thing called the Black-Scholes model for option pricing, and you plug in a bunch of stuff and out comes the price of the option. Most of what goes into that calculation (or one of the other options pricing models) are facts – the current stock price, time to expiration, etc. But part of what goes into that is this notion of expected, or implied, volatility.

Hmm. At first glance one would assume this implied volatility has something to do with the historical volatility. While that’s partially true in most cases, it’s not a good assumption.

augen1.jpgAnd then finally, out of the blue, it all clicked. I was reading The Volatility Edge in Options Trading by Jeff Augen, which is a fantastic (but definitely non-beginner) book which discusses some statistical approaches to option trading. And somewhere in this book, it all suddenly became clear.

At a given moment in time, where all other things are equal (so all other variables are fixed), the price of an option is related to its implied volatility (IV). If IV goes up, the price goes up.  Ok, great. Didn’t need a long blog post for that.

But you can also think of it the other way. If price goes up, IV goes up. And make no mistake – fancy equations aside, options are priced based on supply and demand.

IV isn’t something magical that’s calculated by “them”, and foisted on the rest of us. Rather, one can think of it as a way to express how much premium exists in an option. If an option is trading on the offer, you’ll see IV higher than if it’s trading on the bid, because the transaction price is higher.  If you buy enough of them to drive up the price, that will manifest as a higher IV.  And in the last few hours of option trading on expiration Friday, when there’s technically still a day to expiration (equity options technically expire on Saturday), you’ll see the IV drop to nearly zero in order for the option price to drop to its intrinsic value.

I’m sure many will argue, and most won’t care…but this was really the last piece of the way options are priced to “click” for me. So I wanted to write it down, in the hopes of helping someone else get through it all a little more easily.

Changes afoot

Over 7 years ago, I wrote a blog post that changed my life. It was just a screenshot of some prototype code, and a short 15 words. But it inspired the creation of NewsGator; about six weeks later, I released NewsGator 1.0 and the journey had begun in earnest.

Now, 7 years later, NewsGator is much more than I ever imagined it would become. It has found its market in enterprise social computing software, and employs over 80 people in multiple countries. The team of folks at NewsGator are the best I have ever worked with; they are truly top-notch in every way. And in 2009, the company exceeded all of its revenue goals for every quarter and for the year as a whole, and counts many of the largest companies and governments in the world as its customers.

It is with this wind at my back that I have decided to move on from NewsGator, and find the next thing for me. What that next thing is I don’t know; I may spend more time with my fashion photography, I may spend more time trading, I might do some consulting work, or I might involve myself with another startup. The future is wide open, as they say.

I’m tremendously proud of what we’ve accomplished, and happy that I had the chance to build this company from one guy in a spare bedroom, to what it is today. I will remain on NewsGator’s board, and I look forward to whatever happens next!

Project 365

Well, it’s been 6 days now, so it seems I’m committed enough to tell you all about this. :-)

Many of you have seen my photography work…however, what I’ve found is while I do take a lot of photos, they’re generally part of some sort of fashion-related shoot, and there’s at least as much (often more) time in setting things up and logistics as there is in actual photography. I don’t really seem to just get out and take pictures just for the fun of it – so this year I’ve decided to change that.

Inspired by this Project 365 article at Photojojo, and many other related posts, I’ve started a Project 365 of my own. I’ll be taking a picture every day in 2010, and posting them on my new site (Greg’s Daily Photos). No particular theme, just whatever strikes my fancy that day. Or whatever I see on the drive home. Or whatever’s in the airport while I’m waiting for a plane!

So today is day 6. To get you caught up, here are thumbnails of the pictures so far:

#1 - A splash after work #2 - shakin' it #3 - It will warm up eventually
#4 - Speedy, watch out! #5 - Pink and Gold #6 - North Woods Inn

I have some local friends who are doing this too, and you can see lots of folks on Twitter as well!

My take on Apple’s Magic Mouse

Never one to let new toys sit on store shelves too long, I picked up a Magic Mouse as soon as they were available in the local Apple stores. I was one of those rare folks who actually liked the mouse-formerly-known-as Mighty Mouse, so thought I’d write about it from that perspective.

First, I love the scrolling action when you slide your finger on the mouse. _Love_ it. I also find that I really like the momentum scrolling option, which, like the iPhone, dampens the scrolling effect when you lift your finger rather than stopping abruptly. I thought I’d hate the momentum (makes sense on the iPhone, but on a computer?!?), but it didn’t take long to get used to it, and then like it, and then actually be bummed when it didn’t work well in an app. The only app I’ve found so far that it doesn’t seem to work well in is Tweetie; I think it is actually working, but it’s so highly damped that you can’t really tell. [I saw a tweet from Loren saying he’s waiting for his mouse to come in so he can work on it.]

If you want to stop the scrolling abruptly, like other mice, just don’t pick up your finger when you’re done scrolling…and it will stop in its tracks. Perfect.

The only scroll-related gotcha I’ve found is when you’re in an app where you can scroll down one line at a time (the example for me is the ThinkOrSwim trading app, looking at level 2 quotes, trying to scroll down one line at a time)…with the mighty mouse, it was easier to scroll down just one line, or three lines, or whatever you wanted. With the magic mouse, it’s still possible, but takes some finesse, which I haven’t mastered yet.

The other thing I really like is the fact that you can use the whole surface of the mouse for scrolling. Sometimes I’ll be reading a long web page, and take my hand off the mouse. Now when I want to scroll down a bit, I don’t have to position my finger right on the scroll ball, but in fact can just stick a finger anywhere on the mouse and scroll around.

Right-clicking on the magic mouse works exactly like it did on the mighty mouse, which works well for me. The two-finger swipes to go back and forward in a browser do work…but I haven’t trained myself to do it yet. It’s a touch awkward now, IMHO, but who knows, maybe I’ll grow to like it.

I do miss the extra buttons on the mighty mouse, which I had assigned to dashboard and expose. My hope is that Apple maybe adds some options in the mouse preferences to re-map the two-finger swipe to other functions, so we can customize the behavior to our liking. Or perhaps there are other gestures the mouse can recognize that just aren’t implemented in the driver yet. I’m not holding my breath, though. :-)

All in all, I like it a lot. I’ll probably end up buying another one for my other computer now. And, in case you want one, here are make-me-rich Amazon links for the Magic Mouse and the wired mouse!

FeedDemon, NewsGator, and Mr. Bradbury

Way back in 2005, NewsGator acquired FeedDemon. I vividly remember sitting down with Nick Bradbury and talking about our shared vision for the future of FeedDemon and the NewsGator platform…and many a night drinking a lot of beer and talking about RSS and what we now call social computing. Through it all, Nick remained laser-focused on both the future of FeedDemon, and his customers and how they would be brought forward.

Along the way, we added NetNewsWire to the family, as well as SmartFeed (renamed NewsGator Go! for Windows Mobile). All of it was part of building out the original vision for a core online content platform, and best-of-breed applications on nearly any device to consume content. All in all, I think we delivered on this vision – we built the platform, added the best applications on the most popular platforms, and made it all work together.

Since then, as you may have gathered, our enterprise business has grown faster than we anticipated (this is a good thing!). As the company has started to focus more and more on enterprise customers, we made the difficult decision to shut down NewsGator Online, and focus our online platform in on our commercial clients. As part of this transition, most of our client applications (FeedDemon, NetNewsWire, and NetNewsWire for iPhone) were re-released to sync with Google Reader as an online store, rather than NewsGator Online.

As part of that transition, Nick has gone “back into the wild” as an independent developer. FeedDemon remains a NewsGator product, but Nick is 100% focused on it, and he has complete control over the product direction and feature set. I like to think of this not as the end of anything, but rather the beginning of the next phase of FeedDemon’s life. Just as the initial deal with NewsGator opened up new opportunities for it, so does this new direction…and FeedDemon customers will see lots of exciting things coming up.

On a personal note, I’d like to extend a big “thank you” to Nick, on behalf of myself and everyone at NewsGator. Nick has been instrumental in forming our consumer product direction, always makes sure we’re taking care of our customers in the best way we can, and has provided a huge amount of input on our other products. He’s been a very influential person at the company, and we look forward to this continuing in the future!