Kennedy Technology Group Weblog!

What will a future Cloud Computing ecosystem resemble?

2009-06-06T14:26:33-07:00

The ability for a company to tap into “externally owned and operated” computing capacity “just in time” with “pay as you go” billing and “elastic scale” are key features of the growing alternative computing approach known loosely as “Cloud Computing”.

I discuss thoughts on the evolution of this new computing paradigm on my personal blog - Orchestrations.

Pandora now available on blackberry

2009-04-13T11:34:50-07:00

Pandora has been available on the iPhone since software version 2.0 was released last summer with the 3G model. Announced this week, Blackberry users can now also enjoy personalized Internet radio on their mobile devise.

Pandora is based in Oakland, CA. Additional information can be found here:

http://www.pandora.com/blackberry

Looking for a job with a startup?

2009-03-06T14:04:57-08:00

Tom Pattterson does a great job of expanding on the advantages and disadvantages startups have in finding talent in this blog post.

“I think at the highest level everybody looks for 3 things when trying to employ talent to their companies…. People typically look for people that are

Intelligent
Motivated
Highly Functional in a Group Environment… “

This is also a good read for those of you building a start-up or smaller business, and for workers considering joining any new organization, in that it provides insight into the importance of vision, fit, and value system.

IT job loss; reflecting inwardly

2009-03-06T13:10:33-08:00

It’s tough out there for everyone and IT workers are not immune. There was a fairly passionate debate on Tech Republic this week surrounding considerations for dealing with job loss, the importance of thinking forwardly and not letting your emotions take over.

As difficult as it is to swallow rejection, both emotionally and financially, it’s pretty empowering to know that, in reality, our lives change infinitely faster than these “experiences” immediately before us. Victor Frankl talked about this in much of his writing on psychology. In these troubled economic times, I’ve found it’s helpful to reflect inwardly. Having a close group of confidants and a large professional network who know what you‘re about (at the core) is a tremendous asset.

Best wishes to all the passionate IT workers out there in job transition.

A Sirius Problem

2009-02-11T12:17:54-08:00

Some of you may be following what’s happening with Sirius XM Satellite Radio.

I’m a long-time subscriber, shareholder, and believer in the business model, though it looks as though I could be sitting on a lonely planet :0.

Their stock has dropped 96% of its value since last July’s merger between the firms. They have about 3.2B in debt, with 175MM maturing next week, and a couple other big tranches due this year. Stock closed at $.06/share yesterday. On the bright side, Revenue run is nearly 1.9B and subscribership more than doubled over the last year with nearly 19M listeners!! But they don’t seem to have a path to profitability and marketing and programming costs are growing rapidly. Management is perceived by many to be a major issue.

They are considering bankruptcy options and have also been approach by mogul Charles Ergen to do a deal for debt and cash in exchange for control of the company. Mentioned in the WSJ today.

I sure hope they make it! I listen all the time, especially Hearts of Space on SPA, weeknights at 8pm PST spacefans!

GDP An Overview for the IT Manager

2009-01-13T14:08:46-08:00

In light of the current economic downturn and the need to continue to get our personal and organizational fiscal shops in order, i thought it would be helpful to provide an overview of GDP -- including its components, implications and uses, and its history.

Gross domestic product, or “GDP”, is commonly used by countries to measure the size of their economies. GDP represents the total market value of all final goods and services produced within a nation’s border in a given period of time (usually a calendar year). For example, the United States, the world’s largest economy, has a GDP currently of USD 13 Trillion — nearly 20% of the world’s output.

The primary macroeconomic equation used to measure GDP is:

GDP = C (Consumption) + I (Investments) + G (Government Spending) + NX (Net Exports)

“Consumption” consists of aggregate consumer spending for all personal goods and services, including medical expenses, food, rent, education, and movie rentals for example. Consumer spending represents about 70% of the US GDP.

“Investments” are business investments in plant, machinery and equipment used to maintain and expand operations. These expenditures are required to replace older equipment and factories and increase capital stock. The US currently outputs about 17% of GDP as Investments.

The third component in the equation is “government spending”. This includes all federal, state and local government services required to write and enforce laws, maintain our safety, build highways and provide education to our children. Government spending currently represents about one-fifth of US GDP with a budget of nearly USD 3 Trillion.

Many of the goods and services that we consume are made in other countries (much of our oil for example). Likewise, we send our goods and services to other countries. The general theory being that we export much of our production to countries that can produce it more cost effectively, therefore freeing us to do more “higher-value” work given our (relatively) highly-educated workforce and capital intensive production processes. This is contrasted with a country like China, which is a labor intensive economy, and imports much of our heavy, capital-intensive resources, such as telecommunications infrastructure. The United States has maintained a trade deficit for many years, currently importing about USD765 Billion more than it exports. “Net exports” captures this negative amount in the GDP equation.

If GDP provides a solid estimate of what a nation produces aggregately, it can also help us get a clearer picture of a nation’s economic wealth. The ratio of GDP to total population is known as “per capita GDP” and is a useful indicator of how much an individual would receive if our output were divided evenly. US GDP has grown at an average of 3% since World War II, nearly 3 times our average population growth rate. However many poorer nations, such as Haiti, who’s GDP has actually fallen in recent years, are getting worse off as their population continues to grow.

Clearly American’s on average are getting wealthier. We produce nearly 20% of the world’s output with only 5% of the world’s population. Our per capita GDP of US$42,000 is nearly 5 times the world average. China, by contrast has nearly 20% of the world’s population and produces 14% of the World’s output. However, at 1.4 billion people it’s producing significantly less per-person at $6,600 GDP per capita. And the per-capita gap between the US and the world’s poorest nations (such as Haiti) continues to grow.

Figure 1 - GDP per Capita (2005) -->

The GDP equation can also be used to help us diagnose the underlying macroeconomic problems that may afflict a nation’s economy at any point in time. What a nation produces consists of both goods and services. Nations with fewer capital resources are unable to produce everything required to meet a standard of living. So they must specialize, trading something that they do well for capital to buy goods and services from other nations to improve the standard of living at home. However, if consumer spending domestically is low, then tax revenues will be reduced, impacting the government’s budget. As a result, critical government services such as schools, health-care and protection under the law will be harder to provide. Factor in population and the reality becomes even more troubling. Countries like India, with 1 Billion people can’t even produce enough food for everyone to eat.

The ability of a nation to grow and prosper is also limited by how well it uses its resources. If a country is unable to provide and enforce laws, there will be a high degree of corruption (such as America experienced in the early 1900s). Investors, entrepreneurs and innovators will have little incentive to create new products, improve production processes and take business risks. This is particularly debilitating in countries with smaller economies, poor in natural resources and without significant capital.

Education is critical to a nation’s ability to progress and leverage its human capital. The United States invests heavily in education and nearly 9 out of 10 youths attend high-school. This is not the case in poorer nations without solid educational systems. The United Nations estimates that 1.2 billion people globally are unable to read and write. If individuals are unable to read and learn basic skills and new methods for producing then their wages will remain low and production capacity will be stagnant; not to mention the physiological impact on the worker.

The United States, which continues to evolve into more of a services-based economy, leverages its heavy investment in people — with more routine tasks being completed through technology or with (relatively) low-paid labor in other countries. For example growth in the information technology sector has most recently provided incentives for US outsourcing of high-tech jobs to India, where education continues to improve for younger urban professionals, and the work doesn’t require the employee to be physically located in the US. Similar production sourcing from oversees happened in the steel industry in decades prior.

As mentioned earlier, GDP in the United States has grown on average about 3% since WWII. However, it has fluctuated heavily in various years along that growth trend. These peeks and dips represent the business cycle and changes in total output and have proven difficult to predict given their variance in frequency, length and intensity.

Employment in the United Sates has shown over time to be directly related the nation’s total output. In 1929 when the US was dealt the most intense blow to its market economy in history, people were out of work, unemployment was nearly 23% and production came to a halt. These economic downturns had classically been viewed as short-term downswings or setbacks and that the marketplace would quickly restore itself. However, during the depression this simply didn’t occur and people around the world began to question if Adam Smith’s “invisible hand” (as he described capitalistic market mechanisms in his landmark work “The Wealth of Nations”) could actually provide market stability.

During this time period a British Economist, John Maynard Keynes, proposed that the market-driven economy is inherently unstable. He suggested that government intervention is required to help “smooth” these peaks and valleys to protect jobs and a nation’s wealth as the economy expands and contracts. He is considered one of the fathers of modern macroeconomics and his contributions have had a major impact on governmental fiscal and monetary policy since the 1930s.

The US economy has continued growing with these periods of expansion and contractions (the latter called recessions) since 1944. When the economy is growing too slowly, we’re said to be experiencing a “growth recession”. When GDP is actually negative it is known as a full “recession”. During these slowdowns consumer spending is less, employment typically goes down, as do prices and production decreases. As Keynes proposed, the government can influence the market through policy levers — through tax policy, government spending, managing the supply of money and regulation. Other natural factors impact the business cycle — wars, natural disasters and terrorist attacks such as 9/11.

While economists continue to debate the most appropriate way to manage the fluctuations in GDP, it is clear that the general equation has stood the test of time. It continues to be a valuable tool to help us understand the deeper relationships present in our domestic and world economy.

Additional reading on the Macroeconomy:

Text - The Age of Turbulence: Adventures in a New World, Alan Greenspan - Purchase at Amazon

U.S. Department of Commerce - Bureau of Economic Analysis - http://www.bea.gov/

The Whitehouse Economic satistics - http://www.whitehouse.gov/fsbr/esbr.html

Federal Reserve Bank of Dallas - http://www.dallasfed.org/data/usdata.html

To learn more about Kennedy Technology Group, please visit us at http://www.kennedytechgroup.com/.

Give your old equipment a new home!

2009-01-12T16:10:00-08:00

I’ve noticed that around this time of year I’m often asked for advice on dealing with old computers and other office equipment. Given that new products are coming to market daily, figuring out what to do with older equipment is a pressing problem.

Why Donate Your Old PC and Computer Equipment?
There are three fundamental reasons why disposing of old computer equipment properly is important: environmental concerns, refurbishing costs, and the digital-divide.

According to Jim Lynch at Tech Soup:

"As more companies, organizations, and individuals find reasons to upgrade their computers, the problem of how to safely discard used equipment continues to amplify.

The ramifications of this phenomenon are widespread:

According to the U.S. Environmental Protection Agency (EPA) EPA.gov, only 15% to 20% percent of retired personal computers, TVs, cell phones and other electronic devices are being recycled in the United States (latest statistics are from 2007).
Every computer dumped into a landfill represents a missed opportunity to provide Information-Age tools to individuals and organizations across the digital divide.
Well-meaning companies that donate out-of-date computer systems directly to schools and nonprofits -- rather than through a recycler or a refurbisher -- can end up passing on more of a burden than a blessing."

When thinking about the appropriate channels for older computing equipment, KTG advises clients to:

Donate. See below for some great tips on donating used equipment and how a "refurbisher" and "recycler" can help.
Sell on Craigslist. Many students and lower-income individuals use this forum to gain access to second-hand equipment.
“Freecycle” your old equipment. Join your local branch of Freecycle.org, and you can post a message announcing that you have equipment to give away. Chances are somebody nearby will be willing to come pick it up from you!

Donated equipment gets a “fresh start”
CompuMentor, a provider of technology assistance to other nonprofits and the home of online nonprofit community TechSoup, has paired up with Microsoft Corporation and developed some truly innovative programs to help consumers properly donate aging equipment. CompuMentor 10 tips for donating a computer.

Thinking of selling on Craigslist?
If you’re thinking of selling your old equipment on Craigslist or other classifieds, we offer the following tips to help ensure a quick and painless transaction:

Provide detailed specifications and disclose anything that doesn’t work or is missing. Be sure to highlight any software included as this increases the value of your hardware.
Be clear that the equipment is sold “as-is” and that there are no warranties or support included (unless of course you wish to provide them.)
Be realistic about how much you can expect to receive for your equipment. Moore’s law suggests that computing resources double about every 18 – 24 months. So if you receive more than 30% of the original cost of a PC that you’ve used for 2-3 years, you're doing great!
For higher-value IT equipment (such as Cisco routers and switches) you may wish to consider a wholesale purchaser or an eBay agent to help you find the appropriate channel for the hardware.

Additional Resources:

Recyclers
Several commercial computer recyclers accept donations in various locations around the country and make sure equipment is disposed of properly. Find additional listings for commercial recyclers at:

TechSoup
ElectronicsRecycling.org
The National Recycling Coalition's listing of Electronics Recyclers
The National Safety Council's Electronic Equipment Recyclers Contact List
The Electronic Industries Alliance listings

Source – Microsoft Education

To learn more about Kennedy Technology Group, please visit us at http://www.kennedytechgroup.com/.

New US energy leadership

2009-01-12T12:48:50-08:00

On December 17, 2008, President-elect Obama nominated Nobel Prize winning scientist - Dr. Steven Chu to be the next Secretary of Energy. See here for video extracts from Dr. Chu’s presentation on climate change, renewable energy (e.g. solar and biofuels), and efficiency technology at the Natural Clean Energy Summit last summer.

Catch the latest news on Dr. Chu:

Google (RSS) - http://news.google.com/news?hl=en&ned=us&q=steven+chu&ie=UTF-8&nolr=1&output=rss

Yahoo! (RSS) - http://search.news.yahoo.com/usns/ynsearch/categories/47/index.html?p=steven+chu

Additional information:

InterAcademy Council - Lighting the Way: Toward a Sustainable Energy Future - http://www.interacademycouncil.net/?id=12198

Power Technologies Energy Data Book - http://www1.eere.energy.gov/maps_data/pdfs/eere_databook_091208.pdf

To learn more about Kennedy Technology Group, please visit us at www.kennedytechgroup.com.

Time is running out Gain bottom line tax savings for your business

2008-12-27T12:03:04-08:00

If you're still pondering whether to release that PO for new computing hardware here’s some news that may help. There may be remaining tax savings available in 2008 that can mean real cash in your bank account today, and savings forward.

The 2008 U.S. Economic Stimulus legislation signed into law earlier this year was not just for individual citizens. Also provided were accelerated depreciation provisions that greatly benefit small businesses. Example uses for your business include the purchasing (and immediately expensing of) new capital hardware and software. But the equipment must be put into use by 12/31/2008!

How does the stimulus package work?

1. Businesses can expense up to $250,000 in property and equipment purchased in the 2008 tax year (the 179 Deduction), yielding real tax savings:

Business results – tax savings effectively subsidize the purchase of new hardware and software to reap the benefits of virtualization and consolidation – including reduced operating costs and faster ROI.

2. Write-off capital acquisitions faster with two additional deductions:

Special depreciation allowance allowing businesses to write off 50% of what you paid for property acquired and placed into service in 2008.
In addition to the first 50% deduction, you can take a write-off on the normal first year depreciation for the remaining 50% of what you paid for the equipment in 2008. Given the depreciation rules, this results in 60% depreciation immediately.

Example investment:

Using $50,000 to invest in new server computing hardware, the financial impact would be $30,000 ($50k * 60%). In a 33% tax bracket that means $10,000 in cash savings immediately.

Then the benefits of virtualization kick-in which can be estimated at $3,500 per year in power savings, reduced IT management costs, and savings in office real-estate. And this doesn’t include value created through increased stability, uptime, and performance typical of virtualized IT environments.

Feel free to contact me at byron@kennedytechgroup.com for questions specific to your business situation.

To learn more about Kennedy Technology Group, please visit us at www.kennedytechgroup.com.

Sources and further reading on the 2008 Economic Stimulus Package:

U.S. Small Business administration - http://www.sba.gov/stimulus

Business Provisions of the Economic Stimulus Act of 2008 - http://www.irs.gov/newsroom/article/0,,id=183867,00.html

IRS To Issue Guidance on Special 50-Percent Depreciation Allowance -http://www.irs.gov/newsroom/article/0,,id=181364,00.html

2008 Economic Stimulus Act Provides Tax Benefits to Businesses -http://www.irs.gov/newsroom/article/0,,id=179227,00.html

Bandwidth alive and kicking

2008-11-03T21:15:19-08:00

Our customers often ask us for advice on Internet services for their primary, branch, and remote (home) offices. At a street price of about $390 per month T1s are simply beginning to come up short on meeting the bandwidth needs of real-time business applications featuring audio, video, and voice. DSL also proves hit or miss depending on your distance to the local exchange office. Even more disenchanting is the fact that most homes in Japan and South Korea have enjoyed speeds in excess of 20mbps for some time.

Seeking to expand into business services, Comcast has recently launched a new business class cable Internet service to meet the smaller organization’s “need for speed”. The service comes in a few grades ranging from 6 to 50 mbps on download and 1 to 5mbps for upload. (Note the 50 mbps service is only available in the Minneapolis - Twin Cities area currently). Additional features such as antivirus security, website hosting, and basic Exchange email and Sharepoint communications hosting are also included.

The price is nice as well. With the Preferred service coming in at around $109 per month, and with install fees included on a 24 month deal, giving the service a try is almost a no-brainer.

That said, stability and performance are the primary question marks. T1s have been around for many, many years, and once installed they’re pretty hassle-free. Although the initial Comcast installs we’ve been involved with have been rock solid it will be important to see the service perform over time. It will also be critical for the Comcast business team to continue to refine processes for customer service, network security, and capacity management. But again, $109 per month for 16mbps of download speed is tough to beat!

Happy surfing!

To learn more about Kennedy Technology Group, please visit us at http://www.kennedytechgroup.com/.