Category Archives: Two Cents

The market is depressed it’s not the “Depression”

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The market had a huge day today with the Dow rising 936 points!  Following the biggest rise in the markets history I thought I would post a few figures from Friday for all the people who pulled thier money out the market last week in a panic and who most likely are questioning the move after today.

As of Friday’s closing bell the US martkets were down ~ 18%, EU markets ~ 25% and the Asian markets ~ 30%.  While an 18% slump sucks is it enough to make me panic?  Well let’s look at a few additional indicators today vs. the "Depression"

  Today "Depression"
Industrial Production

 Down ~ 1% Down ~ 44%
Unemployment ~6% ~ 25%
Housing payments in the rears ~ 4% ~ 40%

The market conditions today are a long way from the conditions in 1929.  Things look much closer to the market crash of 1973/74 where the Dow lost ~ 45% of its value.

Now let’s look at an investmetment made in 1972 and present day value.  This would be representative of a thirty somethings investment today with a retirement target cashout.

I looked at an investment in XOM made 01/70 and sold today, even following last week the gain is ~ +843%.  The Dow inthe same time perios is ~ +1060%.

I also looked at the past 10 years from Oct 1998 til today which shows a ~ +107% for XOM and ~ +19% for the Dow.

Conclusion, the market is not a place to put your cash if you need liquidity.  As a long term investment the market is the place to be!

A rant on the economic situation…

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Let me start by saying this post has little to do with IT at least not directly.

Anyone who knows me knows that today is Friday which is “Dadddy & Maddy date night”, for those of you who don’t know me on Fridays my wife gets to take a break as Mom and enjoy some adult interaction while I get to enjoy my daughters company, usually at Johnny Rockets.  I usually get a hamburger and Maddy gets a hot dog or chicken fingers and we talk about how her week was.  Lately she talks a lot about her good friend Ashna who she seems very fond of.  Tonight we had a really nice dinner and now we are home to “Party Like Rock Stars” (Her words not mine, this is how she articulates staying up and watching a movie with daddy, tonight’s movie selection is Narnia.  With some time on my hands while she enjoys the movie it gives me an opportunity to express my anxieties using the written word.  Anyway this brings me to the point of this post.

For the past 2 weeks I have been listening to people complain about the market.  Today’s train ride into NYC was especially irritating and it seems with each passing hour I get more irritated.  What kills me is in a typical American, spoiled brat like, I want it all fashion every comment places blame on “Wall Street”, corporate CEOs, predatory banks, yada, yada, yada!!!!!  I have yet to hear someone say man I f’d up, I am under a mortgage payment I really can’t afford, I should have known this when I singed up for that Power Option ARM.  I have two BMW lease payments that are nearing their 36 month term, I should have just bought a couple of used Honda Civics, etc… what was I thinking.  My only option is to pull my money out of the market now at a massive loss.  I can’t blame the market for this only my own stupidity, this would not be as big of a deal had if I just exercised better judgment and some prudence.  The following are examples of what I am hearing when listening to people talk about their perception of the economic situation.

  • People seemed to think that the market was a high yield savings plan made available to the upper middle class and the wealthy that would continue paying ridiculous returns forever therefore they took a unhealthy position.
  • I make 35k (example) a year, 2K a month net, I have no savings and a $500 a month car payment but this nice man in blue pinstripe suit is telling me I can afford a 300K mortgage.  The guy in the suit may be a predator but you let yourself be his prey.  His greed and your greed screwed all of us!
  • I sunk all my money into real estate as an investment vehicle assuming the real estate market would continue to endlessly climb.  To compound the issue I used the financial programs developed by the predatory bankers, physicists and mathematicians and completely disregard historical real estate market volatility.  BTW – I have no savings or other investment vehicles and I was relying on the historically documented volatile real estate market defying history this time around.
  • I did not find it odd that my monthly mortgage payment was less than the loan amount divided by 360 (BTW – since I have little faith in human beings these days 360 months is a standard 30 year mortgage term).
  • etc…..  The list goes on and on.

How depressing is the stupidity depicted above.  To me it is far more depressing than the money I am losing in the market right now.  To quote Ron White, “You can’t fix stupid”.

The bottom line is that if you are one of these people you either hoped to rent a life above your means forever or maybe you thought you would rent for a while with an option to buy in the future.  I am pissed off, the idea or re-capitalizing mortgages so people can stay in homes they could not afford in the first place makes my blood boil!  The Fed is now developing widespread social welfare programs to attempt to resurrect our Stupocracy.  Regulation, social welfare programs and whatever other rhetoric the Fed comes up with will not be an answer for the epidemic stupidity plaguing our countries citizens.

Economies are based on the simple concept of supply and demand.  Sometimes supply creates demand and sometimes demand has a way of finding a supply.  In the case of the financial programs of the past few years let’s not forget that the demand never slowed.  The banks were in a state of economic euphoria so they were not thinking straight, but the vast number of consumers consuming these obviously dangerous products like power option arms, interest only loans, no income verification loans, 50 year fixed rate mortgages, etc… consciously disregarded logic to satisfy greed in many cases.

If we continue on our current path of having our cake and eating it too we are doomed as a country!  We are in a downward spiral because the prophecy is self fulfilling, too many people have leveraged positions in stock market and real estate when they should not, this is forcing massive sell offs because people need cash.  There is no quick fix, politicians are in full bullshit mode with the election 30 days away they want the uneducated and impressionable listening to feel good about their rhetoric when in reality they have no idea what to do about our financial crisis.  The fix here is rational and prudent behavior, yes it is going to take time to undo the irrational behavior of the past but the only way to fix the problem is to sleep in the bed we made.  This is not a domestic problem, the world economy is suffering as bad and in many cases worse than we are.  Only we can fix this mess we made, take some damn ownership and change your lifestyle!

I have carved out a decent life for me and my family, managed to intelligently accrue a decent nest egg which is loosing double digit figures almost daily these days but I am hoping I am intelligent enough and liquid enough to try to capitalize on this.  I am amazed by the 30 somethings in a full panic, taking major losses when they should be viewing themselves as having 30 years of runway to recoup their losses, pushing more money into the market today and lowering their cost basis and decreasing the time required to recoup their loses.  Instead unhealthy positions have many 30 somethings in a situation where absorbing the loss and taking the cash is the only option.

The market is not much different than the blackjack table, but in the market counting cards is welcomed, encouraged and expected.  It is all about being cool, waiting for the shoe to turn and having the bank roll to capitalize when it does.  If you panic, become greedy or spend your bank roll to early you may leave injured!

Tighten your belts, double down on your investments and there may be something at the end of the rainbow.  This is my advice and I am taking it, I am cutting back on personal expenses to double my monthly cash into the market.  This is time for measured investment, dollar cost averaging, reducing your cost basis and buying and holding as the market stabilizes.  Never forget the bottom is 0, but if that happens the cash you pull out of the market will be worth 0 as well, remember the tender you are walking around with is only as valuable as our capital markets, there is no gold bullion backing that paper!

Keep a positive perspective, the markets will turn and hopefully you will be there to benefit in some positive way.

Thin Provisioning 101

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I was asked by someone for a quick overview of Thin Provisioning and when I view this as an valuable or applicable technology.

So let me start with a quick simplified visual overview of both Thin Provisioning and Traditional (aka Thick)Provisioning.

thin_provisioning_101

So now that you understand the concepts of Thin Provisioning and Traditional (aka Thick) Provisioning let me quick talk about the only where I see Thin Provisioning as a valuable technology.

I look at Thin Provisioning in the same way that a Disaster Recovery (DR) provider looks at taking on new customers.  If storage is your business (i.e. – You are offering a shared storage model to customer co-located in your data center) then Thin Provisioning may be a key ingredient to your business model.  Let me expand on this, DR providers like SunGuard oversubscribe their data centers hedging that 100% of their customer will not have a disaster at the same time (BTW this has happened and put the provider out of business).  Thin Provisioning works in the same way by providing the user with the belief that they have 100% of the capacity while in fact the capacity may be over provisioned and the storage service provider (SSP) is hedging that 100% of the user co-located on the storage array will not demand 100% of the resources at the same time.

There are some very minor management benefits that I outlined in the pictorial above but IMO given some of the pitfalls associated with Thin Provisioning these do not provide a compelling reason consider Thin Provisioning.  Read and interesting article here that outlines one very real issue encountered with Thin Provisioning and NTFS.

So in conclusion if you are SSP of some sort consider Thin Provisioning otherwise go thick or go home 🙂

The perception is emerging but the reality is legacy…

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The market perception seems to be that iSCSI is gaining tremendous steam and many customers who would have adopted Fibre Channel as their interconnect a year ago are now adopting iSCSI. I would agree that this is the case but iSCSI is not an emerging interconnect and might be better classified as a legacy interconnect which is now experiencing a newsworthy adoption rate. An early concern of iSCSI was the performance penalty associated with TCP operations and the impact of software based initiators, this spawned the TOE (TCP Offload Engine) which would offload TCP calculation from the system CPU to a dedicated onboard processor dedicated to TCP operations, today most iSCSI implementations leverage software initiators (today system CPU resources the most part are so under utilized that most environments will never notice a 10% CPU utilization increase that may be associated with iSCSI). Some vendors addressed the TCP concern by modifying the iSCSI protocol to ride on UDP as opposed to TCP thus increasing performance via proprietary protocols which resemble iSCSI (i.e.- LeftHand Networks, HammerStorage and Zetera). It is important to note that LeftHand has pretty much abandoned the proprietary protocol they started with and has now adopted the iSCSI standard, it is also interesting to note that their adoption rate seems to have increased since doing this, when you are a new player I think evangelizing your protocols superiority over the standard is probably a tall order. LeftHand has also changed morphed their business into a software play and embraced the VMware Virtual Appliance Markerplace as a way to propagate their technology.

There are a number of emerging interconnects that technologically out shine iSCSI the question is how quickly can the market makers move to adopt these technologies, are the market makers interested in accelerating the adoption curve? This is a complicated question, on one hand you could argue that technologies are more stable once they have been around longer (I remember reading papers on iSCSI in 2001, did it really take 7+ years to get iSCSI to where is today?) on the other hand if the market makers validate these technologies too early they run the risk of fierce competition from more nimble startups. It is a complex problem, my feeling is that for the most part the adoption cycle is slowed by the market makers as a way to recoup development cost and and slow competition. IMO the by product of this is a slower innovation cycle.

AoE and HyperSCSI both offer the interconnect price point of iSCSI without the performance burden associated with TCP. AoE and HyperSCSI ride on Layer 2 and do not experience the protocol overhead associated with Layer 3 protocols. SoIP (Storage over IP) uses UDP as the transport protocol as opposed to TCP. We are also seeing the emergence of iSER and iWARP, next generation TCP technology that closely resembles Infiniband. iWARP (Internet Wide Area RDMA Protocol) is a superset of the VI architecture and is aimed at reducing the overhead associated with TCP, iSER (iSCSI Extensions for RDMA) maps the iSCSI protocol over RDMA networks like Infiniband or iWARP. iSER address the overhead associated with TCP and out-of-order packet delivery. How many of us hear about these protocols?

It seems that the majority of marchitecture effort is being put into FCoE (Fibre Channel over Ethernet). Major players such as Brocade, Cisco, EMC, Emulex, QLogic, IBM, Intel, Sun and Mellanox have all gotten behind FCoE in a big way so most likely this will be the next big thing in storage interconnects. The emergence of technologies that further leverage Ethernet as the interconnect will change the game, it is hard to imagine that Cisco’s dominance will will not continue to grow. It is likely that more storage services (i.e. – replication, snapshots, etc…) will be handled at the network layer, as these services move into the network layer we will continue to see the further commoditization of the storage market. Should be interesting to watch over the next few years.

While on the surface protocols that sit on top of Layer 2 (AoE and FCoE) may seem to be superior there is a tremendous amount of functionality that is provided at Layer 3 so it is not a forgone conclusion that FCoE will will the battle. Right now the only forgone conclusion I can see it that Cisco wins regardless, the others will be battling for a piece of the pie. But who knows anything can happen, after all this is technology.

Kudos…

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In the midst of what I would call many lack luster decisions, Sun Microsystems has adopted an incredible strategy to drive awareness.  Sun is a first mover in the corporate adoption of YouTube to as a means demonstrate new technologies and message to the YouTube generation.  Sun fostered their phenomenal growth by fueling a SunOS generation through the pervasive deployment of IPC and IPX boxes throughout higher education, I am a product of this tactic.  Once again I think they are on to something revolutionary.  It is impressive to see Andy Bechtolsheim demonstrating Sun technology and obvious to me that Sun values this medium as a way to reach future decisions makers.

-RJB

SMP clusters and virtualization post response

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On September 14, 2006 aweeks on VI411.org responded to my SMP clusters and virtualization post by stating that Don Becker’s statement is “ignorant”, a word I intentionally avoided in my original post due to the harsh tone. Let me further clarify my original post by stating that I believe most pioneers like Don Becker need to be arrogant! They are blazing the trail and in my opinion arrogance begets fortitude. Don Becker’s idealism causes him to ignore the fact that Microsoft owns a large portion of the market and x86 virtualization solves inadequacies in the Micro$haft Windows operating system. Again his ability to disregard this truth can only be viewed as an attribute when trying to develop a superior emerging technology. There is a place for x86 virtualization today but who knows what the future will hold. After reading aweeks’ post I realized that I was the “ignorant” one to not understand and commend Don Becker’s hard line aggressive view. In a world of David and Goliath where marketing spin suppresses innovation and stifles technological advances, I am glad there are people like Don Becker.

-RJB

SMP clusters and virtualization

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I was recently forwarded an article by a co-worker entitled “Virtualization doesn’t solve any problems”. First let me say that I think the title should maybe be revised to “Virtualization doesn’t solve all problems”, but did anyone ever claim that it did? To say virtualization doesn’t solve any problems is a bit arrogant and I think uninformed. The intelligent virtualization user / implementer is aware of the current limitations such as I/O bandwidth constraints. Virtualization is not a one size fits all but it is a size today that fits a much larger market segment than SMP cluster ting. While there is a segment of the market such as life sciences that is dealing with the need for massive parallel processing and incredible I/O requirements a much larger market segment is struggling with aging infrastructure, massive under utilization, server sprawl, growing environmental costs (hvac, energy, floor space, etch..), and the need to simplify recovery. While SMP clusters are near and dear to my heart (I worked in the life sciences field tweaking code to streamline molecular modeling computational operations, we used SGI at the time Linux HPC and products like Beowulf were just not there) they still have a way to go before they become mainstream, one of the great things about virtualization is the plug-and-play befits, the ability to move from the physical to the virtual and realize benefit immediately. Often in the SMP world applications need to be modified to take advantage of the new compute power. Virtualization players VMware, XenSource, VirtualIron and others are working on hypervisors that hold the promise of the simplicity and functionality that more complex SMP clustering applications provide.

On a final note there is another interesting quote “Virtualization addresses the same problems, such as server glut and management complexity, as clustering does — and it doesn’t necessarily do a better job of solving them” I don’t think that I agree with this statement. There are soft benefits that are just as important as the hard benefits such as server consolidation, environmental cost savings, etc… VMware emerged as the early player in the mainstream visualization market as an offshoot of a Stanford project called the Hive OS, today the Hive OS project is part of a larger project at Stanford called FLASH (FLexible Architecture for Shared memory). I recommend reading about the Hive OS to understand the befits such as isolation that virtualization provides.

Anyway I think I am done for now. I would enjoy hearing your thoughts and/or comments.

-RJB

Podering the use of LC-FC and ATA disk drives

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So I have been reading other storage industry pundits’ opinions on the uses for LC-FC (Low Cost Fibre Channel Disk) and ATA (Advanced Technology Attachment) disk drives.? The? use of ATA disks in mid-tier storage devices and virtual tape libraries as a primary disk-to-disk backup (D2D) and/or archiving target has become quite pervasive.? While the drives lack some fibre channel (FC) features like tagged command queuing and the mean-time-between-failure (MTBF) is not as high as a fibre channel drives they work well in applications like backup-to-disk (B2D) due to their ability to achieve tolerable sequential read and write speeds.? The industry as a whole has now begun to leverage LC-FC disks in enterprise class storage subsystems, while fundamentally this is a great idea, the marketing and packaging of these solutions needs a bit of work.? Most enterprise class subsystems leverage platform software for functions like snapshots and replication, many vendors price these platform software applications by capacity.? Why would anyone install 500GB LC-FC drives in an enterprise class subsystem and push their platform software licensing through the roof.? It would more cost effectively purchase a mid-tier storage device with 15K rpm fibre channel drives to use as a tier 2 or 3 storage platform, this solution would also most likely be higher performing.? This is a fundamental problem, if a storage device can truly accommodate multi-tier storage requirements why should the addition of tier 2 or tier 3 storage capacity where functionality like synchronous or asynchronous replication are typically not required raise the cost of my platform software licensing?? Until this is resolved it will be difficult to realize the vision of a single multi-tier platform.

-RJB

Cisco is at it again…

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Not sure how many of you have seen the press on Cisco taking a 80% stake in stealth startup Nuova Systems.? Nuova System is a reincarnation of the Andiamo group which spun back into Cisco and today is what we all know as the Cisco MDS (SAN switching) product line.? There is little out there on Nuova Systems but the buzz is that they are working on a virtualization technology.? I guess the question is with all the money and power Cisco wields, does Brocade/McData stand a chance?? Does Brocade/McData have what it takes to innovate, or will the market goliath (Cisco) out innovate the smaller more nimble competitor?? With alliances like this it certainly looks that way.? One has to question the time that will be spent on the integration of the Brocade and McData product lines and positioning, and how much time this will leave for technology innovation.? It will be interesting to watch how this one unfolds.

-RJB