It’s time to renew our Microsoft partner program membership (always an adventure, although somewhat easier than it used to be).  Despite the remaining huge shortcomings of the program (don’t worry, I won’t repeat my one million earlier posts on this subject), we’ve decided to renew again.  A quick look at the requirements showed we could easily renew at the Gold level, or the Plain Old Certified level, based on the number of “Partner Points” we have (or could accumulate by our renewal date).

BUT a more careful review showed two changes.  One, the Gold designation will vanish partway through this renewal period for us.  And Two, to achieve Gold, there’s a new requirement that we force our customers through yet another Microsoft “customer satisfaction” survey process.  So in exchange for further inconveniencing our customers at Microsoft’s request, we get a tag that will be discontinued shortly?  Only Microsoft (and frankly, only the Microsoft Partner Program group) could come up with a new anti-customer requirement just in time for a program to be phased out.

No brainer right? — no thanks.

OH, but you should HEAR the wailing and pleadings from the Partner group.  “Do you REALLY want to give up ALL the benefits of being GOLD??”  Ummm, you mean the ones you’ll supposedly be taking away this year anyway?  Yes.  “Do you REALLY want to renew at a REDUCED level?’  Ummm, you mean the level ALL Gold Certified Partners will have later this year?  Yes.  (I especially like that second argument, which I’ve heard both from humans on the phone and from the automated messages on the Partner Program Web site — “we really don’t think Gold is important, we’re phasing out the program, now we’re stressing ‘competencies’ over simple program level designations, but surely you don’t want to renew at the level of those unwashed masses beneath you?”)

So in any case, look for the handsome blue logo to replace the handsome gold logo we’ve been using, and look for no other differences whatsoever in our fine relationship with Microsoft and its customers.  (Except of course for the slight improvement for our own customers — the ones we won’t be hassling with another request for “just 10 or 15 minutes” to fill out another meaningless survey from Redmond.  You’re welcome.)

First, let’s not bury the lead:  Our PV system generated 36.5% of the electric energy used by our house in the past year, saving 52.8% of the money we would have spent on electricity.  Further, we received a 7.7% return on our investment, tax free, and it looks like that will go up next year.

Now, details.

Energy production

We bought our PV system from Borrego Solar last spring, while we were replacing our leaky roof.  The main components were 18 PV Modules from Sanyo (about 188 Watts each), and one Xantrex power inverter (for converting DC power from the panels to AC power for the house).  The installation went smoothly, and the system has operated without a hitch for the past year.

My calculation of our savings is based on several inputs.  It’s possible to find the amount of energy supplied by PG&E (that’s on our meter, and on our bill every month).  It’s possible to find the total energy supplied by our PV system (the cumulative energy produced to date is available from the LCD on our inverter).  So the amount and percentage of energy supplied by the PV system is straightforward:

9,261 kWh supplied by PG&E + 5,323 kWh supplied by our PV system = 14,584 kWh total consumed by our house, so:

5,323 / 14,584 = 36.5%

Monetary Savings

So far, so good.  Calculating the monetary savings is quite a bit more complex, since the good folks at PG&E and the California Public Utilities Commission have created residential rate structures that are as much about social engineering and income redistribution as they are about electricity, but let’s have a look.

We’re on the usual PG&E residential rate, E-1 (which can be read in all its glorious detail here.)  The most important attribute of this rate is that the price per kWh increases with the amount of energy the customer uses each month.  So you pay less for the first few kWh, more for the next few kWh, and so on until you’re paying A LOT more for your last kWh (especially if you have a big house, three kids, a pool, an air conditioner, multiple computers, electric oven, electric dryer, and so on.)  The rates by “block” of energy consumed are:

Total Energy Rates ($ per kWh)

• Baseline Usage $0.11531
• 101% - 130% of Baseline $0.13109
• 131% - 200% of Baseline $0.25974
• 201% - 300% of Baseline $0.37866
• Over 300% of Baseline $0.44098

The “Baseline” amount varies by region, but it’s small relative to our household usage, so without the PV system, we usually end up using at least some energy in that last “Over 300%…” block, where the price is very high. (Indeed, this rate went up during the year, which complicates the analysis a bit, but it’s just more rows in my spreadsheet — no big deal.  But to give you an idea of how wonderful it is to put up with PG&E as our utility, the price of the top block went up from 35.876 cents per kWh to 44.098 cents per kWh this year, an increase of about 23%.  This year alone.)

This rate structure, known as “increasing block rates,” is California’s way of reminding everyone (again) that it’s expensive to live in California.

On the bright side, it’s also a great way to encourage conservation and the installation of alternative energy systems like our PV system.

As mentioned above, the PV system only generates about 36.5% of our total electric energy consumption — but it displaces our most expensive purchases from PG&E.  Since we’ve installed the PV system, we’ve almost never had to buy any “top block” power from PG&E.  By reducing our consumption of the most expensive power to essentially zero, we saved a much higher percentage of the money we would have spent on power — 52.8% to be exact.

Here’s the month-by-month breakdown:

Investment Analysis

But — is this a good investment?  How does putting up a rooftop PV system stack up against other potential investments?

Well — after a substantial rebate from California and a substantial tax deduction from the US, the total cost of our PV system was almost exactly $23,000.  A savings of $1,770 in one year amounts to a simple annual rate of return of 7.7%, tax free (i.e., we’re saving after-tax money).  No tax-free fixed-income securities are paying close to that right now, although certainly a municipal bond is much more liquid than PV panels stuck to my roof.

Personally, other investment decisions I made early in 2008 did not go nearly as well as this one — negative returns were common.  So I am happy with this investment at this time.

There is also good (?) news on the future value of this investment.  As I mentioned, earlier this year the price of top-block power from PG&E increased significantly.  When I plug in the new higher prices for all of the next 12 months, I estimate savings of more than $2000, for a return of about 8.7%.   Further, these systems are becoming increasingly common throughout the Bay Area, so if we ever sell this house, we’ll likely recoup all or most of the original investment ( home appraisers are learning to incorporate the value of PV systems into the value of properties here in California).

Conclusion

Overall, I’m happy — our PV system has worked without a hitch, and has delivered a decent return on investment.

But I could be happier.

Our system is far too sensitive to shade, delivering less than half of rated capacity whenever even 5-10% of the system is in shade.  There should be a simple engineering fix to this problem, and I’ll be investigating over the next few months.

Our system also has an almost useless user interface; the analysis presented above required a ridiculous amount of manual effort on my part to develop.  For example, the only way to look at the performance of our Xantrex power inverter is to go outside and squint at the two-line LCD output, and bang on the side of the box (literally) to display a handful of statistics, the way our caveman ancestors did back in the 1970s when they did their earliest residential solar analsysis.  For trivial cost, any of four vendors could have included all the technology necessary for me to capture real-time system performance data on my computer via my home network, but apparently among PG&E, Borrego, Xantrex, and GE (maker of my not-so-smart meter), nobody bothered to do so.

This interface issue is particularly frustrating, because anyone in the tech industry knows that this actually matters.  If a PV system is a crude slab of silicon that sits on your roof and pumps electrons into your wires, it’s unappealing to many.  If it’s an elegant system integrated with your network and life, it’s far more likely to become mainstream.

So in my humble opinion as an early adopter, solar power has passed a crucial threshold — it has become reasonably cost effective in the most expensive residential markets.  But some simple technical and market innovations could really help it take off.

The video of that conversation is now on Channel9; you can watch it here.

We’re offering developers who watch that video (and even those who don’t) a free copy of the Digipede Network Developer Edition — go to this page to get yours today.

Many thanks to  William and the rest of the Microsoft Evangelists for giving us this opportunity to get the word out about how Digipede and Microsoft work together to make software run faster and scale bigger!

Penny Crosman provided some good news for banks, hedge funds, and other money managers in her article today in Wall Street & Technology — good news for financial developers and IT professionals who need to access more processing power without complex application re-engineering. 

You can read the article for yourself — there are good quotes from AVM CTO Paul Algreen, a longtime Digipede customer – but from my perspective, the gist is this:

• CPUs are getting faster these days almost exclusively through putting more cores on a chip. 
• Hence, when you buy a fancy new server, performance only improves for applications that take advantage of multi-core architectures. 
• Yet most applications are single-threaded, leaving all but one core doing, umm, nothing. 
• AVM noticed this problem more than two years ago, and started using the Digipede Network to address it. 
• They’ve adapted compute-intensive legacy applications to run on a grid of multi-core boxes without expensive re-engineering, seeing huge performance gains. 
• Thanks to the intuitive programming model offered by the Digipede Framework SDK, AVM has added more and more applications to the grid since then, and they haven’t looked back.

This is quite typical of the experience many Digipede customers have had — that for most applications in financial services, multi-core and grid computing can be handled most effectively as two cases of the same general distributed computing problem.  

And yes, I’m going to plug our now-famous four-minute video on this topic again — you can watch it here.  Then you can request a free evaluation copy of the Digipede Network, and try it out on your own compute-intensive applications.  Because Intel and AMD aren’t waiting for the world to re-tool a few million enterprise developers; they’re banging out chips with more and more cores with every new generation. 

But with the right tools, you can take advantage of all that power — and that’s a welcome dose of good news for Wall Street!

For our now-classic discussion on a closely-related topic, you can start here.

In the spirit of giving credit where credit is due – kudos to the Microsoft Partner team for improvements to the re-enrollment process AND the stability of partners.microsoft.com.   I recently re-enrolled Digipede as a Microsoft Gold Certified Partner, and the process went without a single hitch this year. 

Clearly, there are still lots of improvements that can be made to the Partner Web site (my suggestions from last year are still relevant), but streamlining the re-enrollment process and improving the stability of the site are much appreciated.  Thank you!

We did a press release today  about the recent sale we made to the US Navy.  You can read that here, so let’s go a little deeper. 

The Navy has access to huge volumes of very accurate geodetic data — information that tells the location and elevation of every point on earth.  (I never knew much about this area until this year, but a lot of decent public information is available.  You can look at this Wikipedia article if you’re interested, and dig around from there.)  Processing geodetic data is a very compute-intensive process.  Combining that information with 2-dimensional image data is even more complex. 

One application for this data is “terrain generation,” a process of converting raw data into a format useful for visualizing terrain in flight simulations.  A group at Lockheed Martin develops specialized software for this purpose; we’ve been working with their TOPSCENE group for some time. 

That group approached us for assistance in increasing the speed of their terrain generation process.  They’ve been great to work with — they’ve put the Digipede Network to work on their problem, and have achieved great results.  Their own press release  about the Digipede-enabled version of their software documents a 20x speedup in processing for our mutual customer at the US Navy.   

We’re excited about this application, for a variety of reasons.

First, Lockheed Martin is the largest independent software vendor (ISV) we’ve worked with, and they’ve validated our premise that ISVs would find the Digipede Network (and particularly the Digipede Framework SDK) the best choice for grid-enabling complex applications.  This is an important point for us.  ISVs can work with other vendors, or build their own application-specific distributed computing solution, and Lockheed Martin certainly has the resources to pursue either path — but they chose Digipede, and have achieved great results. 

Second, we see many, many more applications in processing geodetic data.  We’ve already made other sales in that area to government agencies outside of defense (no announcements yet, but stay tuned!), and we see increasing interest from commercial customers in this area as well.   

Finally, as many financial customers struggle with market issues (some of our clients from 2007 no longer exist in recognizable form), it’s important that Digipede diversify and demonstrate growth in other markets.  Customers like the US Navy certainly help with this important goal.  While government purchases can be  slow, we’ve been quietly working this area for years, and it’s great to see results we can discuss. 

All I can say is — wow.  The Microsoft transition from cloud-absent to cloud-giant has begun.  There have been hints and leaks and guesses for quite some time now, but the announcements today have begun tying all the pieces together and clarifying the overall strategy.  The best news — it’s clear that Azure is aimed squarely at .NET developers, and that the services provided are amazingly rich. There’s lots of work to do in explaining this multi-faceted new platform to the market, but Microsoft is off to a great start.

I’m not at PDC, but Digipede CTO Robert Anderson is; his more-thoughtful take on today’s PDC announcements is here.

More to come…

This month, we are all learning (often to our dismay) just how connected our financial well-being is to decisions made by far-off strangers.  We can see now that poor decisions in New York and London can lead to financial pain around the world – and in our local communities.

But fortunately, the opposite is also true – a few good decisions locally can lead to great benefits around the world.

Early this year I heard about an organization called Kiva, which helps to organize loans for small businesses in developing countries – a practice known as “microlending,” part of the growing area of “microfinance.”  What interested me about Kiva was its funding source – individuals, recruited through its Web site.  I checked it out – and was soon lending money to store owners in Tanzania and farmers in Peru, a few dollars at a time.  I recently made my 100th loan on Kiva – many of which have already been repaid in full, and none of which have defaulted to date.

Through a combination of their growing army of individual lenders and their association with local microfinance organizations, Kiva has opened up a new way for entrepreneurs in developing countries to access the capital they need to grow their small businesses.  And those connections start here – I’ve seen other lenders on Kiva.org from my own home town of Lafayette, and from other nearby communities.

I really like what Kiva is doing – but more than that, I also really appreciate the fact that many, many organizations throughout the world are not waiting for a government bailout, are not intimidated by the scope of the problems they face, but instead are bringing innovative solutions to every corner of the globe.  As a result, while we may be connected to AIG and Lehman Brothers in ways not of our own choosing, we can also choose to connect to a store owner in Tanzania or a farmer in Peru.

I, CEO of a Microsoft Gold Certified Partner, do hereby proclaim my opinion, based on firsthand experience, that Microsoft AdCenter is entirely without value to our company, inferior in every measurable way to competing offerings from Google and even Yahoo, and a time-and-money sink of unusual scope, even for Microsoft.

I ran the campaigns myself, took advantage of consulting and optimization offers, tweaked and twiddled the knobs and dials on all three platforms, spent money on all three platforms, and Microsoft is — third.  Distant third.

I posted about AdCenter more than two years ago, and the improvements since that time have been numerous — and meaningless, from the perspective of actual business performance.  I’ve heard Gates and Ballmer and others brag about newer and better algorithms for their advertising platform more times than I can count, and I’ve seen no improvement in clickthrus from prospective customers.

Microsoft’s search engine is fine — it’s come a long way in the last few years, and is now nearly as good as Google in most ways.   But something is desperately wrong with (a) the ad placement algorithms or (b) the way those ads are displayed or (c) the audience that uses Live Search or (d) all of the above, because the right people click through to us from ads placed by Google, and they don’t from ads placed by Microsoft.

Of additional concern is the apparently defective billing mechanism, which (in my experience) continued to bill my account after all campaigns have been paused.  (OK, possibly I screwed up in some way using the less-than-intuitive AdCenter interface, which I find clumsier than its competitors, and somehow missed pausing something — although I doubt it.)  Last week I finished working through this last minor billing issue with a very helpful and friendly Microsoft representative (I’m screwed, but only out of about $80 — nothing compared to the losses from legitimate bills), and have shut down our account.

Anyone from Microsoft is free to call me about our experience with your online advertising service — I’m at 510-834-3645 ext. 101 — just so long as the call does not present me with new opportunities to use this offering.  We’re done with it.