Rifling through the error.log, I found these events clustering and generally taking the form:

[Mon Jan 19 23:15:08 2009] [error] [client 24.6.13.227]
  (12)Cannot allocate memory: couldn't create child process: 12: php5.cgi
[Mon Jan 19 23:15:08 2009] [error] [client 24.6.13.227]
  (12)Cannot allocate memory: couldn't spawn child process: /dh/cgi-system/php5.cgi
[Mon Jan 19 23:15:08 2009] [error] [client 24.6.13.227]
  (12)Cannot allocate memory: couldn't create child process: 12: php5.cgi
[Mon Jan 19 23:15:08 2009] [error] [client 24.6.13.227]
  (12)Cannot allocate memory: couldn't spawn child process: /dh/cgi-system/php5.cgi
[Mon Jan 19 23:15:21 2009] [error] [client 24.6.13.227]
  Premature end of script headers: php5.cgi
[Mon Jan 19 23:15:21 2009] [error] [client 24.6.13.227]
  Premature end of script headers: php5.cgi
[Mon Jan 19 23:15:48 2009] [error] [client 24.6.13.227]
  Premature end of script headers: php5.cgi
[Mon Jan 19 23:15:48 2009] [error] [client 24.6.13.227]
  Premature end of script headers: php5.cgi

… thus leading to the 500 errors on the client.

I dutifully emailed support.  I noticed this announcement from around the same time I started debugging, however it didn’t mention my specific Private Server.  I got a response from support from Liz advising me that:

I usually see that error when there is a WordPress plugin not playing nicely with PHP. Since you should be able to get into the admin panel for the WP install (http://xxxxxxxxxx/wp-login.php, where “xxxxxxxxxx” is the domain name of each domain running WP), I would recommend going in and turning off your plugins, and then turning them back on one by one until you hit the one that breaks your site, and then seeing if it needs to be updated.

This seemed plausible since I had recently made extensive renovations to one of my sites.  I spent hours ripping apart and tearing down changes I had made, baselining the offending blog.  This yielded no improvement.  I then downgraded PHP, turned off memory-intensive cacheing operations and similar gadgets, and executed a couple of reboots.  I sent several replies to the Support email (which, stupidly, spawns new tickets rather than amending old ones) and ever since have not received a response.

Similarly, updates to the Dreamhost Status blog have ceased.  It’s as though no one works there anymore.

The problem is always the same.  My PS is good for a half hour or so after a reboot and then starts throwing errors like above, ultimately failing completely.  Then I did some googling and I realized that I am not alone.

Specifically, the comments @ Dreamhost Status and Twitter are revealing that this is common and that there is presently a major outage.  Disastrously, Dreamhost are not talking to anyone about it.  No updates to their  status blog, no email responses from Customer Support.  Just a wild goose chase which wasted hours of my evening and morning debugging something that is essentially their issue.

This also seems to have revealed that Dreamhost has a standard practise of nuking processes, via script, at random when their virtual hosting architecture becomes stressed.  That would certainly explain why my web site, which served only 28 people today, is maxing out and failing to allocate memory to new processes at an already more-than-adequate 150MB of memory service package with VPS.

I also discovered that Dreamhost vastly over-reports memory usage via its VPS control panel, which would encourage the unwise to make radical upgrades to their service accounts in order to try to address problems like mine, wasting their money:

… this does not reconcile with the Unix top command which reveals nothing extraordinary happening on my virtual private server:

If you see similar stats, don’t upgrade your VPS account — it’s a scam.  Dreamhost is trying to bully you into upgrading your service.

Anyway, as of this posting I have rebooted my VPS 7 times in the past 24 hours, and had to do it again just in order to submit this entry.  Not that any of you will be able to read it until I am finished moving to a new host, anyway..

So here are the five deadly sins I think we’ve caught Dreamhost in today:

1. Misreporting a service-wide fault as a localized (and neutralized) problem
2. Misleading customers via support instructing them to debug when clearly the situation is 1)
3. Misleading customers via so-called “management” tools that report extremely inflated resource consumption statistics in order to upsell them
4. Allowing such problems as 1) to carry on for 24+ hours without a useful update or resolution advice
5. Sucking.  hard.

So… bye guys.  Enjoy the chargebacks!

UPDATE:  see the exciting sequel to this story — Dreamhost Customer Service FAIL.

I decided once and for all to solve my backup problems. Any backup strategy that I would employ, fundamentally, would have to adapt to the fact that I am lazy and that I am a data packrat. Here’s what I did, and this will work for anyone with OS X or linux, half an hour, and a unix host somewhere that has RSYNC installed properly.

First, I created a dedicated backup account on my DreamHost box (“username”) and gave it shell/ssh access. DreamHost is one of the few services that gives you SSH and Web hosting on a non-dedicated box in my limited searching, but more importantly their basic package gives you 200GB of free storage, which blows away pricing from any of the dedicated OS X backup companies. To create the key and place it on the server I did the following:

From the Command Line (on my machine):

ssh-keygen -d
# hit enter three times and replace “hostname” with your own
ssh username@hostname.dreamhost.com ‘test -d .ssh || mkdir -m 0700 .ssh ; cat >> .ssh/authorized_keys && chmod 0600 .ssh/*’ < ~/.ssh/id_dsa.pub # enter your login password That sets up key-based authentication so that when sshing to the host in the future, it won't need my password. I then created a script on my local machine to back up the folders using rsync, one line per folder to backup. I find rsync extraordinarily complex to do actual syncing but when it comes to just pumping data out the back door on a regular basis, it's super-duper easy. Back to the command line and enter the following: mkdir ~/Scripts # makes a Scripts folder in your home directory cat > ~/Scripts/sync-all
rsync -a ~/Documents username@hostname.dreamhost.com:~/Backup/
rsync -a ~/Library username@hostname.dreamhost.com:~/Backup/
rsync -a ~/Projects username@hostname.dreamhost.com:~/Backup/
rsync -a ~/Movies username@hostname.dreamhost.com:~/Backup/
rsync -a ~/Music username@hostname.dreamhost.com:~/Backup/
^D # (that’s a control-D) … now you’ve created a script file that backs up those folders

chmod a+x ~/Scripts/sync-all
# fixes the permissions on the file

… later I wanted to get fancier and wrote a script that also recorded the time and logged each backup … just replace the content of your simpler script file (above) with this using any text editor:

date > ~/Scripts/sync-all.log
rsync -av ~/Documents username@hostname.dreamhost.com:~/Backup/ >> ~/Scripts/sync-all.log
rsync -av ~/Library username@hostname.dreamhost.com:~/Backup/ >> ~/Scripts/sync-all.log
rsync -av ~/Projects username@hostname.dreamhost.com:~/Backup/ >> ~/Scripts/sync-all.log
rsync -av ~/Pictures username@hostname.dreamhost.com:~/Backup/ >> ~/Scripts/sync-all.log
rsync -av /Applications username@hostname.dreamhost.com:~/Backup/ >> ~/Scripts/sync-all.log
rsync -av ~/Incoming username@hostname.dreamhost.com:~/Backup/ >> ~/Scripts/sync-all.log
rsync -av ~/Scripts username@hostname.dreamhost.com:~/Backup/ >> ~/Scripts/sync-all.log
date >> ~/Scripts/sync-all.log

I then downloaded and installed LingOn, which lets you schedule and manage the rsync process via a GUI:

Here are some screenshots of the config process (this will rsync my Documents folder up to my Dreamhost acct every 10hrs, and do it as low priority so it doesn’t impact other things) but you can season to taste.

Enjoy! Hope this is useful. Thanks to Gersham for kicking this off.

-Ian.

-Ian.

——– http://www.asteriskpbx.com/

What is Asterisk?

Asterisk is a complete PBX in software. It runs on Linux and provides all of the features you would expect from a PBX and more. Asterisk does voice over IP in three protocols, and can interoperate with almost all standards-based telephony equipment using comparitively inexpensive hardware.

Asterisk provides Voicemail services with Directory, Call Conferencing, Interactive Voice Response, Call Queing. It has support for three-way calling, caller ID services, ADSI, SIP and H.323 (as both client and gateway). Check the ‘Features section for a more complete list.

Asterisk needs no additional hardware for Voice over IP. For interconnection with digital and analog telephony equipment, Asterisk supports a number of hardware devices, most notably all of the hardware manufactured by Asterisk’s sponsors, Digium. Digium has single and quad span T1 and E1 interfaces for interconnection to PRI lines and channel banks. In addition, an analog FXO card is available, and more analog interfaces are in the works.

Also supported are the Internet Line Jack and Internet Phone Jack products from Quicknet.

Asterisk supports a wide range of TDM protocols for the handling and transmission of voice over traditional telephony interfaces. Asterisk supports US and European standard signalling types used in standard business phone systems, allowing it to bridge between next generation voice-data integrated networks and existing infrastucture. Asterisk not only supports traditional phone equipment, it enhances them with additional capabilities.

Using the IAX Voice over IP protocol, Asterisk merges voice and data traffic seemlessly across disparate networks. While using Packet Voice, it is possible to send data such as URL information and images in-line with voice traffic, allowing advanced integration of information.

Asterisk provides a central switching core, with four APIs for modular loading of telephony applications, hardware interfaces, file format handling, and codecs. It allows for transparent switching between between all supported interfaces, allowing it to tie together a diverse mixture of telephony systems into a single switching network.

Asterisk is primarily developed on GNU/Linux for x/86. It is known to compile and run on GNU/Linux for PPC. Other platforms and standards based UNIX-like operating systems should be reasonably easy to port for anyone with the time and requisite skill to do so. Asterisk is available in the testing and unstable debian archives, maintained thanks to Mark Purcell.

Who made this?

Asterisk was originally written by Mark Spencer of Linux Support Services, Inc. Code has been contributed from Open Source coders around the world, and testing and bug-patches from the community have provided invaluable aid to the development of this software.

And, obviously, that’s just what MSFT is. Their market position gives them the luxury to both embrace you and marginalize you, which is exactly what happened to Pivotal. Their focus on developing exclusively with Microsoft tools using Microsoft platforms placed them in a poor market position when confronting very large enterprises, service providers, et al who typically like the feel of more robust unix-based solutions. And since the growth in the Windows NT/2000 marketplace was largely occurring in SMBs, who remain unconvinced of the value of CRM given its high cost, they were fighting an uphill battle from the start.

While Pivotal aligned around MSFT and waited for the sales to roll in, rivals like Siebel went out and grabbed market share by interoperating on a fairly non-exclusive basis with every Operating System. They were larger companies with existing revenues who were better funded, and they could afford to sustain multi-platform development teams.

For a brief time, though, Microsoft appeared to be gaining ground in the Large Enterprise space, with more and more organizations jumping on the NT bandwagon. This bode well for Pivotal, as a rapid shift away from proprietary hardware and UNIX-based Operating Systems to Microsoft effectively negated the advantages realized by the larger firms.

But then the boom economy collapsed. CIOs stared looking at the bottom line and what were they spending the most on? Microsoft licenses. Now witness the rise, once again, on UNIX; this time in the form of LINUX operating on cheap Intel hardware. While not yet a sea change in corporate America, it is an emerging trend, especially in Europe.

Pivotal is on the rocks because they took a conservative bet that was, given their funding envelope, the right one for its time. They could have and should have executed on a new plan which gave them an alternative beyond acquisition by Microsoft. Now, faced with a rumoured 40% layoff, it’s going to be difficult to dig out of that hole.

-Ian.

—– http://www.eweek.com/article2/0,3959,644208,00.asp

October 22, 2002 Microsoft, Siebel Ink .Net Pact By Dennis Callaghan

Microsoft Corp. and Siebel Systems Inc. finally announced their long-awaited partnership Monday, committing the two companies to joint development and marketing agreements.

As expected, Siebel will increase its commitment to Microsoft’s .Net platform and use Microsoft’s Visual Studio.Net as its primary application development tool. Siebel applications will be optimized for .Net, and new versions of Siebel will be delivered in conjunction with new releases of .Net, officials of the two companies said.

In addition, joint development efforts will be undertaken to improve performance, scalability and reliability of Siebel apps running on .Net.

As previously reported by eWEEK, the alliance also calls for Microsoft’s BizTalk application integration server to support Siebel’s Universal Application Network for business process integration among disparate applications.

Siebel’s embrace of .Net will also enhance the interactivity of the Siebel Smart Client introduced in the browser-based version 7 of Siebel’s applications, Siebel officials said. .Net support will also improve integration with Microsoft Office applications and support deployment of Siebel apps on mobile devices, officials said.

In addition, Siebel applications will be optimized for Windows Server operating systems, Microsoft SQL Server and the Microsoft .Net Framework, officials said.

The deal also includes joint sales, marketing and customer support activities.

Siebel’s increased support for .Net would not inhibit its Java support, insisted Ed Abbo, vice president of technology at Siebel.

“Our customers are demanding support for both J2EE and .Net so we’ll interoperate with both stacks,” he said.

A Microsoft official said the Redmond, Wash., company would continue to develop its own CRM applications, which are not affected by the deal with Siebel.

———–

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———–

FOR RELEASE MONDAY JUNE 17, 2002

Transaction Expands Proxim’s Leadership Position in Wireless Networking Infrastructure Warburg Pincus and Broadview Capital to Invest in Proxim in Support of the Acquisition Sale Will Allow Agere To Sharpen Strategic Focus On 802.11/Wi-Fiâ„¢ Components SUNNYVALE, Calif. and ALLENTOWN, Pa. – June 17, 2002–Proxim Corporation (Nasdaq: PROX), a leading manufacturer of wireless networking equipment, and Agere Systems (NYSE: AGR.A, AGR.B), the world leader in communications components, today announced that Proxim has agreed to acquire the 802.11 wireless local area network (LAN) equipment business of Agere Systems, including its ORiNOCO product line, for $65 million in cash.

With the addition of ORiNOCO, Proxim will be the premier wireless equipment company with leadership positions in 802.11 enterprise LAN, public wireless access, distributed broadband and carrier-grade wireless backhaul systems markets. Under the agreement, Proxim will acquire assets primarily used by Agere in its wireless LAN equipment business, including a broad offering of wireless LAN products used in homes, small offices, enterprises, service providers and outdoor environments. Agere will retain its 802.11/Wi-Fi chips, modules, and cards business, representing the majority of Agere’s total Wi-Fi business. The sale will allow Agere to sharpen its focus on providing Wi-Fi component solutions for the emerging wireless computing, networking and entertainment markets.

“This transaction provides the scale, scope and depth that will allow us to continue our consolidation of the wireless infrastructure business, and to fulfill our vision of integrated wireless connectivity from the core network to devices in a home, office or public space,” said Jonathan Zakin, Proxim Corporation Chairman and Chief Executive Officer. “Upon closing of this transaction, we will provide investors with the broadest wireless pure play in the industry.”

The transaction enables the company to immediately realize revenues from the world’s largest installed user base of 802.11b infrastructure, which can in turn be upgraded to 802.11a technology over time. It also allows Proxim to accelerate revenues in the wireless WAN business by two quarters or more with a complete product line for the low-end bridging and last mile access markets. As a result, the company expects the transaction to be accretive in the first full operating quarter following the close. Agere and Proxim anticipate closing the transaction within 60 days, subject to regulatory approval and other customary closing conditions.

“In terms of positioning, customer base, technology portfolio and talent, this acquisition brings Proxim to the forefront of the wireless networking infrastructure businesses,” said David King, Proxim Corporation President and Chief Operating Officer. “With ORiNOCO, we obtain market leadership in 802.11b Wi-Fi enterprise network equipment, which complements Proxim’s leadership position in 802.11a WLAN solutions. In addition, ORiNOCO gives us a blue-chip strategic alliance portfolio as well as industry leadership in the growing WLAN public access “hot spot’ market.”

Agere and Proxim have also agreed to enter into a three-year strategic supply agreement under which Agere will provide chips, modules and cards to Proxim, a license agreement for Agere technology used in the ORiNOCO business and a broad patent cross-license agreement for their respective patent portfolios including settlement of the pending patent-related litigation between the two companies. Agere’s new strategic supply agreement with Proxim represents a new engagement with a leading wireless LAN equipment provider.

Agere developed key technology that led to the evolution of 802.11, and today is the leading provider of wireless data solutions to all of the world’s major PC makers. The company will continue to provide wireless data chips, modules and cards for this market segment. Going forward, Agere intends to deliver Wi-Fi components that will help reduce costs for customers so that they can deploy this technology in a wide range of high-volume computing, networking and entertainment markets.

“The sale will allow us to strengthen our relationships with key customers and sharpen our strategic focus on our core Wi-Fi chip business,” said Ron Black, executive vice president of Agere’s Client Systems Group. “Our Wi-Fi components are fundamental to meeting the growing demand for increased wireless data connectivity. Today’s action is a solid step forward in realizing our vision for ubiquitous, wireless broadband access at home, at work, and on the go.”

Warburg Pincus and Broadview Capital Partners To Invest in Proxim Warburg

Pincus and Broadview Capital Partners have agreed to collectively invest $75 million in Proxim to finance the acquisition. “We are excited about ProximÆs strategy to build the business and the impact the ORiNOCO acquisition will have upon accelerating the company’s roadmap,” said Larry Bettino, a Warburg Pincus Managing Director. “We support the vision of the Proxim management team and are firm believers in the compelling prospects of the wireless equipment market.”

The two investors will be issued convertible preferred stock in the amount of approximately $41 million, with a conversion price of $3.06 per share. The remaining $34 million of the investment will be in the form of a note that will convert, upon stockholder approval, into additional shares of the convertible preferred stock. Additionally, the investors will be granted warrants to acquire 12,271,345 shares of common stock for $3.06 per share. A portion of the warrants will be conditioned upon receipt of stockholder approval. Upon stockholder approval, the preferred stock and warrants issued to Warburg Pincus and Broadview are expected to represent approximately 28% of Proxim’s outstanding common stock on an as-converted and as-exercised basis.

Within three months of the closing of the transaction, Proxim plans to call a special stockholders’ meeting to approve the conversion of the convertible note and issuance of conditional warrants.

Proxim’s largest stockholder, affiliates of Ripplewood Holdings LLC, and Jonathan Zakin, Proxim’s Chairman and Chief Executive Officer, have agreed to vote their shares of common stock in favor of these proposals at the special stockholders’ meeting. They currently have the power to vote approximately 32% of Proxim’s outstanding common stock.

Broadview International LLC served as financial advisor to Proxim in its negotiations with Agere. Credit Suisse First Boston Corporation served as financial advisor to Proxim in its negotiations to secure the acquisition financing. JP Morgan served as financial advisor to Agere.

Conference Call/Webcast Information

Proxim Corporation and Agere Systems will each host teleconferences today to discuss the sale. Proxim’s teleconference will be available live and via replay through Proxim’s Web site at www.proxim.com. Agere’s teleconference will be available live and via replay through Agere’s Web site at www.agere.com. The minimum requirements to listen include sound capabilities on your personal computer and installation of RealPlayer software available at no cost for Windows 95/98, Windows 3.1, Windows NT, Macintosh, and UNIX systems from Real Audio, www.real.com.

Conference Call Information for Proxim Corporation

Today’s call begins at 8:30 am EDT/5:30 am PDT

Dial-In Information:

To listen to the conference call via telephone, dial 913-981-4910 at least five minutes prior to the scheduled start time.

Additionally, the conference call will be available on a recorded telephone archive by calling toll free 888-203-1112 and entering pass code 747653, beginning Monday, June 17, 2002 at Noon, EDT until 8:00 PM EDT on Thursday, June 20, 2002. For international callers, the recorded telephone archive is available by calling the following toll number: 719-457-0820 and entering pass code 747653.

———–

🙂

-Ian.

——– http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/12/19/BU44717.DTL

COMMUNAL BROADBRAND Neighbors sharing high-speed Internet access via wireless networks is popular and controversial Matthew Yi, Chronicle Staff Writer Wednesday, December 19, 2001 ©2002 San Francisco Chronicle

Sean Berry shares his broadband Internet connection with three neighbors – – including one across the street — but doesn’t have any wires running out of his windows or doors.

And in return, his neighbors sometimes pitch in to help pay the monthly $80 DSL service fee.

“There’s no formal money that changes hands. I’m not looking to make any money on it, but they do chip in every once in a while,” said Berry, a 27-year- old Unix systems engineer who lives in a one-bedroom apartment in Menlo Park. “It’s about the same rate as people chipping in for pizza.”

With the cost of rigging local-area, high-speed wireless networks plunging during the past couple of years, some tech-savvy Bay Area neighbors are finding economies in sharing broadband Internet service.

The movement is rubbing at least one broadband service provider the wrong way.

“We view it the same way as cable theft . . . and that’s against a variety of state and federal laws,” said Andrew Johnson, spokesman for AT&T Broadband, which provides cable modem service to 1.4 million customers across the nation.

The cable company even conducts flyovers in selected areas twice a year looking for any unauthorized “leakages” of cable TV and broadband signals, he said. When found, AT&T said it simply disconnects the customer.

While there may be some who splice and split broadband connections illegally, there are plenty of ways to share bandwidth legally, users say.

And many are finding online groups such as the Bay Area Wireless User Group to swap ideas on how to do it.

The user group, which began a year ago, now has about 1,200 people in its digital ranks. The list of techies who publicize their own wireless networks on the group’s Web site for others to use for free has grown from just a few to more than 20 in a year.

“And that’s just the tip of the iceberg,” said Tim Pozar, co-founder of the user group. He shares his wireless network and DSL connection with his next- door neighbor and a friend two blocks away, using a directional antenna atop his three-story Sunset District home in San Francisco.

The technology that enables this sharing is 802.11, also known as Wi-Fi, which can be found in such consumer products as Apple’s AirPort, Lucent’s Orinoco and Intel’s AnyPoint II Wireless Home Networking Kit.

With a range of little more than 100 feet, the gear is designed to help users wirelessly connect their broadband-linked desktop computer to laptops, PDAs or other peripherals such as printers and scanners.

But if you attach an external antenna, the range can easily go beyond just a couple of hundred feet.

And more importantly, the cost of setting up such networks has dropped substantially, from more than $2,000 two years ago to about $300 to $400 or even lower, depending on the latest closeout sales.

The network typically has one access point device tethered to a desktop computer and uses radio signals to communicate with other computers or devices.

That’s what Berry has done. Using an external antenna to increase the range,

his next-door neighbors, friends who live a floor below and other friends across the street can all tap into his network and the Internet.

“It’s wonderful stuff,” Berry said. “I work in the tech industry, so it’s fun to play with this stuff at home.”

Others have taken ideas off the Internet, such as using a Pringles potato chip can to build a directional antenna with a range that extends for miles.

“Hey, it cost me $6 (for parts) and it works,” said Sameer Verma, assistant processor of information systems at San Francisco State University.

Raines Cohen and 19 other neighbors in their downtown Oakland condo building each pay $4 for their DSL connection by sharing a single $80 DSL line using a combination of traditional Ethernet connections — which the building developer installed before the residents moved in — plus a wireless network.

“It is a backdoor way of saving money,” said Cohen, a 35-year-old software consultant. “All our neighbors (which include nurses, teachers, retirees and architects) now have computers at home and several have laptops using the wireless connection.”

While cable modem carriers such as AT&T may have stringent rules about sharing bandwidth outside the customer’s home, some DSL providers are lax about the issue.

“We don’t think it’s good policy to open up your line to people you’re not responsible for, but it’s not an expressly forbidden policy,” said Hunter Middleton, Covad’s group manager of consumer product marketing.

He said customers need to know there are potential liabilities, such as unauthorized users downloading illegal material like child pornography, and that sharing bandwidth with others may slow the connection speed.

“It seems like a lot of effort for a service that’s fairly low priced,” Middleton said, noting that DSL services can be had for as little as $50 per month.

Pacific Bell also doesn’t specifically forbid the practice, but does discourage customers from doing it, said Shawn Dainas, spokesman for SBC Communications, the utility’s parent company.

“It’s not in the policy, but that’s not the intended use,” he said.

Dave Solomon, systems administrator at an East Bay Internet service provider, Idiom.com, said his company doesn’t mind customers sharing connections.

“The angle most smaller ISPs will take is that this will make our customers happier, and happy customers are what we’re looking for,” he said.

But security is something users need to be aware of because the current encryption standard on Wi-Fi networks — known as Wired Equivalent Privacy, or WEP — has been broken, said Tony Bautts, a security design consultant who currently works for Wells Fargo Bank.

The bottom line is that hacking into a wireless network is “really, really easy,” he said.

An 802.11 industry group plans to announce a fix to the WEP security problems in existing units next month, while continuing to work for a more complete solution in future products.

For now, though, not only can hackers tap into the wireless network bandwidth, they can also look through files in your hard drive — a dangerous proposition, especially if the user keeps such information as bank account and credit card numbers on the computer. There are ways to keep people out of the computer files — such as instructing your OS to not share files — but these are precautionary steps wireless network users must actively pursue, Bautts said.

Despite these possible pitfalls, the benefits do outweigh the downsides, especially if proper precautions are taken, users say.

“You don’t trip over Ethernet cords, I take my laptop to the kitchen to look up recipes, take it outside when the weather’s nice . . . and I have social contact with others using the network,” Berry said.

E-mail Matthew Yi at myi [at] sfchronicle [dot] com.

It’s unlikely that the Ncompass folks are all going to be millionaires as a result of this. While $36M is a fair valuation (actually, more than fair at 8x revenues) this smells like a bailout to me. Microsoft likely didn’t want to see a potentially valuable hedge against UNIX web development tools circle the drain, so they did what they had to do.

In fact, a substantial majority of Ncompass revenues probably came from Microsoft, which has licensed some ActiveX technology (32K of code) since Ncompass’ inception. The bridge loan mentioned in the article was due and Ncompass probably couldn’t pay it, which spawned the acquisition.

I would estimate that Ncompass has raised and burned on the order of $15M-20M USD, which would mean that investor return was only 2x. Not bad, but certainly not the high-flying IPO that Gerri sold all of her worker bees on.

Welcome to the New New Economy..

-Ian. 🙂

—— The following article is from The Vancouver Sun newspaper in Vancouver BC, one of Canada’s most respected dailies. Its website is at http://www.vancouversun.com.

Microsoft buys Vancouver’s NCompass Labs for $55 million

Microsoft official couldn’t say if employees will be transferred

William Boei Vancouver Sun

Gerri Sinclair, hanging around in her Gastown neighbourhood, is the founder, president and CEO of NCompass Labs Inc. Sinclair says the $55-million sale to Microsoft is “the best decision we’ve ever made.”

Gastown software-maker NCompass Labs is being bought by Microsoft Corp. for about $55 million.

A Microsoft official could not say Monday whether privately owned NCompass, 130 of whose 160 employees work in Vancouver, will stay here or be moved to Redmond, Wash.

Before last spring’s collapse of equity markets for high-tech companies, NCompass founder, president and CEO Gerri Sinclair had talked about taking the Simon Fraser University spin-off company public soon.

On Monday, she said the sale to Microsoft was “the best decision that we’ve ever made.”

NCompass makes Web-content management software, and Microsoft lead product manager Barry Goff said his company’s customers had been demanding such a product.

“This is really a necessary solution for Microsoft to deliver in order for us to have a complete, comprehensive platform,” Goff said in an interview.

“So we went out and looked at all the Web-content management solutions in the marketplace, and NCompass seemed to be the best fit for Microsoft.” Microsoft and NCompass announced no details of the transaction, but Goff confirmed a report by the Canada Stockwatch investment-news service that the purchase price was $36 million US or $55 million Cdn.

Stockwatch, which published its report before the announcement was made, cited court documents showing NCompass received a $1.36 million US bridge loan from Microsoft in February, and that the loan was due Monday.

The report said Microsoft had been showing interest in NCompass since last September, discussed a strategic alliance with it and then got its takeover machinery in high gear in early April.

NCompass reported a loss of $7.5 million US on revenue of $4.9 million last year, Stockwatch said, and had accumulated a deficit of $16 million US. It said NCompass faced “a cash squeeze” by the end of April.

Goff said NCompass will be folded into Microsoft.

“It will be integrated in terms of the technology, as will the people,” he said. “We have a family of server products referred to as the .NET [dot-net] enterprise servers. … NCompass’ primary offering, which is called NCompass Resolution, will become another dot-net enterprise server.”

Asked whether the employees will stay in Vancouver or move south, Goff said: “It’s too early to go into detail regarding the specifics of the transaction. Eventually we’ll figure that out. It’s not clear at this time.” Sinclair said her co-founders, chief programmer Kristof Roomp and technology director Kerem Karatal, have accepted positions with Microsoft.

“In the short term, I’m going to be working to help the transition of NCompass over to Microsoft ownership,” she said.

Asked about the long term, Sinclair said: “Right now, I’m focused on completing the deal and on the transition. Beyond that there are many opportunities, and we’ll have to see where they lead.”

She said Microsoft’s ownership will give NCompass employees the opportunity “to see it join the Microsoft dot-net enterprise server family, and as a result be distributed into a worldwide market into a way that we couldn’t even have contemplated before.”

Sinclair said she was proud of NCompass’ six-year run as a high-profile member of Vancouver’s fast-growing high-tech sector.

“I think this acquisition really confirms that the Vancouver high-tech community can create great companies with products that are able to compete in the global market place,” she said. bboei [at] pacpress.southam [dot] ca