IBM acquisition of Redhat

True story, my wife and I were watching TV when my wife asked, "What's Redhat?".  I then explained that Redhat was a company that (loosely) packaged open source software together and sold support for it.  Because my wife was familiar with Cloudera, I told her that it was the Cloudera of the Linux operating system world.

Then she blew me away by then asking, "Why would IBM want to buy them for $30 billion dollars?"

As a software developer that has worked almost exclusively on Linux in his career, it was a huge announcement.

After sitting back and pondering it for awhile, I was beginning to think about the move and it was a good move by IBM.

In my opinion, it is a great move for IBM.  But the probability of it being a success is low.

In one article I read, a Redhat engineer said: "I can't imagine a bigger culture clash."  I think that pretty much sums up the thoughts of myself and many other engineers.

Here were some differences I thought about after the sale was announced:

• IBM engineers are typically told to be wary of the GPL to avoid potential code pollution, Redhat engineers work with the GPL all of the time
• IBM often requires signed license agreements for code contributions to their code base, Redhat works with the open source community on tons of things as is
• IBM legal likes to get their hands into the middle of many things

This of course doesn't even get into the fact that Redhat & IBM have different competing technologies.

I read a tweet (which I'm having trouble finding), but it said something to the effect:

• IBM just paid 30% of their market cap for Redhat
• Redhat's headcount is only 3% of IBM's
• Unlike IBM, Redhat does not really have much intellectual property (IIRC, IBM has the largest patent portfolio of any US company)
• Unlike IBM, Redhat does not really have much capital assets

and I'm going to add

• Unlike IBM, Redhat gives away its product for free
• Unlike IBM, Redhat employees can leave Redhat and take leadership of their product with them

It's a huge culture clash.

Game Theory: Stores Dumping Ivanka Trump

I was thinking about the whole Ivanka Trump brand being dropped from stores.  Nordstrom recently dropped the Ivanka Trump brand and said:

We’ve said all along we make buying decisions based on performance. We’ve got thousands of brands – more than 2,000 offered on the site alone. Reviewing their merit and making edits is part of the regular rhythm of our business. Each year we cut about 10 percent and refresh our assortment with about the same amount. In this case, based on the brand’s performance we’ve decided not to buy it for this season.

Some, such as the President, think the issue was political and not based on sales.  But using some game theory logic, I think it's very likely the case was sales related.

Assume there's only two groups of customers before the election.

A) People who like Ivanka Trump Merchandise
B) People who dislike Ivanka Trump Merchandise

It's almost certain some percentage of non-Trump supports would stop buying brands that were associated with Trump.  These people come from group 'A'.

The question is, for the customers lost in group 'A', would other customers make up the sales difference?

If you're an Ivanka Trump fan and a Trump supporter from group 'A', it's unlikely you can makeup the difference.

Hypothetically, lets say you have two customers, each who loved the Ivanka Trump brand and bought 10 outfits from her in the past.  Going forward, one customer says she'll never buy Ivanka Trump again but the other really wants to support Ivanka Trump going forward.  Will the Ivanka Trump supporter buy 20 outfits in the future to offset the loss from the other customer?  Unlikely.  She might be generous and up the purchase amount to 11 outfits, but that's it.

If there were way more Ivanka Trump supporters than non-Trump supporters, perhaps the Ivanka Trump supporters could make up the difference.  But given the split in votes in the election, it's not likely.

To make up the difference, you really need customers from group 'B' to make up the difference.  However, if you didn't like Ivanka Trump merchandise from the start (i.e. it's style, it's fit, don't need that type of clothing) it's unlikely you'll ever flip over and start buying it.  There may be a small few that decide to flip over just to support her for the sake of supporting her, but it's hard to imagine that group being large enough (i.e. most people will not buy something they don't need or won't use).

If Ivanka Trump merchandise were some general clothing commodity needed by customers (i.e. tube socks, underwear), you might be able to make the argument people could switch over.  But given it's supposed to be a lifestyle brand, it's hard to imagine the switch happening.

If Ivanka Trump merchandise were a major "destination brand", such as a Coach, Michael Kors, Kate Spade, etc. her brand could perhaps weather the storm temporarily.  Unfortunately, she's not in that category yet.

Update 2/23/17:

It seems that Ivanka Trump perfume has shot up to a top seller on Amazon.  This is perhaps the perfect example showcasing the counterpoint.  As a single "commodity" item ("commodity" here meaning interchangeable), it has a chance to have sales even out or go up.  If you are a person who generally buys perfume, lets say one bottle a year, you can easily switch over if you hadn't bought Ivanka Trump merchandise before.

Online dating websites: Why won't you take my money?

A few weeks ago I wanted to buy an online dating subscription for my single friend to try and get him out there in the dating scene.  Perhaps just a one month subscription on a website to get him going (if he would even bother to sign up).

Now, I thought this would be easy.  Go to website, click on "gift card", click, click, enter credit card, click, click some more, get QR code or coupon code.

To my surprise, this was not to be.

match.com: One of the few websites that actually offers gift subscription, but you have to contact customer service.  Why?

eharmony: You have to CALL to get a gift subscription.  You've got to be kidding me.

okcupid: Free website, but figured you can buy a gift card for the extras on the website.  Nope.

tinder: likewise

howaboutwe:  No gift subscription available.

I looked at a few more niche sites which also did not offer gift subscriptions and just gave up at this point.

When I pointed this out to a friend, we couldn't help but wonder, "Why don't these websites want to take my money?"

Wouldn't gift cards/subscriptions to these services be something people love to get for their single friends?

I'm totally missing something.

Looking back at "The Anatomy of a Large-Scale Hypertextual Web Search Engine"

I recently read the famous paper "The Anatomy of a Large-Scale Hypertextual Web Search Engine".  It's a paper written by the Google co-founders Larry Page and Sergey Brin circa 1997/1998 about their web search engine research while they were students at Stanford.  The very first sentence of the paper summarizes its contents quite well, "In this paper, we present Google, a prototype of a large-scale search engine ...".

The paper is very interesting looking back on it 17-18 years after it was published.  I thought I'd comment on some of the fun things I read.

Improved Search Quality

November 1997, only one of the top four commercial search engines finds itself (returns its own search page in response to its name in the top ten results)

If the above is true, it is truly comical by today's standards of web search quality.

Major Data Structures

Throughout this section, Brin & Page continually do "bit stuffing" to save storage space.  Typically only done by those dealing with firmware, I find it a little ironic that they had to go to such lengths.  Given the amount of data they had to deal and the amount of hardware resources they had, it was obviously justified.  But it's sort of funny to think about it given today's data sizes and hardware resources that Google, Facebook, Yahoo, Bing, etc. have.

Servers to Crawl the Web

The original Google used a single URL server to serve lists to 3 web crawlers.  Insanely tiny by today's standards.  Of course, it was a much tinier web in the 1990s.

Social Consequences to Web Crawling

Perhaps the best part of the paper, Brin & Page talk of the social consequences of their crawler.  Most notably, some website owners were confused at what a web crawler was and why they were looking at their page.  Some would e-mail them asking questions ... some even called them.

Storage Requirements

Apparently the original Google had a compressed repository of just 53GB of data.  Insanely puny by today's standards.

System Performance

In addition, it took only 9 days to download all of the data on the web at the time.  It's not clear how many machines were at their disposal, but it did not appear to be more than maybe a dozen (as said above, they only used 3 for web crawling, and they note they used 4 for sorting the index).

"Advertising and Mixed Motives"

In this appendix section Brin & Page talk about the conflict of interest that search engines have when advertising is involved.  They specifically site the search of "cellular phone" as a keyword and say

It is clear that a search engine which was taking money for showing cellular phone ads would have difficulty justifying the page that our system returned to its paying advertisers. For this type of reason and historical experience with other media [Bagdikian 83], we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.

It's ironic of course, b/c this is nearly the exact opposite of modern day Google.  A search for "cellular phone" on the site returned for me (in order)

• An iPhone ad on apple.com
• An ad for cell phones off a retailer site
• An ad for Sprint
• A Google Maps result for several retailers that sell cell phones
• The Wikipedia article for "Mobile Phone"

This doesn't count all of the ads that are on the right hand column.

Interviewing 1-on-1 or in Pairs

When I was interviewing for a new job sometime ago, a big style difference I noticed was that some companies interview candidates in pairs while others interview 1-on-1.  Over my lifetime, I think about 1/3rd of companies interview in pairs (or more) while others do 1-on-1 interviews.  As I was thinking about it, I think the pair interviewing is much better.  Here are some of the reasons.

Have More People Meet the Candidate

Its at the interest of both the company and the candidate to meet more people.  If the candidate only interviews with 3-4 people, it may be hard for the interviewee to get a gauge on the company and culture.  If you double that to 6-8 people, they can get a better feeling.  For the company, it may be best to do this to get more opinions on the candidate.  Even if they aren't people the candidate will be working with, it's still good to get more opinions from people around the company.

For example, I know of a group that regularly sends their admin/secretary to interview candidates too.  On atleast one occasion a candidate treated the admin/secretary with disrespect and blew off her questions.  I know of a similar situation when a young engineer was treated disrespectfully when interviewing an older engineer.  These probably weren't candidates you wanted to hire, so having an non-traditional team member interview the candidate ended up being a great idea.

Develop A Consistent Interview Style

There are many different styles in interviewing.  Some like to ask one big design question, while some like to ask tons of tiny quick questions.  Some like to jump in all the time in the discussion, while some like to just let the candidate do most of the talking.  Some like to be more aggressive while interviewing (a griller), while some are more passive (let the questions come).

None of the above is "bad" or "good", it's just different styles.  However, I think most would agree it's not "good" if all the interviewers are that divergent in style.  At the minimum, a candidate might wonder, "What exactly is the culture/style of this place?"  By pairing up the interviewers with other group members, a more consistent style can be developed over time.  This is somewhat related to ...

Help Train Younger Interviewers

Following the above, it's also a good way to train younger team members on good interview techniques or style.

Develop A Consistent Interview Judgement

I once interviewed at a company that did 1-on-1 interviews and one person who interviewed me started <b>that week</b>.  Now, I'm sure the interviewer was a good engineer and a good person.  However, he had certainly not developed a rapport with the manager and team members yet.  How much will you really value this person's opinion after the interview?  If they say, "The candidate is awful!" or "The candidate is awesome!", how much will you believe them?  It might be wise to pair up the interviewer with someone who has been with the company longer.

Give Consistent Information

As a follow up to the above, sometimes an interviewer doesn't know how to answer your questions about a certain topic.  Especially when they are really really new.  In a younger/startup kind of company, perhaps some of this is cannot be avoided.  However, for a larger/more established firm, the company perhaps does not want this to occur.  Interviewing in pairs can avoid some of this.

My Experience Writing For a Content Farm

Editorial Note:  I wrote the majority of this blog post several years ago but never bothered to post it.  With the recent closure of Yahoo! Voices, which was originally Associated Content, I thought I'd edit it and finally post it.

Several years ago when Yahoo! acquired Associated Content, I was curious about the website.  For those who don't know, Associated Content was a website where anyone can write an article, post it, and get paid money for the views and ad clicks on the articles written.  Unlike other content farms out there (eHow, Hubpages, Squidoo, to name a few), Associated Content sold itself as a company with more journalistic quality.  They desired articles covering reviews, op-ed pieces, advice, and even coverage of local events.  They would pay people upfront for higher quality articles and reject articles they considered drivel.

After it was acquired by Yahoo!, Associated Content was renamed Yahoo! Voices.  The idea behind the acquisition was that Yahoo could get a number of unique articles written by Associated Content's users that could be fed to Yahoo's users.  They could be specially targeted with local articles that wouldn't be possible otherwise.  I recall a BusinessInsider article (The Inside Story: How Yahoo Bought Associated Content) that described how some tests showed huge click rates on articles.

So I decided to check it out and see how this site worked, so I went and wrote a bunch of articles.  They weren't anything particularly out of this world: reviews of video games I played, opinions on baseball players that should make the All Star team, random tech tips, etc.  The experience was fun.  I did pick up some extra scratch, but learning about search engine optimization, backlinking, and the content farm industry was the most interesting part of the experience.

Associated Content/Yahoo Voices! made the article writing process fun.  They gave you badges/awards as you completed more articles and made more accomplishments.  However, the fun does wear off at some point.  At some point, I just stopped trying.  Writing articles became boring and I was blindly pumping out articles just to try and "win" badges.  I can't imagine what drivel comes out from people who do this for a more serious living.  I ended up writing somewhere about 150 articles over 4 years.

While my earliest writing attempts were legitimate, taking a reasonable amount of time to write, the quality of my articles went down over time.   As luck would have it, I wrote an article related to "Top Ten Videos about X".  Think of something like what you'd see on BuzzFeed today with all their lists.  Amazingly, in a relatively short time period, this became my most viewed article.  So I wrote more just like it: top ten quotes from this TV show character, top ten videos from a channel on Youtube, top ten easter eggs in this video game, top ten moments from this sports team, etc.  To put it bluntly, these articles were trash.  Just random lists of links with only a sentence describing the link to the video.  These "articles" generated me more views than anything else I wrote, and it wasn't even close.

There's a part of me that would sit and think, "How in the world did this article get viewed X times.  It's complete trash.  Who in the world is searching for this?"  God knows what people search for on the internet, and with a billion people out there, I suppose I'll get views once in awhile.

I'll give Yahoo! some credit.  While Associated Content was willing to accept the above "Top Ten X" articles for publishing, Yahoo! was not.  They reached a point that such articles were considered bad enough trash that they wouldn't put them on their website.  So good for them.

At my peak, I earned around $50 a month from Associated Content based on my article views.  If I kept at it somewhat more seriously, making a few hundred dollars a month would have been easily doable.

One of the more interesting observations was how search engine algorithm changes (most from Google & Yahoo) would effect views and thus payouts.  Without changing anything or even writing any more articles, I saw payouts averaging $50 a month plummet to $4 a month, then jump back up to $20 a month.

Now that the content from Yahoo! Voices/Associated Content is gone, I may recycle some of those articles and put them on this blog.

The N=1 Problem

Recently read this article from ESPN about how the Angels are trying to rebuild their minor league system.

http://m.espn.go.com/mlb/story?storyId=10470778&src=desktop

One of the subtle reasons I love reading articles like this is that at the core, major league baseball teams are no different than other national or multi-national corporations.  All the same management, mentoring, training, recruiting, and retainment issues all organizations face are the same in baseball as everywhere.  It's just that when spoken about in a baseball context, the article is way more interesting than some droll tale of organizational synergy.
 
There's two chunks of the article I love the best:

Most of the lessons of the sabermetric revolution are based on what's called large-N analysis: looking at all the players who ever played and finding, in millions of data points, answers about player tendencies and optimal strategy, and meta-answers about the reliability of statistics. But developing a prospect is an N=1 problem: Each player's combination of skills, genes, experience, health, neurology, psychology, size and style makes him unlike any other player.

then later

How a coach teaches pitchers to back up a base isn't, ultimately, all that important. What's important is that no coach has to spend more than two minutes of his life thinking about it. That frees him to focus on the N=1 problems

In other words, if a coach has to waste his time dealing with "stupid stuff", then the coach can't concentrate on what's important, namely teaching the player what they need to be taught to reach the next level.

I can't help but think about this within the context of a lot of major companies.  Every employee will have different opinions on what are "annoyances" or "interruptions".  It's likely impossible to remove all of them for every employee, but the hope is that most organizations limit it to a N=2 or N=3 problem for most employees.  Unfortunately, I suspect many employees are dealing with N=9 or N=11 problems.

Big Data vs. HPC/Supercomputing

There's been a lot of articles about what is "Big Data" and how does it compare to traditional Supercomputing and High Performance Computing.  I thought about it, and devolved it into a simple mathematical statement.

In Supercomputing / HPC

Computation Time >> IO Time

and in Big Data

IO Time >> Computation Time

The architecture of the hardware, the networking solutions, the software you use, how you design your software, etc. etc. is centered around this simple statement.

High performance through strange correlations

Awhile back I learned of a really interesting statistic in Malcolm Gladwell's book Outliers.

In some standardized tests, test administrators like to ask students survey questions before the test so they can try and correlate test performance to other social factors.  These questions are pretty normal, things about your social life, friends, and family.  However, this survey is so long and tedious that many students just give up and don't even complete the survey before taking the test.

What several researchers found was that there is a strong correlation between percent of the survey completed and performance on the test.  Students that complete a higher percentage of the survey perform better on the test.  Note that it's not how they answered the questions on the survey, simply the fact that bothered to complete to the survey.

The suggestion is that patience, diligence, and work ethic are actually more important than smarts.  If you can stomach through this tedious survey, you've probably stomached through a lot of homework assignments to be able to learn the material well.

Not so long ago, I was on a committee to review a contract for a procurement.  While reviewing the bids, I noticed that there were bids that were horrifically bad.  At the same time I noticed the bad bids were much shorter in length than the better bids.  In fact, by the time the committee was done with the selection process, the ranked order of the bids was strongly correlated to the thickness of the printed bids.  My recollection is that if only two bids had been flipped in their ranking, the correlation between thickness of printed bids & rank would have been perfect.

It got me thinking, the correlation was similar to the correlation with the standardized tests.  The companies that put in way more effort and time into their bids, probably cared about their bid a lot more.  At the end of the day, the fact that they cared about the bid a lot more, probably meant they wanted to win the contract a lot more, and meant they would care about fulfilling the contract a lot more.

Apple TV vs Xbox/Playstation

I saw this article, The Fall TV Lineup May Include Apple Dominating Gaming,  and wanted to comment, because I couldn't help but disagree.

The author makes the argument that an Apple TV would completely crush Xbox, PS3, Wii, etc.

Here are some of the arguments in the article:

Apple is going to dominate where their rivals cannot simply because of the support of small, third-party app developers.

That the Apple TV is already nearly powerful enough to run [games like Call of Duty]. Perhaps not the highest of the high end, but give it a year or two. That’s the thing: Apple will likely push yearly hardware (and software) updates for anything they do. Microsoft has not updated the Xbox in over 7 years. Huge mistake.

the audience for non-hardcore games when Apple opens up an Apple TV SDK will be much larger than the audience for the hardcore games.

Apple will not win this space by playing the game that Microsoft, Sony, and to some extent, Nintendo, are playing. They will win by changing the rules of the game. And that game is all about developers, developers, developers, developers.

I disagree with these based on one major theory:

The TV is not a casual entertainment device, it is a serious one.

People spend a lot of money on better sound, better definition TVs, etc. because they want a much higher quality experience when they sit down.

They pay a premium on cable, on video streaming, and movie disks (i.e. blue ray vs. DVD) simply for the privilege of experiencing this higher quality content.

On phones, people can play Angry Birds or Words With Friends in 5 minute increments, but I don't believe people do that on a TV.

This isn't to say there isn't a casual market for this.  After all, the Wii sold 100 million units.  There is a market for the casual, but is it one that can destroy the Xbox or Playstation?  I'm skeptical.  This is not a world where a Zynga can thrive, it is one where an Activision can thrive, where investing $50 million in the development of a game results in huge sales and profit.

Now, this isn't to say there won't be people that develop the $50 million dollar game for the Apple TV, I'm sure they will.  But will they develop it only for Apple TV or also for Xbox & Playstation?  If you're willing to put $50 million into the development of a game, I can't imagine it being for only one platform.

Livermore Outlet Mall Analysis - Competing with Vacaville and Gilroy Outlets

So a new outlet mall just opened up in Livermore (Paragon Outlets).  I don't know everything about retail shopping and brands, but it seems pretty damn nice.  It's headlined by the Saks, Bloomingdales, and Neiman Marcus department outlets.  There are also outlet stores for premium brands like Prada, Aramani, Burberry, Barneys, Kate Spade, Coach, and others (which to be very honest, I had never heard of the brand Kate Spade and did not know about its popularity until I saw a line of 20 women lined up outside of their store at 10pm).  There are many "middle tier" stores that I shop at like Gap, Banana Republic, Jcrew, Lacoste.

Anyways, I ran upon this article about the affect the new outlet mall would have on Gilroy and their revenues.  There was the following quote:

"“I think they are far enough away that there isn’t a lot of angst here that they will create competition,” said Susan Valenta, Gilroy's Chamber of Commerce CEO.  "

This quote got me thinking, is it really true?  I know that there are people out there that do the following analysis for a living, but I'm going to play business analyst and see what I can come up with.

As far as I can tell, there are two other major outlet malls in the bay area that are at the same level of Livermore's, one in Vacaville and one in Gilroy (although many believe Livermore has more/better stores/brands, but we're going to ignore that).  There's one in Napa, but its much smaller than the others so I'm not going to count it.  (Update: Someone reminded me that the Great Mall in Milpitas is sort of like an outlet mall.  But I'm not going to count that either, it's really a half outlet mall and half normal mall.)

Using Google Maps, the following are travel distance times from a number of Bay Area locales to these outlet malls.  Presently, the new Livermore Outlet Mall is not on Google Maps, so I will use the Target across the highway as my destination point (Livermore's outlet mall is the south exit off the highway, Target is the north exit at the same spot.  I also forced Google Maps to reroute the Target directions to use the same exit instead of a 1 minute faster local road.).

City	To Livermore	To Gilroy	To Vacaville	Closer to Livermore than Gilroy	Closer to Livermore than Vacaville
San Francisco	49 mins	86 mins	66 mins	37 mins	17 mins
San Mateo	43 mins	65 mins	85 mins	22 mins	42 mins
Foster City	40 mins	64 mins	84 mins	24 mins	44 mins
Redwood City	49 mins	60 mins	93 mins	11 mins	44 mins
Palo Alto	51 mins	52 mins	96 mins	1 mins	44 mins
Mountain View	45 mins	46 mins	99 mins	1 mins	49 mins
Cupertino	49 mins	42 mins	103 mins	-7 mins	54 mins
San Jose	42 mins	35 mins	97 mins	-7 mins	55 mins
Milpitas	36 mins	44 mins	90 mins	8 mins	54 mins
Fremont	31 mins	52 mins	82 mins	21 mins	51 mins
Castro Valley	20 mins	68 mins	68 mins	48 mins	48 mins
Oakland	37 mins	80 mins	56 mins	43 mins	24 mins
Walnut Creek	28 mins	82 mins	46 mins	54 mins	18 mins
Concord	34 mins	87 mins	44 mins	53 mins	10 mins
Pittsburg	44 mins	98 mins	51 mins	54 mins	7 mins

So what do I get from this chart?

Not surprisingly, anything in the East Bay is now significantly closer to a major outlet mall.  Many East Bay communities that were closer to the Vacaville outlet than Gilroy's will find themselves closer to Livermore's outlet now, even the Northeast cities like Concord and Pittsburgh will still find themselves closer to Livermore than Vacaville.

As you move South, towards Fremont & Milpitas, the Gilroy Outlet was significantly closer than the Vacaville one, presumably getting all the business from this area.  The Livermore one is now significantly closer for many of these areas and you would expect could take away those shoppers.

If you live in the South Bay closer to the San Jose area, this is where the Gilroy Outlet finally becomes closer than the Livermore one.  However, it's not significant.  For both San Jose and Cupertino, the time travel savings is only 7 minutes.

As you move north on the peninsula, Gilroy gets further away and Livermore gets closer thanks to major highways/bridges (most notably 92).  It's basically a wash once you get up to just the Mountain View and/or Palo Alto area.  Once you get into the Foster City and further North area, Livermore's outlet mall is over 20 minutes closer.

So it appears that for pretty much most of the bay area, Livermore's new outlet mall ranges from a "bit closer" to "much closer" than the Gilroy or Vacaville outlet malls.  Even in the areas where the Gilroy or Vacaville outlets are closer, it's not enough of a time difference to make up for any major brands and/or stores shoppers really want to aim for.

Conclusion? Gilroy & Vacaville should be concerned of increased competition if they are only thinking of distance to location.

This is how you lose a sale Best Buy

There have been numerous articles written about why Best Buy is losing business (I recall reading "Why Best Buy is Going out of Business...Gradually" recently).

Today I went to Best Buy to buy a tablet.  I had my credit card ready and was going to make a purchase.  All I was debating was which one I wanted.  Most importantly I wanted to try out some tablets to see if the ~7 inch tablets would be good enough for me or if I needed one of the ~10 inch ones.

Several of the floor model tablets were broken, prohibiting me from trying them.  When I alerted the staff, they apologized, saying that someone had broken one of them several days earlier.  I'm like, "But I can't buy one until I can try it."  He apologized again ... and that was that.

So this is how you lose a sale Best Buy.  I ended up wandering into a Verizon store and was able to try out the tablets I wanted to try.   Verizon would have gotten the sale if they carried the WiFi only versions, but they did not.  I guess I'll pick up the one I wanted at Frys or maybe I'll just buy it on Amazon.