The strategy they are describing (selling covered calls) is actually less risky than holding the underlying. They make more than just holding the underlying when it drops or stays flat, and in exchange they make less when the underlying goes up a lot.
Options are just a tool that lets you dial in the amount of risk you want, they can be set up to be more conservative or more risky than the underlying. The latter is what makes the news.
> The strategy they are describing (selling covered calls) is actually less risky than holding the underlying.
Not necessarily. If you assume the idea is to make money, say a stock is at$100 a you sell a $110 call for $2
The stock then goes to $200.
You have lost $90 of gains to make $2.
That's a huge loss.
Selling covered calls decreases your downside slightly but earning the option premium but it completely destroys your upside by taking away any of the upside beyond the call's strike.
that's much riskier than just owning the stock outright as your downside is capped but yoru upside is unlimited.
At least get the numbers right. This would be losing $90 to make $12.
Using Abbot Labs as an example, a $2 option for 10% over current price would expire roughly 4 months out. So you could make $6/year, and only risk losing the gains over 10% that occur within each 4 months.
The types of stock I'll do with this are generally those I view as reliable, possibly with a dividend (yes, increasingly rare these days), with little exposure to catastrophic downside. This chunk of my portfolio is about minimizing the catastrophic as dollars 1-100,000 have a lot more utility in retirement than dollars 1,000,000 -> 1,100,000.
The problem with this line of thinking is assumption that the OP would hold the stock until it reaches $200. But he wouldn't. He was ready to sell at $110. He is better off selling covered call + shares @$110, then only selling shares @$110. Another problem is the assumption that everybody can sell on the top (in this case, $200), while it's obvious they can't. And since when is profit of $10 per share == a huge loss?
If you think the stock will go up from $100 to $200, don't sell covered call. Nobody forces you to. But if you have sold it, it means you didn't believe stock would go that much up.
If one sells a covered call but is not ready to sell the stock at that price, that's one's problem, not "covered call is a bad strategy" problem.
Isn't the downside to selling covered calls that, not only do you need to hold the underlying, you can get the option you sold exercised, aka you lose your 100 shares per contract?
Yes, so the upside is capped but you get to set the cap based on what call you sell. The bet you're making is that the stock won't appreciate enough for the other party to exercise the call option (so you earn the option premium + underlying appreciation). If the option is exercised you lose some of the gains you would otherwise have made, but you still captured some of the appreciation.
But there is no increase in downside in the financial sense (if the stock price declines you keep the premium).
Just for a second, imagine a company that isn't a software company, but needs software to run its business. Think manufacturing, logistics, shipping, construction, food (industrial scale egg production, for example) etc. There's a lot of companies like that out there...in fact it's almost all of them.
Those companies run all their boring, essential software (accounting, ERPs, etc.) on VMWare, Oracle, Azure, etc. Since software isn't their core business, they pay an external company to keep their software running. Like it or not, cloud providers are for software companies, and most companies have no interest in becoming a software company. They might have some small groups that do analytics or software in-house, and those groups might use cloud providers, but all the essential software will be run by a company you can call when something breaks, or if you're big enough embeds some staff in your office.
It's just good sense to outsource non-core functions. Software companies outsource hosting and datacenter stuff to AWS, etc. Why should enterprises deal with Linux directly?
but thats just it, this argument only ever works if you dont care about performance or features and believe the marketing. You make eggs, and your target fixation only allows you to see eggs, so these companies hold some mysterious value to you.
KVM performance is orders of magnitude better than VMWare and handles migrations snapshots imports and exports without additional byzantine license agreements or mandatory minimums for hardware support on network switches and servers. Cockpit makes it dead simple to run.
Oracle performance is so awful the license terms do not allow you to release performance benchmarks or comparative analysis against other databases. it also has all the same heavy lifting you need to focus on for things like galera clusters or postgres, so theres no clear win unless you like paying Larry for the privilege of slow transactionals on a hyperconverged iron beast, or youre too lazy to figure out ODBC.
And Symantec so openly hates their customers they now bundle a cryptominer with their software. before that their incompetence was so blinding Google had to step in and force them to give up their CA business.
"enterprise" software is an absurd proposition for anyone smart enough to realize their business is more than just the end product. to everyone else, these companies are borderline predatory.
> KVM performance is orders of magnitude better than VMWare
Do you have any sources for this? I worked at a company developing NFV appliances, we always had much higher network throughput on VMware than we did using KVM without using some type of convoluted vswitch alternative or PCI passthrough.
VMware isn't just a hypervisor, it's an entire ecosystem of VM management and orchestration. You can tie it into AD, delegate different permissions and roles to users/groups, manage upgrades, interact with PowerShell and other APIs, it has integration into Dell and Cisco solutions, all sorts of additional features you won't find running CentOS and KVM without adding more 3rd party software on top and cobbling it together.
> VMware isn't just a hypervisor, it's an entire ecosystem of VM management and orchestration. You can tie it into AD, delegate different permissions and roles to users/groups, manage upgrades, interact with PowerShell and other APIs, it has integration into Dell and Cisco solutions, all sorts of additional features you won't find running CentOS and KVM without adding more 3rd party software on top and cobbling it together.
This is it, really. For big companies this kind of stuff is important.
And "cobbling it together" is very much understating the effort involved to keep it running: eventually you'll upgrade one of the components and it will break something, because you didn't read the release notes of an upstream dependency that mentioned a breaking change that affects your particular setup.
Having the vendor (vmware) provide this as a delivered, tested, supported solution is so much easier.
Similarly, I suspect it would be significantly simpler to find IT firms and/or hire individuals with VMware knowledge than it would be to find the equivalent on KVM + Cockpit + the dozen other components you need.
Note: I'm not saying this is right or the way things should be, but simply pointing out the "enterprise" perspective. Boring technology is safe.
colour me unimpressed. VMWare cheerleaders haul out openstack as their touchstone example of how hard VM's are in linux but forget that VMWare pales in comparison to what Openstack is, which is an entire full-stack cloud hosting provider with accounting, DNS, tenant metering and network delegation, and support for k8s.
Start comparing VMWare against Proxmox, which is an out of the box solution anyone can use and includes every single feature of ESX and many vsphere features youd easily lose your shirt for. https://www.proxmox.com/en/
heres an independent performance test. KVM is easily faster than ESX.
You've missed the point a bit, and for the record I prefer to deploy Proxmox/KVM over VMware most of the time, I'm not a VMware cheerleader.
There are plenty of features Proxmox doesn't have that VMware does have. I've ran into a few of them
1. No ability to pin vCPUs to physical CPUs from within Proxmox. You have to drop to bash and set affinity for each vCPU's PID by hand if you want that.
2. You can't provision a VM with more vCPUs than physical CPUs. For example if I have a host with 8 cores, the max vCPU I can allocate to a VM is 8. And yes, I did have a use case for this.
3. You can't configure networked serial ports from within Proxmox. You have to drop to bash and edit the vm configuration file by hand if you want that.
4. Lack of serial port concentrator, which means you can't really use networked serial ports reliably when migrating VMs across hosts in a Proxmox cluster. In the NFV world this can be pretty important.
5. You can't manage multiple Proxmox VM hosts from a single UI unless they're clustered, which in many cases isn't practical to do. vSphere will let you manage multiple independent hosts from a single pane of glass.
6. (at least historically) lack of RSS/multiqueue in virtio networking. vmxnet3 on VMware supports this and allows you to scale better. But I will admit it's been several years since I've had a look at this area.
Again I'm not a VMware cheerleader. I'm sure I could generate a list like this for what Proxmox has that VMware lacks. But it's incorrect to state that it includes every single feature of ESX.
I've deployed the full VMware Integrated OpenStack running on ESXi, NSXT, and network attached storage; everyone was happy. Users happily deploying full stacks via API in their own Tenant with tools like Terraform. Operators thrilled to be able to patch and reboot a host without even a notification email because VMware Live Migration. The bosses without a worry because in the end it's just running on VMware.
You don’t grok “the enterprise”. Any CTO of a large company would feel much better about having VMWare behind them and their ecosystem than your proposed solution.
“No one ever got fired for buying IBM” applies equally to big enterprise SaaS providers and companies like Oracle, Microsoft, VMWare, Salesforce, etc.
I learned this lesson in an interview once. I was bullish on sap pricing and the cost of consultants. The person from top management, multi-billion chemical, said “you think we have no money”? They did, 2 years later they’ve opened a brand new building to fit a 1000 of those consultants.
Proxmox provides enterprise support staffed mostly by devs and engineers, and not some crappy outsourced service asking you the three questions from their predefined support handling sheet.
It is also deployed in many many enterprise and government settings.
Again, you’re arguing about technology which is besides the point. A CTO in the enterprise is going to make the safe choice.
Also, notice when you go to
VMWare’s home page you see “referenceable clients” - ie well known companies that use the software? This is “Enterprise Marketing 101”.
Besides, I can throw a stick and find someone who knows VMWare. As a (hypothetical) CTO of a non tech company, I don’t want “support”, I might want an MSP to do it for me.
This is my first reply to you, so how can I argue against your point again? Also it seems I can count myself lucky to work under a chief technology officer that actually thinks about technology and also understands actual benefits, not the ones just looking at the gardner quadrant of "who paid the most for pr". Besides that:
How vmware is a safe choice is beyond me, their proprietary so one is mostly locked in and at their bidding, their standard support reply is to install from scratch as otherwise the won't look at the setup. If you don't look at the technology POV (in addition to others) the choices probably won't be the best.
Notice how on Proxmox.com there's a testimonial page that links to enterprise and gov't customers, how's that different "Enterprise Marketing"?
So we got enterprise support, world wide enterprise reseller network, enterprise features available for all, with or without support, not sure how much more enterprise vibes one can get..
vmware isn't really moving forwards since a while, the acquisition by broadcom won't help that either IMO, but sure they're currently still able to pay "bribe" some CTOs or sales people lunch, so they got that edge going for them, won't be enough to stay the #1 in the long run though.
No matter what it is a pain to migrate. Corps aren’t being bribed. They are making the safe choice.
For instance even if some unknown cloud provider is “better”, if something goes wrong, the CTO is going to be questioned. If Azure goes down and it’s already an MS shop, people aren’t going to question whether it was a bad decision.
I agree with you - and you are still missing the point. The enterprises are buying a service. They don't care that it is running on AHWRGGG instead of TLMWBBB (which is soooo much better). What they care about is that it runs, and when it doesn't, that someone fixes it. This is it. Could you run everything on PostgreSQL instead of Oracle? Yes, take a look at EnterpriseDB. I guess Oracle just sells better? (guessing here, no idea)
The money is of course important, but these providers are smart. They take only what they can and not more. Which is still big money. And while Oracle & co. would never make it into any company I can make a decision for, I don't think that keeps them awake at night - there are enough (big!) fish in the ocean.
Where you get screwed is when some legacy system of record application requires Oracle. So you think, I'll cheat and use Postgresql with an Oracle dialect. Then you find out the application uses tens of thousands of lines of PL/SQL including some of the most obscure features. Now you're looking at millions of dollars to get off the database software you don't like. Oracle, IBM, etc can buy time like this but eventually all the proponents of their software will be retired and the halls of IT will be filled with an army of "never again."
We meet on Wednesdays; the coffee and cookies are free.
You could run everything on Xen instead of VMware, except as you point out - you can't really. Oracle is similarly positioned. Their database software is just one piece of a much larger ecosystem of products. An "enterprise solution", if you will. Oracle actually competes with VMware in the broader enterprise space.
Bingo! If you are a manufacturing company, you care about two things:
1) does this software do the job I need?
2) does this software cost less than the value I get out of using it?
If the answer is "yes and yes" then -- congratulations! you made a sale!
Sure, if some other company comes in and says "hey, I can do the same job, but cheaper," the customer would listen. But so long as the software works good enough, then the externalities of support contracts, billing, "enterprisey-stuff" may matter more than features or performance.
>if you dont care about performance or features and believe the marketing
I don't except to the degree that the product is more or less suitable for my business needs. And note I said product, which KVM by itself is not. If I'm going to use KVM--and, yes, I likely would rather than VMware unless I otherwise needed VMware for some reason--I'd be buying it as part of a supported commercial Linux distribution.
Would you suggest that all companies write their own office suites? Manage their own SSO solutions? Manage their own mail servers? Manage their own expense system (Concur)? Manage their own payroll (ADP)? Every small company manage their own benefits (Insperity)? Do whatever Workday does?
The health care organizations overwhelmingly use third party EHR/EMR systems and schools use third party companies for enrollment (Blackboard).
It doesn’t make sense to bring any those in house.
No, it only ever works if you care about your core competencies more than performance or features of the software products you run your business on.
Remember, not only are most non-software companies better at their business than they are at software, they're also not hiring from the same tech talent pool, they're not paying their tech people as much, they're not letting the tech run their business.
I've got several clients that pay over 500k/year to a SaaS ERP vendor. The ERP system is the very definition of enterprise software.
What would you suggest I advise my clients when it comes to their finance, inventory, order management, logistics etc?
I guess they could piece together various SaaS solutions to create some sort of composable microservice based system to meet their needs but that's a massive engineering overhead when they can just get all of the functionality they need on one big fat enterprise ERP system.
The cosmetics manufacturer I work with does not care about what the technologists (people like you and me) care about. They just want to run their manufacturing and wholesale operation and if Oracle are offering one system that does it all, why wouldn't they take that deal?
I do ERP and the thought of replicating it in Excel… yikes. For a big company you’ll need a team of hundreds and a huge surplus of sanity, and you’ll still have a worse outcome.
An ERP is basically a database with an interface with business logic built in. Certainly not something you want to do in Excel.
> Why should enterprises deal with Linux directly?
Not just Linux but IT in general. It may have to be about security; my impression is that at least some of the widespread successful attacks in recent years might have been prevented if non IT companies had their own IT department, servers and in house security teams. Relying on an external provider is cheap and comfortable, until the day a single vulnerability screws all its customers data in a single day.
I think you vastly underestimate the cost of on-prem IT, especially for small and medium sized businesses. The "floor" cost of your own IT is many, many orders of magnitude higher than a subscription to something like Office 365 for something like 50 people.
"Normal" people don't use cloud services because they're lazy, they do it because the economics of rolling your own IT does not make sense, and hasn't since the days when it stopped being your only option.
Having your own It department doesn't mean you'll be fine for security. Plenty of health systems have their own IT department and have been hit.
But, even thinking of health care systems is thinking of big businesses. How does a road construction company justify an IT department or security team? Think of businesses like that. They have have an IT guy who manages services they use and is an expert at using those.
Most businesses are small to medium in size and non-tech.
In this case, they have no need for VMWare or Oracle.
Actually, the parent comment is on to something. "Brand name" enterprise software is a buoy that certain types of careerists handcuff themselves to, which allows them to float through their careers fairly unchallenged.
At one point in time, IBM had this market position. Then Microsoft, Oracle, and now Amazon and Google.
> Actually, the parent comment is on to something. "Brand name" enterprise software is a buoy that certain types of careerists handcuff themselves to
Or maybe, just maybe, really big corporations that make software solutions are often really big because their solutions are, if not feature-wise the absolute best, by far the most stable and reliable?
If one were to buy your argument, that would be like saying that businesses buying the Google Apps suite is nonsensical, because the only reason you'd ever use Google is because you're a "careerist" that "only know" Google.
That's obviously not true, Gmail and the rest of the Google suite have been market-leading for many years, because they are good solutions that solve real problems. Presumably the same thing goes for the Microsoft Office suite, and so on.
People are now starting careers as Office 365 "officers". From now until retirement, they will champion Office 365 and its successors in all situations, because in effect they will be championing their own CVs.
Just like people did with IBM, Oracle, J2EE, and so on.
If at one point Google Apps is superior to Office 365 makes no difference.
The insight is that the careerists are the effective insider salesmen of enterprise software. Not specs, benchmarks, stats or anything like that.
Why can’t multiple things be true at the same time?
The idea of product “officers” can be bizarre and counter productive, while that product simultaneously can be one of the best in the market.
I’m not saying that O365 is great, I use it at work and I hate it, but enterprise software has always been like this: it’s not enough to be better, you need to be something like 3x better, but if you are it doesn’t matter if you’re going up against Microsoft. Software is a lot more competitive in that way than a lot of other industries.
It doesn’t matter if Google Apps itself is superior. Google is not exactly known for its enterprise support. You also can’t count on the long term focus of Google. You know when you buy into the MS ecosystem you are going to get great enterprise support, they don’t have the attention span of a crack addled flea like Google does, it’s going to integrate well with the rest of their products, you get deep discounts from bundling.
Gmail is a market leader only because it is good enough (and at the start it was even better than competition) and because it was free - and still is for some cases. Can't comment on Google Apps, never used them.
Otherwise, I'm not sure I would put Google in the mix with Oracle / MS and others. They are firmly non-enterprise, in that it is notoriously difficult to get any support from them, even if you are paying (there are exceptions, yadda yadda...). With Oracle, their products may suck (and they do), but the company knows to answer the phone for their customers, otherwise they won't be able to sell that beefy contract in a few months' time.
> Or maybe, just maybe, really big corporations that make software solutions are often really big because their solutions are, if not feature-wise the absolute best, by far the most stable and reliable?
So you acknowledge you don't really have knowledge of the core enterprise suite Google sells to enterprises, but at the same time you're certain they're non-enterprise?
Google Workspace (the new-ish name for Google Apps) is absolutely enterprise. They definitely have enterprise support contracts, and the few times I've had issues while having a support contract they have been easy to work with.
> Google Workspace (the new-ish name for Google Apps.
You hit the nail on the head why enterprises stay away from Google. They are going to lose focus on it as soon as no one internally can justify maintaining it to enhance their careers and show “scope” and “impact”.
They've been selling Google Workspace for 16 years. Its one of the biggest MDM platforms out there. ~~There are over 2 billion users of this paid enterprise suite.~~ Guess I was wrong on that figure, >2 billion users with >6 million paid subscriptions.
There's still supposedly over 2 billion users of these services. Its not a small project with a niche client set where absolutely nobody pays. Reader was popular, but not 2 billion users popular. How many people do you think really used Allo? Its really not in the same space as the many products they've killed.
It matters because Microsoft uses its much larger paying installed based to support a slew of first party and third party companies to provide “enterprise support”. They have hundreds of people in sales that report back to MS what large enterprises want.
People on HN don’t grok “the enterprise”.
I mentioned in another post, that even though I work for $BigTech, I work in the cloud enterprise consulting space (not Azure). Dealing with the enterprise is a completely different beast than dealing with other tech companies. Microsoft has almost four decades of experience in the space.
Even on the personal side, I would much rather deal with MS for my one lonely 5 person Office365 subscription than Google support.
I don’t have direct experience with administrating Oracle, but my impression is that they make a lot of money from the moats they’ve built: but they would never have been able to build them if the product was garbage to begin with. Sure, nobody would probably pick Oracle today for a new project almost regardless of size, but surely there must have been a point in time when Oracle was simply superior when it came to stability and functionality? If not, their current size really makes no sense, because you can’t build a business on scamming people in the long run.
5 - 10 years back, Oracle was very far ahead of the database game and there was no practical competitor regarding performance, query optimization, storage management and enterprisey management features. For quite some time, if you needed a large central relational store for a business, Oracle was the only answer.
The main change is that MariaDB and PostgreSQL have caught up a lot of ground over the last years, so OracleDB has been losing the edge they have been paid for.
> because you can’t build a business on scamming people in the long run.
When switching is effectively impossible, this is what happens.
Oracle has been buying various application companies with installed bases that are difficult to migrate away from. They are essentially buying customers to milk after putting in their enclosed pasture.
Switching isn't impossible, there are plenty of companies that help you get off Oracle. It's just that it's risky and time consuming, requires specialized knowledge, and companies would rather pay up than deal with all of those things. But this goes for almost any complex product on the planet. Switching costs are high,
Nontech companies are only using spreadsheets, forms, and storage. But they spend their technical manpower on implementing business logic in closed source locked-in expensive software. I don't think its much more work just to implement the business logic in excel/google sheets and serverless functions, and end up with something much much cheaper and much more portable.
> Why should enterprises deal with Linux directly?
Um... perhaps because it is less costly and will lead to better capabilities, more reliability, less complexity than burying it under 18 layers of apis, containers, and virtual machines.
If you think there is efficiency gains in terms of cost savings. Why don't you do a startup to try to go after the enterprise software market? We spend millions on ERP, PLM, SCM,WMS, etc. We would gladly move to cheaper solutions that offered the same feature sets. I don't have choice about VMWare because a bunch of software requires on-prem hosting due to latency(need sub 10ms for sensors) and the software is built on top of windows.
> … perhaps because it is less costly and will lead to better capabilities, more reliability, less complexity than burying it under 18 layers of apis, containers, and virtual machines.
Over the years, I’ve come to suspect that maybe the technology is less of a differentiator in the overall effectiveness of a company’s IT environment than the people running it.
And with IT staffing supply having lagged behind demand (as also evidenced by relatively high salaries in IT vs many other professions), you could easily argue that it was (still is?) historically more difficult to hire good IT people than in many other professions.
And arguably that’s making outsourcing of IT needs relatively more attractive than outsourcing of other business functions where reasonably competent leadership and staffing is easier to come by.
And arguably, capturing many of the benefits of Open Source require more IT competency than using off the shelf mainstream commercial software. If I’m using the same crap that everyone of my competitors is using, none of us win or lose on that. But when using Open Source, I’m more likely to depend on the quality of my IT leadership and staff to outcompete my competitors. And unless a CEO is quite IT literate, s/he probably doesn’t want that additional headache of becoming good at figuring out how to hire good IT leadership.
So I’d hazard a guess, that insourcing and the use of Open Source will become more attractive for many corporations only if/when IT salaries drop more in line with other professions.
Sounds like a tax for stupidity and laziness, like AWS. This is how I feel about most B2B companies and software. I wonder how a recession and the end of free funny money will change that whole sector?
I pay a barber to cut my hair. Sure, I could learn how to cut my own hair, but there's a good chance I'll spend a lot of time and still mess it up.
I pay a mechanic to fix my car for serious repair. Sure, I could learn how to replace a transmission, but there's a good chance I'll spend a lot of time and still mess it up.
If these (and the endless examples of paying professionals) are a tax for stupidity and laziness, then everyone is lazy and stupid. If you're not a software company, there's a good chance it's worth it to save the time to pay someone to set it up for you. Also, if Joe's Fish Market wants a POS system and needs a server for it and he decides to set it up himself, if he gets it up and running, what are the chances it'll stay up to day and not have a firewall issue? Probably pretty low compared to if a professional did it.
Joe wants to focus on selling fish. That's where he's a pro. I don't know anything about fish, but I could set up a server for him. We all have our own skills, and it's often worth while to leverage other people's skills, because they'll do it faster, better, and it will likely end up cheaper after time and security are taken into consideration.
Meaningless analogy. Here some other meaningless analogies:
Why would anyone ever own a frying pan? Not only do you need to rent a stove, you also need to hire a chef to cook with frying pan, you need a station with chefs that prep ingredients and so on. Just go to a restaurant.
You pay a mechanic to fix your car? Why would anyone ever own a car when you can rent a car whenever you need one.
You pay a barber to cut your hair? Why not just wear a wig!
I mean, people do most of those things (the wig analogy is a bit off but people do get weeves and extensions) — not everyone, but I don’t cook, as an example. I own a frying pan, but I don’t know the last time I’ve ever used it. As a general rule, I don’t cook.
And many, many people don’t own a car, not because they can’t afford one but because it makes more sense to rent one or hire a car service when needed. Frankly, my dream scenario is to have enough money to hire a personal driver who is on-demand and at the ready when I need to go out and do things. For plenty of people, that’s anathema. But for me, I don’t like driving (or cooking) and I’d much rather pay someone to do it for me.
The same is true for software. I like tinkering with a lot of my own software, but if I was building my own business, I sure as shit would rather pay for an established company to handle some of the grunt work, rather than hiring dedicated teams that in aggregate would cost a lot of money.
The rise of SaaS and PaaS isn’t just laziness. It’s a recognition that for a lot of people, even developers, we’d rather entrust a lot of the operations and IT work to someone else.
I typically own cars 4-10 years old. I'm currently still happy with a 2008 model that has had exactly one non-maintenance, non-upgrade, cost -- which wouldn't even have prevented using it in any way, I just like the emissions system to be as eco-friendly as it can.
"Inevitable repairs after 4 years" is just a delusion, and silly.
Might I suggest you be honest with yourself and say you like the new car feel? Maybe even like it as a status symbol? Don't want to think about what tires to buy to replace worn-out ones?
I'm the opposite. I like having a scuffed-up car (or in this case, jeep), with dogs climbing all over the seats and sand everywhere from going off road. I'd rather use the thing and have fun on the trip.
Even if I drove my jeep off a cliff, called it a total loss, and got nothing back from insurance, I'd lose less money than you lost in 3 years of leasing -- and I've already had the thing longer than that.
“Might I suggest you be honest with yourself and say you like the new car feel? Maybe even like it as a status symbol? Don't want to think about what tires to buy to replace worn-out ones?”
Dead wrong.
I lease the cheapest car that is practical for my situation. I consider cars completely utilitarian tools. I get no joy from them, I hate driving and take public transit whenever I can.
I had very little money until I was in my late 20s when my career prospects finally took off. Cheap cars that failed frequently were a constant source of anxiety because I couldn’t get far enough ahead to maintain savings. When my career improved and I could afford small luxuries, I spent the money on leasing because I wanted to avoid the anxiety of cars breaking down. It was a gift to myself to lower my stress level.
EDIT: also, in northern Minnesota where the winters are hard and everything is covered in salt, car trouble DOES start after 4 years. Sometimes before.
Wow, you argued with the parent about their own priorities, and then proved their point anyway.
Yes, they don't want to think about what tires to buy. Or whether it needs to be fixed or not. The fact that repairs are not in inevitability but a possibility is part of the point.
The parent is making the point that they're rather throw money at the problem and not have to think about it, not that they've precisely run the numbers on all of the possibilities and decided their outcome is the most cost-effective.
Not thinking about the tires is exactly the point. You said it yourself. What are you arguing for then?
The OP prob doesn’t want to enjoy the car. It’s a car. I don’t care about cars either. I don’t enjoy them as much as use them for their purpose of transportation.
For the first two, there are definitely people how live like that, because of surprise tech companies like Uber making it possible.
Also literally everyone and every company relies on someone else to provide some services or hardware to enable people to do their job and live. Even this conversation could not even happen without other people making sure internet connections are kept stable. This whole "one person is an island" ideology is not something a lot of people subscribe to.
Some companies don't want to spend time doing software things that are not core to their business, so they pay other companies which sometimes do it better. Most definitely not always, but for some companies it would still be better than some in-house hodgepodge.
Actually, I seriously have been thinking about not owning a car ever again. We are the typical two car family. But I went a year without a car and I still go weeks on end without a car when my son needs it.
Uber is actually cheaper for me than a car + insurance + maintenance. I work from home. I’m going to give my car to my son when we move.
When I need to see my parents 200 miles away, I can hop on a small plane for $300 round trip and just work from there for a week.
There are other good replies to you, but one other thing I'll add: for a lot of companies it is much much easier to pay a steady $xxx/month than it is to pay a large amount up front and budget for unknown variable costs down the road.
It’s more like being a chef and paying another company to cut up your ingredients for you and cook them.
Companies these days just want to specialize in making cool menu designs and marketing and waiting on the three star Michelin review to roll in somehow.
> It’s more like being a chef and paying another company to cut up your ingredients for you and cook them.
That would be like a Hypervisor company paying VMWare to re-distribute ESXi or something.
But a farm company buying VMWare ESXi to run its IT infra instead of using, say, CentOS is exactly like a chef sourcing ingredients instead of growing them herself.
That is not the same analogy, because a chef's job is to make food, but say a trucking companies job is not to create GPS and mapping software, or some HR tool which tracks sick days etc... The difference is what the core competency of the company is.
Small companies will fail and vanish.
Large companies will layoff employees and reinvest in technology to leverage the ones that remain.
B2B software companies would do well to retain existing developers and grow their teams if possible to meet scaling demand and cover feature gaps in existing product lines as part of normal business.
One part of the dynamic, simplified: big companies can show quickest cost savings by laying off employees; this satisfies anxious shareholders during the bumpy times by suggesting that management is wiling to make "hard decisions." Such companies cannot quickly re-tool their technology stacks nor renegotiate 3-year software contracts. B2B companies tend to do very well as long as they are not solely focused on their startup/growth/pre-IPO customers, who get hit hard.
Here are some arguments for post-downturn tech growth:
1981 and the use of the PC + Lotus/WordPerfect/BASIC for efficient local compute
1990 and the surge of the LAN to replace centralized IT
2001 and the swell of SaaS
2008 and the swell of cloud
2022 and the .....
I am the 37 year old CTO and co-founder of a company that pays VMWare something like that per year because we need an endpoint management solution. We have a strong engineering team but that certainly isn’t something we are going to build ourselves. VMWare is not just virtualization.
I'm in a senior position but not CEO. I'd pay VMware for virtualization as it just works compared to the complexity of opensource solutions. For endpoint mgmt, I'm curious about your use case? Is it about managing virtual endpoints in the cloud, on-prem servers (physical or virtual) or are you talking about laptops/workstations?
Grove.co is a great example because it is totally not a software company. Is your role as CTO primarily the ERP & storefront, or just one or the other? I'm not following what you mean by endpoint (other than "storefront" because ERP would all be a SaaS right?)
Storefront. We have our own headless e-commerce platform, with iOS, Android, and Web clients. We also have our own order management system that mediates between storefront and our ERP (which is commercial SaaS). And a handful of other smaller applications for everything from outbound carrier rate card testing, to customer service tooling & automation (integrated with ZenDesk) and all sorts of other bits and bobs like ETL code, integration layers, marketing tools, etc, etc. We should not have quite this much custom software, but it takes time to migrate the non-strategic sub-systems to commercial solutions — and even then you’d be surprised how much custom software we DO actually need in a business like this.
My role also encompasses many “CIO-like” functions, but my area of expertise is in application development and I look to hire strong leaders in the other areas (or move certain tech domains entirely into other functions — eg our warehouse management system lives within our operations group, and me and my team help in an advisory capacity but don’t “own” the budget or WMS strategy).
It may be my pure naivety about management software, but I assume it just consists of spreadsheets, forms, secure login, data storage, and simple queries. I cannot imagine anything with this combination that couldn't be implemented in Google Sheets (and workspaces, and a handful of other google cloud apis) for at most $20 a month per user.
That's really interesting. So a company would hire Crowdstrike/VMWare, and say "here's all these endpoints, make sure they are secure"? And then CS/VM would provide the service to manage the assets and their connectivity? Ka-ching. I would not want to spin up an IT team to do all of this if I could hire some experts with concentrated knowledge.
They are almost certainly talking about Airwatch, which is a mobile device management solution (allows an employer to set restrictions on BYoD endpoints.) It might be a reference to Carbon Black, which is kind of like an antivirus client with some forensics capabilities added in.
usually cell and mobile device but can also include computers. Being able to push out software, policy updates, provisioning and remote wiping of devices.
We did the math at my previous employer. The cost of running OpenStack, in terms of training and day to day operations was higher than just paying VMware their licens fee. We even had a guy from RedHat help us do the cost analysis, didn't matter, cheaper to just pay VMware. This didn't even include the cost of doing the migration.
I can't imagine it being cheaper to build everything yourself on top of just plain KVM, or even LXC.
Working in a Data Center, we provide various services, including Dedicated Cloud and Shared Cloud. We also evaluated OpenStack years ago... yes, we came to the same conclusion and just use VMWare.
> "To me it just looks like older companies paying to keep from having to deal with Linux directly"
You can see people spending millions of dollars a year to keep from having to deal with Linux as evidence that they are stupid. Or you can see it as evidence that Linux really is that bad. It works both ways.
VMware gives you a thing people can be trained on and certified on, a brand you can hire for and screen resumes on, a consistent environment which behaves in a predictable way that you really can turn employees into replacable cogs. Any helpdesk or admin employee can deal with VMware, any MSP, any tech recruiter, and a lot of training companies. You can get backup systems which "support VMware" and storage which integrates with VMware snapshots, and reporting tools which work with VMware.
It's almost not about the tech at all, it's about how do you build companies on shifting sands? You define interfaces for components which can be plugged together. "VMware" is an API or interface that the business can work to; vendors can say "deploy this OVF to VMware", sales can say to the business "this thing we need works with VMware" or to the customers "we can work with your VMware" or "our offering is trustworthy because we use VMware" and the customer recognises the name. HR can say "we need to hire people who know VMware" and that means something fairly specific to the wider world. "runs on Linux" and "people who know Linux" are wildly, wildly, variable and vague things which could mean "ran a website, minimum wage" or "turns SELinux off to make things run" or "was SRE for FAANG" or "did a PHD in AI for tuning networking stacks in HPC applications but doesn't know anything else".
You make software by defining interfaces and components that can be plugged together to make larger systems. Brands are that, for tech. Like you hire someone who "knows React" not someone who "is a programmer" because that's too vague and is as likely to get you someone who worked on a Java CRUD program or someone who worked on a Python log analyser. Like you hire a "service delivery manager" or a "customer account manager" and not "an employee".
It's a big plus in the corporate world to be able to outsource support. It's worth it for companies to pay VMWare, Microsoft, etc. larges sums of money for support contracts so they have someone to call when things break. While Microsoft sells Windows Server, they also try really hard to add on support contracts with it. Paying several thousand dollars a year for a support contract is probably cheaper than paying salary+benefits for someone within the company to maintain it, and you get the façade of talking directly to people who know the product inside and out
There is a whole world outside of silicon valley, crypto, and HN startups. There are huge companies that don't care a fart about open source, the newest buzzwords, or it's go/rust/java or c++. They want something they can get a full solutions from and that is companies like vmware, oracle, IBM, Dell. They want support from those corps when things fail and it's costing them millions of dollars per hour when the system breaks.
Throwing money at a problem is an easy thing to do, if you’ve got the money. Lock-in sucks, but having someone to blame doesn’t.
A friend uses VMWare in an IT role at a medium sized company. They don’t have a software engineering team, just a bunch of users and an IT skeleton crew; so it makes sense for them.
Whether or not those specific companies are good deals absent legacy requirements, how many engineers can you hire for that $100K+ to DIY? And how are you going to convince your auditors that you're taking appropriate steps to mitigate your risk? Companies broadly need to make build vs. buy decisions about a lot of things and they should generally be pretty selective about what they build.
Presuming for a moment that you’re under 40 for the sake of conversation:
Have you ever considered the other way around? That is, “What changes with age that would make someone over 40 prefer outsourcing a problem to an enterprise?”
It’s possible that this trend is a result of a different perspective.
Certainly part of it is that, as you have been around longer and maybe moved higher up, you probably better appreciate how expensive it really is to have "just" a small team doing something that could largely be outsourced. You have the developers of course, their benefits, their manager's salary and benefits and some small slice of attention up the management chain and across other functional groups like HR. And it's just one more distraction from the things that actually matter to running the business.
Everything in this conversation is dancing around the same thing: core competency.
Something I saw in action building a startup is that the fewer people you have on your team, the more efficient they are.
As you grow, it’s wise to focus your headcount on your core competency and outsource everything else so that you are committing the organizational expense of more employees to all and only what you need as a business.
Of course, enterprise stuff is not all roses. You still have to have someone with product expertise. There’s vendor lock-in. Enterprise software is often oversold. Etc etc.
There is no panacea, just stuff that works better in different situations.
I work for a regular corp. We have a lot of servers, our annual hardware bill is 8 figures (just for our single project), more than our developer's wages. 100k is a drop.
One thing you are paying for is maturity (in both software and the engineers) and predictable behavior. When you need to run a business sometimes (almost all the time) it's easier to pay people to get out of your way so you can execute. Execution is everything in running a successful and profitable business. Don't be penny foolish.
You should always outsource any part of your business that is not part of your core competency and doesn’t give you a competitive advantage - ie “the undifferentiated heavy lifting”.
I worked at companies as a software developer from 1996 - 2012 that had to manage their own infrastructure. But today, the only company that I worked for back then that would be managing their own infrastructure today is the one that has mainframes and hardware that handle the backends for lottery systems across the US.
By 2012, there was a slow shift to the cloud.
I first was exposed to how large enterprises worked in 2017. I was hired to lead two green field implementations. But at the last minute they decided to “move to the cloud” neither they nor I knew anything about the cloud. They hired consultants and a Managed Service Provider. Of course the internal IT department was vigilantly defending their turf and the “consultants” were old school Netops folks who only knew how to “lift and shift” and duplicate an on prem infrastructure and all of the red tape to the cloud and of course it was more expensive than just using a colo.
I spent the next six months after the decision was made studying AWS and getting a certification not because I value certifications (I don’t). But it gave me a guided learning path to know what I didn’t know. It did open my eyes to what I wanted to do - work with companies - specifically developers and operations to show them how to actually take advantage of cloud and not just do lift and shifts - ie true “Devops”.
I left that company and went to a small startup for two years where I learned everything I know about “cloud application modernization” and then ended up in Professional Services at AWS.
Until I started working with large enterprises and government organizations from the consulting side, I never appreciated the concerns of large enterprises and how they aren’t in the “tech” business and it does make sense to outsource that knowledge - not to ProServe we don’t do that type of work - to external partners.
As far as VMWare, as silly as it sounds on the surface. Companies actually use VMWare to manage hybrid infrastructure on the cloud and on prem as a “single pane of glass”.
Newer companies don't deal with Linux directly either. The vast majority use managed cloud services (kubernetes, containers, serverless, managed databases, etc.). For all practical purposes - most of the start-up players use "enterprise software" as well. It's just different enterprises.
> To me it just looks like older companies paying to keep from having to deal with Linux directly
New companies, too. There's a lot to be said for paying someone to make problems go away. Not everyone wants to write their own software or change their own oil.
Hire one person less and you've already broken even. Applies just the same to to any managed service on the cloud, to Outlook365 instead of your own email server, etc.
And when you outsource it - you make finding that next one person someone else’s problem. I’ve had to hire that “one person” before. It’s a pain. And while we were looking for that one person, I had to juggle my day job (software development) with net ops.
Yes I know how to do app dev + cloud Net ops, it’s kind of my thing.
The fat bosses above me get more cred by buying something expensive and ha ing everything outsourced, than doing something brilliant and inventing the future. This is the reason for it. I'm this way the fat bosses are left alone and can go home to their families, go on holidays, cabins and whatnot with not a gram of risk and uncertainty.
That's how a search engine should work: it returns only what you asks of it, knows how many results there are, can be forced to use your query verbatim.
Eh. Governments should absolutely not get in the business of creating or running an app store. Mobile computing is, effectively, a necessity in the modern world but the web already serves as a great independent distribution platform. We should rather focus on not enabling the technology giants to gimp the web for their business moats.
Hardware. If Firefox had a phone to compete with Android, even if was $1000+ it would gain ground. Also selling laptops to compete against Chromebooks.
The hardware has to be top of the line and work perfectly with the OS. Work with every major linux distro to make sure they are compatible with no fuss. Only make one or two models total. Rally the entire opensource openhardware community around a single high end model. No companies working on their own lines, but allow any manufacturer to release a phone or sell parts that match spec.
You are missing the most important point C) the outgoing president refuses to leave
The rioters wouldn't have ended democracy, but if they caused enough commotion to prevent certification there was a significant risk Trump would have taken advantage of the situation.
Instead of regulation, I'd like to see the government offer a free service. A digital commons. In this case the public library version of Tinder, with strict rules of who can be banned and where everyone is treated equally.
You want the government to be that involved in pair-selection in the population??? I am disturbed. Eugenics aside: you know that a direct result of this is that border services, local police, etc will have access to a database of dick pics, don't you?
the government has them anyway, it's just that in addition to having them, the tax payer also has to pay clearview AI or whoever else for providing that service privately. That's actually exactly how the US government acquires license plate and vehicle data in states where collecting that information directly is prohibited, they just use your money to buy that from the private surveillance industry. [1]
By believing in some sort of mythical distinction between private and public business you've created the worst world of all, in which a government can superficially claim its hands are clean, buy unlimited surveillance data from unregulated private firms, without any democratic accountability. You now have the privilege of filling up Peter Thiel's bank account, while Palantir runs a precrime division that your city council has never even heard of[2]
If they used and published a fair algorithm for matching, they wouldn't really be involved in the matching they would just be providing a venue. Similar to a city providing public space for people to meet, like a fair.
Do you think the FBI, NSA, etc doesn't already have access to photos posted on dating sites in the US?
NSA match? Based on your porn search habits, google search history, amazon order history, geographic location, and a social graph based on phone record metadata we recommend you the best possible match.
Even if true, "have access to" is doing a lot of work here. If I had a Borges-style Library of Babel with all the possible books in the world, all configurations of the letters of the alphabet, I would technically "have access to" all human knowledge. But that's very different from having a curated collection which includes specifically only those things, filtered perfectly for you.
>bullish on blockchain technology (which I see as basically git with trust/consensus features built in)
Blockchain and smart contracts are the perfect technology for managing a company's assets and voting rights, especially for startups. Imagine how much lower the risk for investors would be if the terms of share creation and dilution where completely spelled out in code. Option grants and lockup periods could be completely visible. Trading/hedging/derivatives could be available for even the smallest companies. Very tiny minimum investments could be taken with almost no overhead.
ICOs have the right idea, but they are just 99% scam illegal security offerings. An SEC sanctioned version of an ICO that is tied to real shares in a company would be a game changer.
I don't understand why a distributed solution is necessary here. Couldn't you just use a database and a git repo of stored procedures for share creation/dilution?
A database might be susceptible to tampering, etc. It might be simpler to just use the OCF file itself and put it under source control/ledger tracking via git.
I think the base level solution could just be an OCF file and git with some sort of consensus requirement among all partners before a merge to master is allowed.
The key thought is that the OCF file format standard is a great start but for sure other features/tooling around the format could be interesting to drive adoption.
I would be surprised if Cisco went bankrupt overnight, but to me their future looks quite bleak. Every day less companies need to buy their hardware as more move to the cloud. The biggest tech companies can build their own hardware. And the hardware isn't extremely technically advanced enough to prevent commodity competitors.
So one day if the revenue begins shrinking and they double down by going into debt to expand, then yes they could be facing bankruptcy just like Nortel.
This might be counter-intuitive but this market is still growing. Random reference from a quick Googling: "NEEDHAM, Mass., June 9, 2021 – The worldwide Ethernet switch market recorded $6.7 billion in revenue in the first quarter of 2021 (1Q21), an increase of 7.6% year over year. Meanwhile, the worldwide total enterprise and service provider (SP) router market revenues grew 14.4% year over year in 1Q21 to $3.4 billion. These growth rates are according to results published in the International Data Corporation" ...
"Cisco finished 1Q21 with a year-over-year increase of 3.4% in overall Ethernet switch revenues and market share of 49.3%. In the higher-speed segment of the Ethernet switch market (25Gb/50Gb,100Gb & 200Gb/400Gb), Cisco is the market leader with 40.9% of revenues. Cisco's combined service provider and enterprise router revenue grew 18.5% year over year, with enterprise router revenue decreasing 1.3% and SP revenues increasing 33.2% year over year. Cisco's combined SP and enterprise router market share stands at 37.6%."
A lot of cloud growth is reflected outside the cloud. Corporations still need networks even if they do some things in the cloud. There's generally just a lot more traffic all over the place.
This isn't really commodity. I work in this industry. a 400Gb switch isn't something you just build yourself or buy at your local electronics store. There is definitely competition but it's not exactly what I'd call commodification. What is true is that some of the building blocks are available...
There's definitely a range of future outcomes for this company but it's not gonna be the cloud that does it. Could be another bubble burst or major economic downturn combined with other factors (which I guess was sort of the Nortel story, though I doubt Nortel was sitting on as much cash as some of their contemporaries).
Cisco isn't the company you seem to think it is. They've spent the last ~15 years gradually diversifying away from that single point of business failure in their old line hardware business. They recognized the threat of cheaper competitive hardware products a long time ago, China gave them a serious wake up call (the issues with Huawei go all the way back 18 or so years now).
The majority of their sales come from software and services now. The business you are likely thinking of when you picture Cisco, has been shrinking. Growth in their other segments (whether organic or acquired) is keeping them flat more or less across the past five years (both sales and operating profit have been close to flat going back to fiscal 2017).
I was surprised when Cisco bought Tidal enterprise orchestration management tool (which I had worked with for years). Great way to get your foot in the door at a lot of Very Large financial companies offering professional software services. They've been buying up tons of B and C tier enterprise software for years, and a lot of blue chip clients in the process.
>Every day less companies need to buy their hardware as more move to the cloud.
That's not even Cisco biggest problem. Businesses still need to buy networking equipment, and there a more small datacenters than ever, but they aren't buying Cisco anymore. 10 years ago, Cisco was pretty much your number one choice, now they can't really compete. I'd be surprised if we have much Cisco equipment left in five years. It's almost like their R&D just stopped. Our next green field networking project will be completely without Cisco equipment, and we've been a Cisco partner for 15 years.
