November 26th, 2008.

It’s a little too late to stick the head in the sand, plug your ears and sing la la la while people tell you about the tough economy. Whether you chose to participate or not, for many of you this years Christmas/Hanukkah cards you send as a company will likely be your last.

Now those are some ugly words to say out loud but if there is anything you’ve learned from me and this blog it should be that business decisions are made on logic, research, surveys, risk calculations and business plan delivery / management.

If it prompted an emotional response - sorrow, anger, misery, frustration, a fatwa written in your blood - the paragraph above likely doesn’t apply to you so you should stop reading right…. here.

For years I’ve used this blog to publish what I thought was the right thing to do, the mistakes I see people make, the mistakes I’ve made, the relationship management with the partners, customers, resellers, vendors and the general business of technology.

I think it’s time to look at the endgame of sorts.

In the past month I have been invited to half a dozen conference calls and peer groups and user groups to discuss how to operate a business in a tough economy - most of which I’ve had to pass on because you operate the business in the tough economy in much the same way you operate it in a great economy - you diversify, you spot opportunity, you form the right partnerships, you grow conservatively and seek out profit over hype. Some people consider this blog too tough (on me, on OWN, on partners, on vendors) so saying the same thing I’ve been saying for years at this point is just an equivalent of beating a dead horse. (no pun intended)

But what about those of us that aren’t screwed? We can learn a lot from the complacent Grasshopper IT companies that were able to ignore the fundamentals of business just because the demand for their services outpaced the supply.

So join me in the next few days, through the Vladville Newsletter, as I break down the lessons learned from the downturn and how that has made those of us that are still growing far more powerful. Newsletter is free, open to everyone, is not meant to sell you anything - but there is a catch, you have to participate.

Happy Thanksgiving, thank you for reading Vladville.

Another magazine bites the dust, sadly one that I enjoyed quite a bit and have an active subscription to. Companies are pulling back, some are scaling down, some are outright changing their business models.

Yes, the economy sucks. Some of the largest and most respected companies will not see 2009. There is a good statistical probability that you won’t have a job in 2009.

However, this is a natural progression of business and life. Out with the old, in with the new. If you can’t make money doing what you used to, you find something new to make money at.

Look at it this way: Most of us were lucky to have been able to learn how to run a business at a benefit of our technical skills that kept the demand pent up - and we took that advantage to grow and scale and do more - and that is why so many are now thriving while the rest of the population is struggling at best or outright dying at worst. If you have the time to sit around and think “I wish someone could help me figure out how to run my business during the downturn” then it’s probably too late already.

That’s business folks, survival of the fittest. You can’t get angry at the market demand, all you can do is be savvy enough (and opportunistic enough) to seize the opportunity and make something out of it.

Thanks to the elections in Unites States a fair amount of public discussion has taken place over just who should be the leader. The smartest? The most competent? The most experienced? The toughest? Or someone that reflects the average man - Joe Six Pack that you can have a beer with and debate whether Africa is a continent or a country?

Who cares, isn’t the election over?

It’s a little bit bigger than that. Election cycle gives you an incredible insight into what drives people, what motivates them, what they fear the most and what they believe to be the solution to their problem.

As IT solution providers our job is generally to identify the problems and propose solutions. Some of us are wildly successful at identifying the true problems clients face. Some of us just suck at getting that information from our clients. Just asking people what they don’t like about their technology is not enough. Feeding data into a junk “Solution Creator” is an OK sales tool but it doesn’t get to the bottom of the true issues our client base faces.

One of the biggest drivers behind the development of the new wave of products at OWN has been a little “Development” tab where we keep track of what our current customers demands are. This is great when it comes to finding the specific nuances in functionality from client to client, from industry to industry. But refining a solution to fit the client is easy… how do you market yourself to the kind of people that would fit your solution portfolio?

That is why most IT solution providers fail at marketing and making it big.

I’m going to let you in on a little secret. The reason your clients aren’t telling you exactly what they want from you is because they likely do not consider you to be their peers and would likely not understand them. So you talk to your clients in the best business language you can muster and they respond in the most technical lingo they have picked out of their trade journals.

One thing I realized last year is that as my business grew and I grew in my IT business and then grew in my business outside of the scope of running a “technology” business I lost that familiarity that has made me so successful working with small IT shops. It has been a few years since I had left a really small IT biz way of thinking and I realized that I was no longer the loudest proponent that understood the challenges of the really small IT solution providers.

Sometimes you just have to hire the right people that speak to the right kind of the market. So I set out to find a person that was most like the majority of IT startup guys. I’m not going to open up about all the secrets but suffice to say, people open themselves up to the people that they identify as their peers - technically, business-wise.

You have to play your strengths to be the right fit for your clients needs. Otherwise you are doomed to the professional life of taking orders, being second guessed, not in the budget, a decision to be made later.

Now that is a little doomy and gloomy, so let’s talk about something positive. Where I think most people fail at and get frustrated into remaining small is the failure of their first hire. Most people think to hire the exact same kind of a person they are. Techie. Competent. Someone that can help them scale themselves by offering the same kind of a service, same kind of a technical expertise and same kind of a go-getter personality type they have.

It puzzles me is that nobody ever asks themselves as entrepreneurs why they don’t work for someone else? Why would you hire someone completely unmanageable?

There are so many pieces of advice and books written on who you should hire, who you should hire first, how you should hire and on what terms. So I will offer you the single most important piece of advice and key to success:

Do not hire on the grounds of what would make you better off, what would make your life easier and who would fit you better. Think about your customers instead. Which of your hiring prospects would work the best with your client base - who are they most likely to respect and like as a point of interaction and representation of your corporate image and your corporate values?

Style points matter. You betcha.

This blog is somewhat famous for beating up single points of failure and dragging them through the dirt. The fact that anyone would succumb to such a restriction shows either ridiculously poor judgement or the details are buried deep within the 16 pages of legalese nonsense that only lawyers can engage in massively bleeding the company without legal representation of any bank balances.

So what happens when your carrier is an SPF?

Would you be surprised that most of the large networks happen to be SPFs? (the whole SPFism, from the megalomaniac carriers to IT consultants, is a condition borne out of extreme arrogance - “we have the best network, we know it all and we refuse to hire anyone else to transit our data - the whole world should change to adapt to us” which is about as remote from the purpose of the Internet as possible)

How do they get away with it?

Somewhere in the book of terms and conditions of the agreement you sign with a major telecom organization there is text that basically reads:

“Due to the technical limitations and intermittent outages of certain routes ____ does not guarantee transit to all remote networks.”

This happens to be a very valid argument on surface. Suppose there was a web server somewhere in Malaysia and the boat that it’s on just sunk 2 feet and the switch that was at the bottom of it flooded. Of course we can’t guarantee that.

But when Sprint, an SPF network, decides to drop their peering with Cogent, the worlds largest carrier of Internet’s primary value (pr0n, baby) many people start a bond fire.

Sprint, you should be ashamed.

If you are reading this blog and happen to have a T1 from Sprint you need to drop out of that contract immediately and move to a multihomed carrier. This tactic of bullying your competitors is not just unfair it is a sign of financial instability.

Disclosure: My employer is a large customer of both carriers, however, we do not use either network in an SPF configuration, all are multihomed.

How is it that certain catchphrases resonate so well with truly ignorant and clueless people? How is it that the stupidity is so powerful that it actually moves them to vote against their best interests? In Florida we now have “Joe the Plumber” commercials, where series of people try to show profound ignorance and lack of understanding of how the tax system works, the punchline being:

“I’m supposed to work harder just to pay more taxes?“

Yes, you dumb sack of shit, and that’s not called socialism, that is called capitalism.

The harder you work the more money you make and the more taxes you pay.

This is not a really new concept either, it’s been around since 1862, and started as a way to pay for the Civil War. Ever since then we’ve had a tax system (which actually started as a progressive tax system to begin with, charging 3% on the low end and 5% if you made more than 10K a year) under which you pay more taxes the more money you make.

This is the very foundation of capitalism — that greed is good part of Gordon Gecko’s speech. The harder you work the more money you make the more money you contribute to your community and your country and the more of it goes to eliminate poverty, educate the population, feed the hungry, build the roads, build schools, elevate the income and prosperity which feeds back to the prosperity of the entire country and with more expendable income go to exponentially benefit the richest and the hardest working among us.

Somehow this foundation of the federal government in a capitalist society seems to have gotten the “socialist” label over the past year or so. Spreading the wealth is such a mythical concept to the very same people that drive around on the public roads, send kids to public schools, collect social security, veterans benefits, apply for small business loans and try to build a business on top of the very same beneficiaries of all of the above.

I have a plea for Joe the Plumber and The Angry Villager Band - please quit your jobs and go work for McDonalds. You will make less than $15,000 a year, qualify for some government assistance and be able to pay less than 10% tax. Hard work is overrated, the harder you work the more money you make (which for this part of the argument should be ignored) and the socialists are going to take more and more of your money. If you make more than $23,100 they will try to take 15% of your money, over $43,550 they will try to take 25% of your money and if you work even harder they will take away 28%, or even 33% or oh my god, even 35%. And it gets even worse. If you get really rich and build houses and stock portfolios and cars and get wealthy the socialists will take even more money even after you die in terms of estate taxes. What is the incentive to work (aside from building wealth and raising your standard of living) if all it does is pay more taxes??????So to make sure you don’t pay more in taxes you should go work at McDonalds and aim to die as broke as you possibly can.

And please stop bitching about getting a tax refund. Greed is good. When there is prosperity ambitious people spot the opportunity and they build businesses around it that benefit more people and improve everyone that business touches - higher wages, higher tax brackets - higher standard of living. On the flip side, when the government is forced to cut programs that a lot of families rely on it causes those families to have parents cut hours or even quit working which decreases discretionary spending which decreases the consumerist nature which leads to more layoffs and more unemployed people which in turn leads to less tax revenues and an effective freeze in American prosperity that most of us have enjoyed for quite some time.

Patriotism goes beyond a bumper sticker. If you are Joe the Plumber and get the privilege of casting a vote this November 4th ask yourself if you are really voting for your and your family’s best interests.

Welcome to the wonderful world of business competition:

Dear Vladimir,

If you are concerned by published reports about DHL’s reduced capabilities, choose FedEx for all of your shipments, especially during the holidays.

Big s**t poppin and lil s**t stoppin…

Now I know some look at these developments and look for cover.. this is my third major global financial crisis and every time it comes around the mainstream media coverage is equivalent to the Jesus freaks quoting nonsense from the Book of Revelation, Nostradamus guys break out the quatrains and the hobo in front of Chris’s office change their cardboard signs.

In each instance the largest and the best clobber up their competitors, squeeze them and their accounts out and emerge on top.

So panic, compromise your values and offerings, batten down the hatches, cut spending and staff, hide from the storm and pray for the best. World needs pigs too and it’s slaughtering time.

Are you holding a knife or your own a**?

(Yes, it was an exceptionally motivational Monday morning squawk box call @ OWN. As of 24th we’ve crushed all previous revenue/growth numbers and are putting another month up on the wall.)

…. of traditional computing as we know it: http://blogs.zdnet.com/microsoft/?p=1671

In case you are curious about why this is such a game changer consider a note from one of my younger developers (age 23) that sent me this note from PDC:

“Its crazy there are a lot of people my age or younger here… There are even a few instances of ______ here lol”

These aren’t unemployed hobbyists trolling for a clue, these folks all had their employees part with at least $5K a pop to send their developers out to Los Angeles for a week.

People that write the software you use (or are in business of reselling and supporting) are betting that the above is the future. Trying to determine where that puts your business is the question you probably want to start figuring out an answer to right now, or perhaps when Karl Palachuk and I first told you this was where the industry was heading nearly two years ago.

Last week marked the launch of AWS upgrades across the board and the stable release of Amazon Web Services scalable cloud offerings powered by Linux and Windows.

Yesterday I met with Hank to go over the schedule for PDC going on in LA next week. Guess what at least 80% of the content is? Live services, cloud services, cloud-enabling and integrating peer services, Windows 7 integration with the cloud. Roughly 20% of it concerned actual desktop-server use, with the grand total of 1 session on Exchange development.

Things are changing out there…. The decision to be or not to be a mere Geek Squad employee five years from now is being made right now.

I think all the negative ads on TV are really turning me into a ruthless bastard. On my way to work this morning and I’m chatting with a fellow partner from Australia. His monkeys blew up clients migration and overwrote the Exchange 2000 database. Last backup was 24 hours ago, no replay logs. What to do, what to do.

Now, I can’t do magic… but I can do slimy vendor whore:

Vlad Mazek says:

and just say that the current backup technology that is in play only does daily snapshots so in the worst case scenario you will lose 1 day. It was a worst case scenario, you lost a day, you’re back in business. Now if this is significant we need to reevaluate our backup services and (sell you a huge) CDP solution

Remember kids, aaaaaalways be pimping.

You know why? Because NOBODY EVER thinks they will ever have an issue and they think they will totally deal with occasional outages and problems with rational sense that technology can sometimes fail and that there are other forms of communication,  after all it’s not life and death and it’s worth a risk of saving a few bucks.

Which is all nice and well until their Crackberry dies at 2:30 AM while they are arranging a booty call or trying to look up the password to their pr0n site (true story) and the world will end if they don’t have 99.999% uptime. That’s when I put my pimp hat on and tack another 0 at the end of the quote because if you can’t tollerate 99.9% uptime (basically one business day outage) a month you do not belong on a single point of failure solution. End of conversation.

You see, when people are pricing a solution they are buying the low percentage likelyhood that something will go wrong. When something goes wrong, they try to overestimate the cost of the outage.

My job is to help you meet me in the middle.

And I’ve been doing this a lot longer than you, with a lot more servers and experience that you can even imagine, believe me - it’s only a choice of when you will be paying and how much, not IF it will ever happen.

ABP.

I’ll admit that I’m not a fan of Steve Jobs or the Apple fanboy cult, but as I get busier I am really starting to appreciate the level of certainty both Jobs (and Gates) pack into a oneliner. The kind that you just have no counter-argument to mount against, love it or leave it, the discussion ends here. One of these came yesterday during the earnings call and here is what a Wall Street Jr blogger noted about it:

But the most fun on the conference call came when he parried analysts’ questions about new product areas that Apple might or might not enter. A recurring question among Apple watchers for decades has been, “When is Apple going to introduce a low-cost computer?

Mr. Jobs answered that decades-old complaint by stating, “We don’t know how to build a sub-$500 computer that is not a piece of junk.” He argued instead that the company’s mission was to add more value for customers at current price points.

Powerful words.

Now, let’s for a second ignore that the Mac Mini uses the same chipset, same video, same speed RAM and most of the peripheral components found in your average MSI Wind that sells on retail for half of Apple’s Core 2 Duo’s…

Think about all the other ways he could have said that?

• We have seen no interest in a junk computer
• Those computers are pure junk
• We are not a company that builds junk commodity computers
• We don’t want to compete in that junk market

Point is, in the answer of why they are not doing something Jobs didn’t blame any external party. Not the customers. Not the suppliers. Not the market. Not the demand. Not the interest. Just the only thing he controls, and it’s hard to argue with someone that takes the entire roadblock onto themselves….

He just said that they don’t know how to build a cheap junk computer that many more people can afford. Quite a departure from what started the Apple company, don’t you think?