Mac Pro fortune cookies

TUAW has an article up today wondering if Thunderbolt might mean the end of the line for the Mac Pro in its current form:

The arrival of the Thunderbolt interface, Meta Media says, will allow Apple to return to its beloved sealed-box model of computer production with no user-serviceable parts inside, just like the original Macintosh. No expansion cards, no hard disk upgrades, just Thunderbolt (aka Light Peak) interfaces to connect … well, to connect anything you like really.

The comments to that article are full of opinions, as expected. As someone who uses a Mac Pro every day, I’ve thought about this off and on for the last year or so. Thunderbolt definitely changes the game, providing two 10Gbps channels on one cable.

The big differentiators for the Mac Pro today over the other models in Apple’s lineup are CPU, RAM capacity, display capabilities, and internal storage. CPU and RAM are both significant, but the lower end machines are making this up quickly – witness the impressive performance of the new Sandy Bridge-based Macbook Pros. A next-gen iMac could be quite impressive on these fronts if Apple chose to push the envelope.

As for internal storage, the MP has four internal drive bays for SATA drives; I have all four filled in mine. However, a Thunderbolt port with two 10Gbps channels for external drives would certainly suffice, even compared to a potential future MP with 6Gbps SATA…and for the folks who really need the I/O performance – folks editing HD video, say – Thunderbolt RAID systems could be a step up over what they can do now with 2/4 Gbps fiber adapters.

Multiple displays make up another area where the MP shines – it’s the only Mac where you can have more than two displays (not counting network- or USB-connected displays of dubious performance). I use three (with two video adapters), and I know folks with more. While I could get by with two large 27-30 inch displays myself, there are others who would not be so understanding. As I understand it, Thunderbolt supports one Display Port display at the end of the chain. Seems to me a future MP replacement would ideally need to support at least 4 2560×1600 displays to be accepted by the real power users, so Thunderbolt isn’t helping too much here…unless they built in more ports.

In any case, it appears to me that Thunderbolt definitely enables Apple to make some real changes to the MP line if they want to, specifically with respect to storage and other peripherals that have traditionally used PCI Express. They could either redesign and slim down the existing MP by getting rid of most of the internal drive bays and the space used by the PCIe slots, or potentially even drop the MP completely in favor of a “super-iMac”.

Time will tell.

Choosing a colocation vendor – power and cooling (part 3)

In part 1, we had a quick overview of things to think about when looking at colocation vendors and data centers. In part 2, we looked into your network and your bandwidth usage. Today, we’ll talk about power.

I pretty much ignored this when I first moved into a top-tier facility. I assumed if I was leasing one rack of space, they’d connect up enough power for me to fill that rack up with servers, and I wouldn’t need to worry about it.

In reality, that was far from the truth. Power is the most important thing to think about in a data center.

Let me say that one more time, just in case you missed it. Power is the most important thing to think about in a data center. And you should spend some quality time thinking about it.

Power density

Here’s a scenario, which, uh, may or may not be based on a true story. You’re growing fast. You need servers, pronto. And you want to make sure you have enough room to scale to more servers. So you call IBM, and the sales guy comes in with small army and they start talking up their blade servers. And you just about fall over…not only do they look cool, but you can fit 14 blades in one 7U chassis! Six of those will fit in a rack, and you do some mental math, thinking about how many processor cores you can fit in those racks you just leased at your hosting facility. Growth problem solved. You’re almost ready to pull the trigger.

You just need to make sure you have enough power outlets in your rack to plug these babies in. You call your host’s engineer on the phone, bragging about how many processor cores you’re going to have, and has he heard about the new Binford SS-9000 blades with the 10-core processors? And you hear him tapping away on his keyboard in the background, and you’re just not getting the excited reaction from him you were hoping for.

Then he points out that those blade enclosures you are talking about have four 2300W power supplies each. Six enclosures. That’s 55 kW. And while you’re unlikely to actually use 55kW at any given moment, even say 25 kW would be a lot.

No problem, you think. I’ll just keep adding power circuits as I keep adding blade enclosures, as my business grows. What’s a few bucks for power when I’m getting 140 cores in 7U? This is gonna be great.

But over the course of the next half hour, as he explains the data center’s version of the birds and the bees to you, you start to see the light. See, the problem isn’t whether or not they can drag in enough power cables into your racks. They can.

The problem is cooling.

Every data center has some amount of power they can dissipate per square foot. It’s essentially the capability of the cooling systems they have. Some facilities are more efficient than others, but everyone has a number. And you can’t go over it. So you can have that rack that’s got 6 enclosures full of blades if you want it – but you might have to have, say, 100 sq. ft. of empty space around it to ensure it can be cooled. And yes, you’re going to pay for that space!

In real life, you will often end up leaving empty space in some of your racks for just this reason.

So now you know. Power density is one of the most important things you need to think about as you’re planning your data center future. Talk to your hosting company’s engineers about it; you’re not the first one to have questions about it, and it’s going to affect you. If not now, later.

Multiple power circuits

On its way to your rack, your power has to come through a bunch of distribution equipment. Someday there could be a failure in some piece of equipment, out of your control. So, if you are allowed to (and you should be), you should have power from multiple independent circuits coming into your equipment.

Mission-critical servers that will cause you pain if they go down, like database servers and such, should probably have multiple power supplies, and you should make sure each server is plugged into at least two independent circuits.

Other more failure-tolerant equipment (or as I like to call them, “disposable”) could be plugged into a single circuit each. So if you have 10 web servers, maybe plug 5 of them into each circuit.

But here’s the important part about this. Do some modeling as to what exactly will happen if you lose a power circuit. Depending on what’s connected, and how, it’s likely that your other circuit will need to absorb some of the load from the circuit that went down, and is now drawing more current. Make sure to model these loads (call your equipment manufacturers if you need more data from them), and understand what will happen in different power scenarios.

And while I’m thinking of hard-learned tips, here’s another one to think about while you’re doing your power modeling – don’t load your power circuits up anywhere near their max capacity. Something like 50% would be more reasonable.

At one time we were living on the edge in terms of power in one particular rack, because we didn’t do this modeling. For whatever reason we ticked over the max on one circuit, and a circuit breaker tripped, taking it down. This caused a small surge on the other circuit due to the power supplies connected to it having to work harder. (can you guess what’s coming?) And then, you guessed it, this additional load on the second circuit caused its circuit breaker to trip. Two circuits, two breakers, no power.

Do your modeling. It’s not optional.

Choosing a colocation vendor – network and bandwidth (part 2)

In part 1, I gave a quick overview of some things to think about when choosing the data center vendor you want to colocate with. Today, we’ll talk about one particular topic, the network and bandwidth.

At a high level, there are three parts of your network: the external connection to the internet, your internal network inside your own firewall or router, and the connection between those two networks.

Other than research, there isn’t a lot you can do about the external connection to the internet. But if you go with a top-tier hosting company, and you should, then they know what they’re doing, they’re really good at it, and they can keep that connection up. You should learn about it, and what kinds of connections they have, the available bandwidth, redundancy, and all that, but once you are comfortable you can worry less. Just make sure your growth projections don’t end up with you using an appreciable percentage of their total bandwidth. Also ask about things like their capabilities around things like denial-of-service attacks and such; they should be able to tell you if and how they can help if you run into network-related issues like that.

If you think you will eventually need to be hosted in multiple facilities, and your vendor has suitable ones, then ask about interconnections between those facilities. In many cases you will find they have private connections between their data centers, so ask about the available bandwidth and how that is priced.

On the opposite end of things is your own internal network that you design. I won’t touch on that, as only you know your requirements, and your network folks can do a great job there.

It’s the middle part that’s worth thinking about. Your firewall (or router) is connected to some piece of equipment that’s managed by your host. Sooner or later, that equipment needs to have a firmware update, or a new power supply, or something else. It will go down, if only for maintenance; everything does eventually. So think about the effect of that. If downtime is not acceptable, then make sure you can get (at least) two ethernet connections, connected to different equipment on their end. And on your end, you’ll need your own equipment which is capable of managing and failing over between those connections as necessary (two firewalls, for example, with a failover mechanism).

And on the topic of bandwidth, you’re a grown-up now in terms of hosting. You don’t buy 500GB of “bandwidth” per month any more; you pay for usage in megabits per second (Mbps). So if your system sustains 30Mbps most of the time, that’s what you will contract for. Your host will measure your sustained bandwidth, probably at the 90th or 95th percentile, and charge you overages if you go over your contracted amount. You may also be able to specify burst capability; so for example maybe you contract for 30Mbps sustained and 100Mbps burst, and they will cap your max bandwidth at your burst rate.

So that’s all pretty straightforward, and probably not a lot of surprises there for the startup CTO. Tomorrow, we’ll talk about power and cooling in part 3 – and that’s the part you definitely don’t want to miss.

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), (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 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!