WGHubris on March 18th, 2014

Tesla is a new car company that currently makes only electric cars. That in itself is revolutionary, but the company is looking at completely remaking the entire car selling and buying model, and that is ruffling some feathers setting up a Tesla versus dealerships battle royale.

New Jersey Bans Tesla Direct Sales

The latest news comes thanks to New Jersey’s decision to ban Tesla‘s standard business practice of selling cars directly to customers rather than going through the more traditional car dealer model. As it turns out, selling cars via car dealerships, the way the major automakers do, isn’t so much a strategic business choice made by car manufacturers, but a requirement of state law in many places. Tesla’s business model, however, doesn’t include car dealers, and it is starting to bump into the common scenario of entrenched businesses fighting to prevent newcomers from changing the way of doing things.

tesla-versus-dealersIf you are wondering why a Republican Governor like Chris Christie is suddenly in FAVOR of government regulation after spending an entire career supposedly against it, you have to look no further than the campaign contributions regularly doled out by the dealership associations.  State politicians are so eager to protect their local dealership cash cows that when General Motors was in danger of failing all together, and operating under a special federal government backed bankruptcy protection, states fought to keep even the most unprofitable of dealerships from closing. It’s no wonder, now that Tesla looks like it’s here to stay as more than just a novelty car dealer, that politicians are moving quickly to protect dealers.

Not Just New Jersey

New Jersey is not the only state, or the first state, to prohibit, or severely limit Tesla’s direct sale to customers strategy. So far, Arizona, Maryland, and Virginia have all banned or limited these kinds of sales. In Texas, Tesla has “galleries” that do not allow test drives or discuss pricing because the sales model is illegal there too. In Colorado, the lobbyists got to work faster. Since March 2010, state lawmakers have allowed Tesla to have just one store in the entire state. The dealer lobby in New York and Ohio are pushing for the same thing.

It’s curious how both liberals and conservatives in state government can get behind the dealer associations since there are no competing lobbyists or campaign contributions to be had. Who favors government regulation again? Which one opposes? Or, does the highest bidder win?

Check out this Credit Sesame review to get your credit score before buying a car.

Car Dealers Service

One of the arguments for the dealership model is that it is a “consumer-protection” issue. After all, if Tesla goes out of business, for example, where would its customers get it’s cars serviced?

This may be one of the dumbest arguments ever made. For starters, if Tesla went out of business, its dealerships would be right behind it. Dozens of car makers went out of business over the last three decades, and not one of them still has dealerships operating. Second, this statement ignores the thousands of independent mechanics and auto repair businesses that exist around the country.

According to some news reports, it is the over-priced service element that the dealers are most anxious to defend. When dealers provide warranty service, they get paid by the automobile manufacturer. When the provide non-warranty service, they get paid by the customer, both are very profitable. This isn’t the first time dealers have tried to protect their repair and service business. It wasn’t long ago court action and threatened legislation were required to force manufacturers and dealers to allow independent mechanics access to cars’ computer codes.

Buy Direct Benefits

I’ve often wondered why manufacturers didn’t offer a buy direction option. It turns out there are a few reasons for this. First, dealers don’t like the idea of funding all the infrastructure for people to come take a test drive, and then have that some customer go home to buy direct and cut the dealer out of the commission.

Second, dealerships have to be stocked with cars. Those cars have to be pre-made by the manufacturer. Allowing customers to customize and make their own cars, like Tesla does makes those cars sitting on the lot even harder to sell. Who wants to buy a car with pre-selected colors and options when you can create exactly the car you want.

Finally, car buying is very much an impulse buy business. That is, if you don’t walk off that car lot with a new car that day, chances are you won’t end up buying after all. Many car buyers end up with remorse after buying, but cars are one of the few goods you cannot really return once you’ve purchased them. That’s a reason car dealerships are such high-pressure environments. They know that if you go away to think about it, you might decide you don’t need a new car, and then no sale. If you’ve ever seen your how a new car loan affects your budget, you know why sales need to be struck while you still have stars in your eyes.

Tesla avoids all of these issues with its direct sale model. In all fairness, this model works exactly because Tesla is so new and has comparatively few sales. In order to sell hundreds of thousands of cars, like the big boys, Tesla might also need test drives and high-pressure sales. On the other hand, Tesla is smaller, so it doesn’t need to sell anywhere near as many cars to be profitable.

Car Dealerships Suck

People hate car dealerships, and Tesla knows this.

Need proof?

What does every car dealer commercial in America say?

We aren’t like those OTHER dealerships.

When your own industry markets itself by saying that you are one of the only good ones, it is no wonder that no one is rushing to the defense of car dealers.

But, as long as those lobbyists keep doing their job, states will keep trying to put up roadblocks for anyone that wants to cut in on the profits car dealers make.

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WGHubris on March 13th, 2014

Several years ago I bought a netbook. At the time, there was no iPad, there most certainly was no such thing as a Chromebook. There may have been the first iPhone, although I do not recall for certain.

I liked my netbook. It was underpowered compared to other computers around, and certainly compared to other computers and laptops that I owned. However, it was the smallest and lightest computer I owned. Instead of requiring its own laptop bag (and accompanying power supply), I just slipped it into my regular message bag with my usual documents and notebooks. The idea was that I had a computer for “just in case” there was time or need, or that I had one for a short period of time, usually in between other things. It was also so inexpensive that it was practically disposable. In short, a netbook was a perfect on the go, computer. We used it for years until the power supply finally stopped working.

Microsoft Destroys Netbook Market

Just as the netbook market was gaining its footing, Microsoft killed it, in hopes of saving its reviled Windows Vista operating system. At first, netbooks started by using Linux based operating systems. Customers didn’t like this, so Windows was a logical solution. However, Microsoft’s Windows Vista OS was too big, too slow, and too bloated to run on the limited hardware of cheap, small netbooks. Windows XP worked fine, but Microsoft wanted people to stop buying Windows XP and start buying Windows Vista.

Nothing destroys a company faster than when it focuses on making customers do what the company wants instead of focusing on the company doing what customers want. Instead of allowing customers to buy Windows XP like they wanted and working harder on making Vista better, Microsoft simply ended XP sales. Eventually, however, not even Microsoft could pretend that Vista would run acceptably on a netbook, so they allowed XP to be installed on them. However, they knew that people would rush through that loophole to get what they wanted. Microsoft didn’t want companies making netbooks with XP instead of laptops with Vista, so they set licensing restrictions that crippled the netbook market.

Microsoft decreed that Windows XP could not be installed on anything with more than 2GB of RAM and limited the screen size of netbooks as well. In doing so, Microsoft made it impossible for manufacturers to try and improve and build what a fast moving customer market wanted. Instead, all netbooks were the same, and they weren’t getting any better.

Fast forward a few years, and Apple released the iPad. The iPad did almost everything a netbook did. It browsed the web, it played movies and music, it even had a camera. On top of that, it was just as small and light as a netbook.

The iPad was missing one critical feature: a keyboard. I myself denounced the iPad as unsuitable for writers, compared to a netbook, because there was no physical keyboard. No matter how accurate your digital keyboard is, you can’t touch-type without, well… touch.

The netbook could have been a strong competitor to iPads. Manufacturers could have taken advantage of Apple’s one-size fits all approach just like they do today with cell phones, offering netbooks that were bigger, faster, more powerful, more memory, more hard drive space, and so on. In fact, today larger screens have drawn away once loyal iPhone fans. Larger netbook screens might have done the same, but Microsoft wouldn’t allow it. As a result, netbooks died, and the next generation of portable computing belonged to Apple.

In order to force Vista down user’s throat, the company had cut off its nose, to spite its face, and Apple picked up all of the pieces.

Microsoft Afraid of Chromebooks?

And here, is where the story takes an ironic, or karmic, twist. Years after netbooks disappeared, and years after Windows Vista disappeared, Google released a new, cheap, lightweight, easy to carry, low-power computing device called a Chromebook. A Chromebook is like a netbook in so many ways, except for one very big difference. A Chromebook runs Google Chrome operating system instead of Microsoft Windows. Instead of releasing Chromebook into a mature, robust, netbook market asking why would we use a Chromebook when a netbook already does all of that, customers looking for something that does what an iPad does, but with a keyboard and a lower price tag don’t even remember the word netbook, but they are starting to know the name Chromebook.

chromebook

A recent CNN article suggests that the small, but growing, market of Chromebooks has Microsoft worried. You can bet Google won’t make the same mistake Microsoft did. Instead, you’ll see all manner of innovation, from larger screens to better graphics, to who knows what else. And, it will have a keyboard, and maybe more memory, and more…

In trying to force its failed Windows Vista OS on consumers a decade ago, Microsoft may have written itself out of the future of ultra-portable computing for good. Instead of a crowded marketplace of low cost, low power netbooks, Google found a vacuum, and it is filling it.

 

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WGHubris on January 21st, 2014

Recent news reports suggest that Sprint is looking into the possibility of buying out rival wireless carrier T-Mobile. On one hand, this is a possibly strategic merger between the number three and number four wireless carriers. Even with the buyout, Sprint would remain the number three carrier beyond the much bigger Verizon and AT&T. On the other hand, this is a desperate move for Sprint whose strategic vision ended up being hopelessly flawed.

Several years ago, Sprint bought out Nextel. The idea then, as it is now, was that two smaller carriers could join forces to compete with the bigger carriers. The only problem is that it didn’t work. Sprint backed the wrong horse in the 4G technology race and wasted valuable time deciding what to do with Nextel’s network and spectrum. By the time it realized that it was leaps and bounds behind the bigger carriers, it was too late.

Now, Sprint has barely begun to roll out 4G coverage in the biggest markets, and there are plenty of markets where it hasn’t deployed any 4G at all. My home town of Denver, Colorado is case in point. Denver is the 23rd biggest city, and the 21st biggest metropolitan area in the US, but Sprint’s 4G coverage is nowhere to be found. The constant drumbeat of “it’s coming, but there are no dates,” has grown old and customers whose contracts come up tend to jump ship.

Why Sprint’s 4G Failure Matters

Just a few years ago, there were plenty of wireless customers who didn’t really care much about 4G coverage. Sure, those who cared about cutting edge technology were already there, but the iPhone didn’t even have 4G until 2012. Today, however, 4G is everywhere, and Sprint’s lack thereof in major metropolitan areas is a growing embarrassment.

The biggest issue is that even non-techies are now very aware that 4G means faster. Sprint’s only real hope for customers buying new phones is inertia. That is, that customers who already have Sprint service will just buy a new Sprint phone without asking about 4G, but even that possibility is fading fast. New services like the NFL’s highly touted “Football on Your Phone” are abysmal, if non-functioning, on Sprint’s slow 3G network. The same is true for any Comcast, HBO, or other video service on Sprint’s network. Once a customer sees those services on other phones, it is only natural for them to assume that there is something “wrong” with their service.

The catch is that you can’t just flip a switch and go 4G. Sprint has to switch out its old equipment to get 4G signals. The worst part is that it is taking down parts of its 3G network to do so. That means that not only to Sprint customers not have 4G, the 3G network they do have is actively getting worse.

All this brings us to Sprint’s desperate bid for T-Mobile. T Mobile has 4G networks in some of the same areas that Sprint is missing them. Ironically, however, they aren’t the same networks or the same equipment meaning that until the merger goes through, and until customers buy new phones, they will just get the same old, same old from Sprint.

How bad is Sprint’s position these days?

Well, I have an employee plan from way back in the day that adds up to approximately one-half the monthly cost of the other carriers for unlimited data and voice. I’ve told my wife that there is no way we are switching. I even bought new Sprint Galaxy 4S phones for both of us last fall, even though I knew Sprint didn’t have 4G in Denver. After all, I figured, the company dies more every day it doesn’t have those speeds, they have to be coming soon, right?

However, if I don’t have 4G in Denver by this Spring, I think I’ll take T-Mobile up on its offer to get me out of my contract and go over to them instead. Of course, I can’t do this if Sprint buys up T-Mobile. Me and the millions thinking the same thing are the reason Sprint needs to buy T-Mobile, and to do it fast. Everyone else has already deserted for ATT or Verizon at this point.

Otherwise, Sprint is headed for life as the low-tier carrier for folks who still just want a flip-phone.

(Or, of course, it could actually start lighting up 4G networks in bigger cities instead of trying to pad its numbers by rolling out dozens of smaller communities every three months in big press releases designed to show that it is moving forward more quickly than it actually is.)

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WGHubris on December 30th, 2013

New light bulbs have arrived and the old versions of 100 watt bulbs and 75 watt bulbs have begun to disappear from store shelves. The new light bulb laws now mean that the old, hot, inefficient 100 watt light bulbs that power old-fashioned Easy Bake Ovens are no longer available. Is the new light bulb law a problem, or will this just be a phase that quickly passes.

Low Flow Toilet Law

Around twenty years ago, in 1992, Congress passed a law mandating that all toilets be low-flow toilets. A low flow toilet can only use 1.6 gallons per flush. The law went into effect a few years later. The implementation and after effects of this law may be instructive in looking toward how the new light bulb law will work out.

old light bulb pictureWhen the ban against higher per flush gallon toilets first went into effect, the reaction was pretty much the same. The opposition to the law insisted that higher gallon per flush toilets were superior for various reasons. In fact, early low flow models did not work as well and were prone to clogging for some people. There were report of some builders hoarding older toilets, and even stories of people bringing in higher flow toilets from Mexico. Critics of the law pointed to these issues as proof that the law was a failure, and insisted that the market should decide. The law was held up as exactly the kind of thing that government should not regulate.

However, over the next few years, things changed. Manufacturers, who could no longer rely on making their toilets work simply by throwing more water down the drain had to actual put some time, money and effort into better designs. This investment would have never been made without the law, in part because the end consumer often does not buy the their toilet directly. Instead, builders, apartment managers, and others buy the toilets without input from the end users. The result is a trend toward the cheapest toilets, offering no incentive for “better” toilets.

The new and improved low-flow toilets saved millions of gallons of water every year. This was particularly helpful in areas like Colorado where droughts followed huge housing booms. Reservoirs that ran near critical low levels would have fared much worse if those decades of construction had included higher water use toilets.

Today, only 1.6 gallon toilets are sold, millions of gallons of water are not wasted, and no one really notices or cares. Certainly, no one brings in old toilets from Mexico.

Old Light Bulb Hoarding and Nostalgia

So, what lessons can we draw from the laws to regulate toilet flushing?

Chances are that the first few years of newer light bulbs will have issues. Manufacturers, now forced to deal with developing better light bulbs that don’t have to compete against the cheapest possible bulbs, will likely improve the technology quickly. Ramping up production to full levels of scale will mean that prices will drop. Soon, the only reason to have older, incandescent bulbs will be nostalgia, or those who claim that the light is “better.”

In other words, don’t panic. By this time next decade, no one will remember or care that Congress banned high watt light bulbs and society will be silently reaping the benefits of a nationwide reduction in the usage of power. But, rest assured that more than a few folks will have horror stories and studies will point to the wasted dollars caused by the new law in the meantime.

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WGHubris on December 19th, 2013

I’m not a Rockefeller, and I don’t have a charitable trust fund, but I do pretty well, and occasionally, I do donate money to various charities. I also donate household items and clothing on a pretty regular basis since I have kids at that age where neither clothes nor toys last all that long. However, I’ve forever changed how I give money, to the detriment of the very charities that wanted me to consider them when giving.

Charity Update Phone Calls Scam

Phone Calls

Who can it be calling on my phone? Ring-ring. It’s that charity; they want more money to pay for more fundraising phone calls.

There are numerous charities that turn used home goods into good works. I like these charities because they serve triple-duty in my good cause book. First, they keep goods that otherwise have no home out of the landfill. I’ve got toys, books, clothes, and so on, and while I can have a garage sale, that isn’t really high on my fun list. Instead of throwing these items out I can donate them. Second, the charities turn sell these goods and use the cash to do useful things for their organization. Some of them even employ disadvantaged members of their communities producing yet another advantage. Third, they resell these items in their stores where people who really need to stretch a dollar can buy them for much cheaper than anywhere else. I like that my donation helps them as well. And, of course, in the end, I get a tax deduction, which is nice for me.

Like many others I get postcards from time to time asking me if I have any household items to donate. They need my donation so much, they are even willing to arrange for a truck to come to me so that I don’t have to bring my donation to them. This is particularly important for the smaller organizations that don’t have many locations, especially if none of them are anywhere near me. All I have to do is make a call, give them the address for the pickup, and my phone number so they can contact me.

Seems legit.

But, it turns out that too many charities are actually finely tuned fundraising machines and that address and phone number are used extensively for both. Several years ago, I had a lot of stuff to donate, so I scheduled pickups with two different organizations that I wanted to support. They picked the stuff up and they left a receipt for the tax deduction.

Everyone was happy.

Then, the phone calls started coming. Each charity called at minimum once per month to ask if I had anything else to donate. When I said no, they launched into what can only be described as a telemarketing pitch. Did I know that now, my donation was more important than ever? Thanks to [insert recent new event here] donations were down and needs were up, was I really, really, really, sure I didn’t have anything? And, if not, maybe I could write a check instead?

I don’t really like getting phone calls at all, least of all sales calls, which no matter how much these organizations say otherwise, are just what these are.

The calls never stopped until the day that we shut-off our land line.

The other day, I got a card, and thought about making a donation, but I remembered the continuous nagging phone calls. I’ll still donate, but it won’t be until I get around to it, and it will be with whatever charity has a location near where I am when I finally load it into my car. That charity, and everyone else who uses that method of raising awareness has lost my donation forever. Is it worth it to squeeze out a few extra pickups?

Even worse than this one is the charity update phone call. This scam works like this. I donated to a local charitable organization. It was a check, no strings attached. I got a call thanking me.

Everyone was happy.

The next month I got a phone call from the charity. They wanted to update me on their progress and explain how my donation was helping.

Seems legit.

For four sentences, I got an update on the organization. Then, I heard those familiar words written by the most reused copywriter in the history of man, “but now, your support is more important than ever.” And, here I was, taking a telemarketers phone call, because I was stupid enough to donate with a check that has my phone number on it. Needless to say, that charity will never get another penny from me.

Charity Thank You and Can We Have Some More

Several years ago, my wife coordinated the giving program at her work. Everyone pitched in and donated a few hundred dollars to Special Olympics. Since they don’t have any sort of permanent giving program, my wife just sent the money in as a single personal check. The charity sent a thank you note and some other things and my wife proudly took them to the office to share with her coworkers. But, every few weeks since then, we get another mailer asking for more money. Of course, our contribution is needed now more than ever. I guess we should have waited then.

By now, I figure that every charitable organization I ever gave money to has spent my entire contribution doing nothing but trying to get me to contribute again. A dozen or so mailers per year, times six or seven years equals something like 80 mailings. Eighty mailings written, produced, printed, folded, and mailed has probably eaten up $100 of the original $300 donation. In the end, we’ll have contributed nothing more than paying for junk mail to be sent to our house.

For other groups, it’s a fully staffed telemarketing center, employees, phone lines, and so on, all to get me to donate more. By now, the entire amount of any donations I made has been spent running that call center.

Where To Donate Without Being Begged for More

I still contribute. I still donate. I just do it differently. These professional money-raising organizations don’t get my money any more. Instead, my children’s schools get regular contributions. I know where the money goes and with the exception of a mention in each week’s email, they never ask for any more. I donate household goods to ARC or Goodwill, the two organizations that had drop off locations that I know of. I hand them over and drive away. No phone number, no contact info. Those guys sending the postcards have ruined it for themselves.

I had my bank stop putting my phone number on my checks a few years ago, for several reasons, and I never fill out that field when donating. If a form won’t work without a phone number, they don’t get my donation. Ever. Some friends just fake-number them. I don’t bother. If their goal is to get a phone number for their call center, I don’t want to give them my money.

This rant is brought to you by the stacks in my garage that I need to donate by December 31st, to get my 2013 tax deduction. I’d love to call some of those organizations and setup a charitable pickup, but it’s not going to happen.

I wonder how many thousands or millions of dollars these organizations lose every year by overly aggressive fundraising?

 

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WGHubris on October 1st, 2013

With the government shutdown, there has been a lot of talk about nonessential government personnel and nonessential government services. In particular, many people are asking if these people and the services they provide are not essential, then what are we wasting money on them for anyway. The answer, lies, as it so often does, in how to choose to define the term nonessential. For the purposes of shutting down the U.S. government, the definition follows along the vague line of services and personnel that affect the health and safety of citizens. That isn’t the only possible definition, of course. And, even using that definition leave a lot of gray area of interpretation.

Nonessential Services

To understand just what makes a government service nonessential, it helps to consider something smaller, your own life, for example.

government servicesTo protect your health and safety, there are some things that you must do without question. Continuing to eat, drink, and sleep is necessary if you are to stay healthy. You do not need to go to the movies to stay healthy and safe.

So far, this is very easy.

However, it gets complicated very quickly. For example, should you still exercise? Exercise does improve your health, and it is safer to be strong and lean. On the other hand, you aren’t going to instantly become less healthy if you stop going to the gym.

What about cleaning your house?

Again, in the beginning, it would be hard to throw that into the essential services category. After all, an unvacuumed carpet is hardly deadly. However, the longer you go without cleaning, the more likely it becomes that the filth building up in your house will attract vermin, grow bacteria or mold, or otherwise begin to affect your health.

This is where the who essential versus nonessential thing breaks down. Many services that the government performs, and the employees who perform them, are not necessarily immediately essential. Just like the many tasks you perform, some of them can be skipped. Others can be put off. But, just because you don’t have to do something immediately, doesn’t mean that you never have to do it again. In other words, things that are nonessential at a specific point in time become very essential over a longer period of time.

It may not be essential to inspect bridges for safety this weekend. However, never inspecting them again would be incompetent. So, does that make the function essential or nonessential? While the passport office being closed for a week or two is just an inconvenience for travelers, never issuing a passport again, means locking every citizen within the borders of the country forever since international travel is not possible without a passport.

So, while it might be an interesting tweet about the size of government, many of the services being deemed nonessential during the shutdown are actually very essential over time. Furthermore, many “extra” services that are provided by the government are provided because we the people demand those services in exchange for the taxes we pay. Just turning them off to save money doesn’t necessarily square up with our desires as a people.

In the end, the question is moot for everyone who is not actually a government worker. The shutdown will end eventually, and both essential and nonessential government services will start back up. The true test of whether something is essential or not comes when we vote based on what we do and do not want.

 

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WGHubris on August 28th, 2013

At the beginning of this year, I renewed my webhosting arrangement with WestHost and immediately regretted it when my server suffered hours of downtime in February. Since then, I’ve “caught” my server down several times. This is particularly distressing because I don’t monitor it constantly, which means it could have been down numerous times when I just didn’t notice.

Unstable WestHost Shared Hosting

There are multiple tiers of webhosting. The cheapest, and therefore least reliable, is called shared hosting. The way it works is that the webhosting company loads up numerous websites onto a single server. Often, these websites are smaller, low-traffic websites, so it really doesn’t matter if there are a lot of them on one server. However, if one of them experiences an issue, it can affect all of the websites hosted on that server. To worst webhosts load up too many websites on a single sever compromising both the speed of these sites and their integrity. A very full server is more likely to be taken down by a spike in traffic or memory usage since it is running close to capacity.

I don’t know if this is WebHost’s problem or not. I really don’t care. What I do care about is that the WebHost Status page always says the same thing. First, the server “became unresponsive and had to be rebooted.” Then, a file integrity check was forced. If you know anything about computers, you know that they don’t like having the plug pulled. They like to be shut down nicely. If they don’t get shut down properly, they will often launch into a file system check that can take an hour or more. That means with every, “Oops, we had to reboot the server,” comes an hour or more of down time. For months, it seemed like this was a surprise to the WestHost engineers who posted estimated fix times to the webhosting status page of 10 or 20 minutes. Then AFTER the file check started, they changed the fix time.

westhost hosting quality

From 08/28/2013

I understand that shared hosting is the cheapest hosting, and I’ll be moving away from it on WestHost, at least, as soon as possible. However, it is inexcusable that a server just has to be rebooted so frequently. Obviously, there is a problem. Either the server is overloaded, or it’s monitoring is substandard. There is no reason a tech shouldn’t be able to notice that a problem is arising on server and make the necessary adjustments, or if there really is nothing that can be done, at least the server can be rebooted cleanly so that there is no need for over an hour of down time to run a system check.

My next move is to check the internet to see if someone monitors this sort of thing. If not, it should be a trivial task to take a screenshot of the WestHost status page every hour. That would catch most of these server reboots since they come with an hour long file integrity check. Maybe if the company knew that someone noticed just how often they had to reboot a sever and keep it down for a file check, they just might do something to keep it from happening so often.

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