Hal Stern's thoughts on the economy, software, services, technology, and snowmen. Hal Stern: The Morning Snowman

Find a group of people with enough critical mass to start random conversations and you find the random linkages of who knows whom via some path of relatives, friends and former roommates. Playing this game (known as "Jewish Geography" in some of my circles) via the global community of eBay gives even more interesting and personal results. Not only are you searching based on a name, you end up e-meeting people with similar interests and passions.

Rewind 35 years. My maternal grandfather was a Pennsylvania doctor; my paternal grandfather owned a general store in Smithburg, NJ. Don't bother with Google for the physical geography; it's the home to some flood plain monitoring equipment and farmland. Grandpa Herman's store evolved from a carriage stop; Smithburg is midpoint - the way the crow flies or the carriage is drawn - between New York City and Philadelphia. Smithburg General Store was a disorganized mosaic of office supplies, hardware, cold cuts, and engine parts. You could get a tank of gas pumped and the same person (frequently my father) made you a sandwich, tossed in a bag with carriage bolts and some oil (sandwich or crankcase, your choice). Sundays were family days, when Grandpa closed up in time for an early dinner, but not before taking a paper bag and filling it with the objects of every grandchild's desires: gum, candy, trading cards, new pencils, and whatever else had accreted along his path between cash register and front door. Grandpa made a literal grab bag of goodies. Many of those trading cards ended up in the spokes of our bicycles, riding off all of that excess energy created by eating too much candy.

One Sunday in the late 60s, several of us popped into the store before Grandpa did the load-in. In the floor, near the register, was a small trap door that functioned as a safe at one point. Inside were all of the trappings that didn't quite make the candy aisle, including a dusty box of Topps trading cards. We were handed several unidentified wax packs of cards, with Grandpa's shrug indicating that he didn't know what they were either, but his smile said that he was happy we'd take them. We tore into the packs that afternoon, realized that they were basketball cards of some unknown vintage, mostly of players on teams we didn't recognize, so they were shoved into a back pocket while we hoped for another dip into the paper bag. The cards were dumped into the big box along with the rest of my pasteboard empire, where they hibernated for more than 20 years until my parents insisted I finallyclean out my room.

The card box came to rest in the late 90s at my house in Burlington, Massachusetts. One of the advantages of living in a major east coast city is that the sports teams tend to have long histories, so it's easy to pattern match childhood possessions against popular culture. Those nondescript wax packs of cards from Grandpa Herman were a set of 1957 Topps basketball cards, the first year such a set was produced. In the middle of the pack was a man in a kelly green uniform, sporting the #14 of the Boston Celtics - one Bob Cousy. In my single-digit years, this never registered with me; in my young adulthood I immediately recognized one of the saints of Boston sports. Cousy's card sits above my desk, where he is dribbling toward the hoop, always (in the words of the late Johnny Most) "has a notion, going right to left." I'm reminded daily of Grandpa Herman.

Riding shotgun in the wax pack with Cousy was George Yardley, who set the single-season scoring record in the 57-58 season. Yardley was the first player to score 2,000 points in a season, and is enshrined at the other end of Massachusetts in the Basketball Hall of Fame. Even if you follow basketball, it's likely you didn't know that much about George Yardley, or any other NBA baller from that season. They were, and are, in the words of someone who met most of those players, "very nice, humble men".

Those words come to me via email from Rob Yardley of California, son of George Yardley. He bought his father's rookie trading card from me via an eBay auction, and I only noticed the surname similarity on my way to the post office. Rob is putting together card sets for each of his kids -- George's grandchildren. My grandfather's desire to clean up his safe area, followed 35 years later by my desire to clean up boxes of old trading cards, will connect the Yardley children to their grandfather.

We have been promised a true winter storm, bordering on a blizzard, lasting into Sunday morning. Our good friend Mr. Car Thermometer was checking in at 5 degrees Fahrenheit this morning, which causes an underflow error when translating to Celcius.

With advance warning, however, the Snowman family is fully prepared for this weekend's weather events:

A dozen DVDs, some from Netflix, some from Blockbuster.

Two new Gamecube games, rented from Blockbuster.

A reasonable supply of books delivered in the past month from amazon.com.

A working internet connection, which is significantly improved from 8:00 am today, when one of the cable company's amplifiers was suffering from the shivers. Even the bits are cold.

A week's supply of Campbell's Chunky soups. Seriously. Right up there with Pop Tarts as nerd fuel. As of 1:00 PM Eastern time, we have almost two inches of snow on the ground. The roads are slippery, but that didn't stop our intrepid mail carrier from trucking (literally) up the hill. The "rain nor sleet nor snow" mantra isn't apocrypha, it's a fact. You heard it here first: Forget the Hummer, the next status symbol with four wheels is a USPS truck painted bright yellow.

It's been cold in the greater New York City area. Not just your usual January chill, but downright cold and windy. It's Winnie The Pooh's Blustery Day with 'roid rage. Today was so cold that none of the tabletop vendors were in Times Square. These portable shops, dotting the corners of Times Square, provide an instant visual reference on the relative health of our economy. Nobody needs giant crossword puzzle books, I (heart) NY t-shirts for $5, their name spelled out in giant animal letters, or a pair of Fakeleys (fake Oakleys, 2 for $30, wear'em until the paint rubs off on your nose), so if there are crowds near the tables, there's money flowing into the Big Apple. No crowds today. No tables for them to crowd around. Even if you wanted a toque with a mis-spelled slogan on it, you were out of luck. It's cold.

Tomorrow it's going to snow. First big snow of the year. Kind of like an IPO for snowmen. Sometimes cold is cool. I just have to find my Fakeleys so that my good sunglasses don't end up rolled into a snowman's gut.

Growth (and demand) are good, but profit is better. Explosive growth with no profit only leads to bubbles, not sustainable markets. Give me eBay over pets.com any day, because eBay has a profit model. Models are nice, but mechanisms to monetize them are even better. Creating profit out of an explosive growth model means taking the cost out, and often that requires establishing well-known - and socialized - standards with which to compare costs.

Here are two short-lived examples of monetary standards invented to remove the cost of creating useful legal tender. Fractional currency entered circulation due to a shortage of coins post-Civil War; it replaced postage stamps as a means of small-denomination payment. Shortly after that, with silver prices dropping amidst new mining of the precious metal, the government minted the trade dollar. One of the heaviest silver coins ever producted, trade dollars fluctuated between bullion value and face value, often to the detriment of someone receiving a one as payment. Without well-defined standards for the trade dollar's value, it lost favor domestically and eventually lost its status as legal tender.

Points of today's numismatic detour: Items of value that are easily identified and exchanged are fungible assets. Items of value that are hard to value or exchange create cost headaches. Why I care: As CTO of Sun Services, my team is chartered to create new IT infrastructure models that fix the total cost picture -- not just acquisition, but operational cost over long periods of time. Server assets are not fungible -- you can't easily trade a 2-processor web server for half of a 4-processor web server without a serious investment in security, containers, virtual networking, and resource management. But take virtualization technologies (Solaris 10 containers, resource management, Nauticus VLAN creation, Solaris Security Toolkit features), and apply best practices for management, and you start down the path of making server fractions exchangeable. My job is to keep IT infrastructure from becoming the equivalent of the trade dollar -- heavy, of uncertain value, and hard to exchange at a fair rate.

Next on my list is investigating the software deployment models, instrumentation, and the metering engines needed to create the profit model around the demand model. With models like the dollar per CPU-hour, Sun can attack IT infrastructure delivery the same way Pratt & Whitney does jet engine delivery - we supply the thrust at a cost and weight, and bet on our engineering capabilities to assemble the solution so that it's profitable for everyone. When we say "scaling with technology", we're value engineering our ability to deliver a software stack, via a subscription model, that has a specific performance, service level, and capacity. The only way to solve for both Sun and customer interests is to remove operational cost -- which means more automation, more instrumentation, and fewer people. Anything else is adds cost and complexity, violating the eleven word koans and definitely touching a tender spot with those who fund IT.

My grandfather was a doctor in the coal-mining region of Pennsylvania until the mid 1940s. That's part of his office card -- note the 3-digit phone number. Not an area code, not an exchange -- the whole phone number was was a trio of digits. Any call outside the local exchange needed the operator do to the equivalent of a DNS lookup for you.

We're adding area codes to New Jersey today at an average of about one a year. In AT&T-ville, where we used to enjoy the "first" area code (201), we now have four area codes to cover a 40-mile radius of the Garden State. But that's not the growth vehicle - I have more IP addresses than phone numbers in my house at any time, and that's likely to increase over time. Anyone who bets on saturation or believes that a given communications technology has reached its full potential need only look at Dr. Peril's card.

One of the drivers of exponential growth is socialization of the technology. I'm betting on continued demand for IT infrastructure because of the growth in instant messaging, email, cell phones, video messaging, digital music and video distribution, on-line photographic print services, and the continued evolution of the content consumer as an equal content creator - even if "creation" involves editing out an ex-friend from a photo before sharing it. This view is taken to an extreme in the Museum of Media History's future of newsmedia.

The direct IT consumers in this world are those who create the content consumption and distribution markets; the end user or consumer is an indirect Sun customer. One example is our "powered by" partnership with Major League Baseball and the mlb.com site. Our existing customers and channels don't go away or shrink, but the manner in which they consume and deliver IT assets evolves as Sun hardware, software, services, and operational knowledge become ingredients in the media-rich network.