MICE is responsible for the on-going support contract costs for the main Arista switch. This was factored into the design of the port fees. We have received quotes from Arista. As is customary, the three-year price is cheaper per year than the one-year price. The savings is non-trivial, especially relative to our annual revenue, so I think it would be wise to purchase the three-year contract. The three-year contract cost is more than our current cash balance. After we collect this year's port fees, we will be able to cover it while keeping a reasonable reserve. However, we need to do something sooner, as it needs to be renewed this month. Fortunately, Arista has offered to let us split the order in two halves to avoid us drawing the bank balance too close to zero. Does the membership have any input they'd like to provide the board in this matter? -- Richard
I think it is worth getting the discount even though it draws the account down quite a bit. Thanks Arista for allowing the split. It is also a nice time to call for any donations. If anyone has been thinking about donating, but was on the fence about when, now would be a great time! -----Original Message----- From: MICE Discuss [mailto:MICE-DISCUSS@LISTS.IPHOUSE.NET] On Behalf Of Richard Laager Sent: Thursday, February 01, 2018 6:52 PM To: MICE-DISCUSS@LISTS.IPHOUSE.NET Subject: [MICE-DISCUSS] Arista Support Contract MICE is responsible for the on-going support contract costs for the main Arista switch. This was factored into the design of the port fees. We have received quotes from Arista. As is customary, the three-year price is cheaper per year than the one-year price. The savings is non-trivial, especially relative to our annual revenue, so I think it would be wise to purchase the three-year contract. The three-year contract cost is more than our current cash balance. After we collect this year's port fees, we will be able to cover it while keeping a reasonable reserve. However, we need to do something sooner, as it needs to be renewed this month. Fortunately, Arista has offered to let us split the order in two halves to avoid us drawing the bank balance too close to zero. Does the membership have any input they'd like to provide the board in this matter? -- Richard
+1 Sent from my iPhone
On Feb 1, 2018, at 19:45, Jeremy Lumby <jlumby@MNVOIP.COM> wrote:
I think it is worth getting the discount even though it draws the account down quite a bit. Thanks Arista for allowing the split. It is also a nice time to call for any donations. If anyone has been thinking about donating, but was on the fence about when, now would be a great time!
-----Original Message----- From: MICE Discuss [mailto:MICE-DISCUSS@LISTS.IPHOUSE.NET] On Behalf Of Richard Laager Sent: Thursday, February 01, 2018 6:52 PM To: MICE-DISCUSS@LISTS.IPHOUSE.NET Subject: [MICE-DISCUSS] Arista Support Contract
MICE is responsible for the on-going support contract costs for the main Arista switch. This was factored into the design of the port fees.
We have received quotes from Arista. As is customary, the three-year price is cheaper per year than the one-year price. The savings is non-trivial, especially relative to our annual revenue, so I think it would be wise to purchase the three-year contract.
The three-year contract cost is more than our current cash balance. After we collect this year's port fees, we will be able to cover it while keeping a reasonable reserve. However, we need to do something sooner, as it needs to be renewed this month. Fortunately, Arista has offered to let us split the order in two halves to avoid us drawing the bank balance too close to zero.
Does the membership have any input they'd like to provide the board in this matter?
-- Richard
On Feb 1, 2018, at 19:45, Jeremy Lumby <jlumby@MNVOIP.COM> wrote:
It is also a nice time to call for any donations.
On donations, free money is obviously great, but we do need to watch the 85% rule now that we are a co-op. If someone is interested in donating, please contact me off-list. Paying your port fees invoice promptly is also helpful here. -- Richard
How about getting a loan to cover the difference? That way we could get the savings and not affect the revenue percentages. On Feb 1, 2018 8:17 PM, "Richard Laager" <rlaager@wiktel.com> wrote:
On Feb 1, 2018, at 19:45, Jeremy Lumby <jlumby@MNVOIP.COM> wrote:
It is also a nice time to call for any donations.
On donations, free money is obviously great, but we do need to watch the 85% rule now that we are a co-op. If someone is interested in donating, please contact me off-list.
Paying your port fees invoice promptly is also helpful here.
-- Richard
Loan from? Reid On Feb 1, 2018 10:35 PM, "Jason Hanke" <jayhanke@neutralpath.net> wrote:
How about getting a loan to cover the difference? That way we could get the savings and not affect the revenue percentages.
On Feb 1, 2018 8:17 PM, "Richard Laager" <rlaager@wiktel.com> wrote:
On Feb 1, 2018, at 19:45, Jeremy Lumby <jlumby@MNVOIP.COM> wrote:
It is also a nice time to call for any donations.
On donations, free money is obviously great, but we do need to watch the 85% rule now that we are a co-op. If someone is interested in donating, please contact me off-list.
Paying your port fees invoice promptly is also helpful here.
-- Richard
------------------------------
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There are these things called credit unions, negotiable trust and savings associations, and occasionally you can even find a savings and loan. There are also many forms of independent lenders and other business oriented lenders. As a co-op, MICE is now a business with revenues, a balance sheet, etc. I’m not advocating a loan, but really, this isn’t a particularly complicated question. Owen On Feb 1, 2018, at 19:39 , Reid Fishler <rfishler@he.net<mailto:rfishler@he.net>> wrote: Loan from? Reid On Feb 1, 2018 10:35 PM, "Jason Hanke" <jayhanke@neutralpath.net<mailto:jayhanke@neutralpath.net>> wrote: How about getting a loan to cover the difference? That way we could get the savings and not affect the revenue percentages. On Feb 1, 2018 8:17 PM, "Richard Laager" <rlaager@wiktel.com<mailto:rlaager@wiktel.com>> wrote:
On Feb 1, 2018, at 19:45, Jeremy Lumby <jlumby@MNVOIP.COM<mailto:jlumby@MNVOIP.COM>> wrote:
It is also a nice time to call for any donations.
On donations, free money is obviously great, but we do need to watch the 85% rule now that we are a co-op. If someone is interested in donating, please contact me off-list. Paying your port fees invoice promptly is also helpful here. -- Richard ________________________________ To unsubscribe from the MICE-DISCUSS list, click the following link: http://lists.iphouse.net/cgi-bin/wa?SUBED1=MICE-DISCUSS&A=1<https://urldefense.proofpoint.com/v2/url?u=http-3A__lists.iphouse.net_cgi-2Dbin_wa-3FSUBED1-3DMICE-2DDISCUSS-26A-3D1&d=DwMFaQ&c=96ZbZZcaMF4w0F4jpN6LZg&r=Q_d8tNiSzoBecM8os8iGQA&m=DJLmuuyQUOR10ZN2nMnJQPtHQFxznhzhGtbXM25PtG8&s=t4H12oNslqV-uYnOvetzQpmZoVMg8nFLJ9dLkK_8bdQ&e=> ________________________________ To unsubscribe from the MICE-DISCUSS list, click the following link: http://lists.iphouse.net/cgi-bin/wa?SUBED1=MICE-DISCUSS&A=1<https://urldefense.proofpoint.com/v2/url?u=http-3A__lists.iphouse.net_cgi-2Dbin_wa-3FSUBED1-3DMICE-2DDISCUSS-26A-3D1&d=DwMFaQ&c=96ZbZZcaMF4w0F4jpN6LZg&r=Q_d8tNiSzoBecM8os8iGQA&m=DJLmuuyQUOR10ZN2nMnJQPtHQFxznhzhGtbXM25PtG8&s=t4H12oNslqV-uYnOvetzQpmZoVMg8nFLJ9dLkK_8bdQ&e=>
How about getting a loan to cover the difference? That way we could get the savings and not affect the revenue percentages. The message of mine you replied to was about the 85% rule, which applies to revenue. That was in the context of donations. We need to ensure
On 02/01/2018 09:35 PM, Jason Hanke wrote: that, each year, our revenue is at least 85% derived from members. For small donations that together don't add up to anywhere near 15%, this is not a concern. If someone wants to make a _sizable_ donation or we get a lot of small donations, that should be okay as long as they are from members, but we may want to double-check with a professional first. If non-member donations would push member-derived revenue under the 85% mark, we lose our Federal tax-exempt status for that year. See: https://www.irs.gov/irm/part7/irm_07-025-012 However, there is a _separate_ issue as to whether donations from members count in the same way as purchases (i.e. port fees) when calculating capital credits. If someone wants to donate, we'll need to seek professional guidance about how to handle that. Either way, I imagine we would be able to accept the donation. As far as I can see, loans aren't relevant to the 85% member revenue test. Putting three year's worth of major expenses into one year would have an effect on capital credits. As far as I know, we are accounting on a cash basis. By "bunching" expenses into the first year, our profit will be lower in the first year and higher in the second and third years. This means that members will accrue lower capital credits in year one and higher capital credits in years two and three. If everything else was equal (no members come or go or pay different port fees), this would be irrelevant. But in practice, it will create some variation. With cash basis accounting, it seems to me that a loan should smooth that out. Is that variation in capital credits a problem? Probably not. It seems like it's going to be part of the natural cycle. I expect our typical pattern over the long term will be to build up cash for a while and then spend a big chunk on switch hardware before starting the cycle over. -- Richard
imho donations are going to shift the burden back to the faithful. This is a normal business expense and the savings will help everyone. As far as source for a possible loan, I would ask our bank first and then open it up to members and outsiders take the best deal. The bank is usually the cheapest money. On Feb 1, 2018 11:00 PM, "Richard Laager" <rlaager@wiktel.com> wrote:
How about getting a loan to cover the difference? That way we could get the savings and not affect the revenue percentages. The message of mine you replied to was about the 85% rule, which applies to revenue. That was in the context of donations. We need to ensure
On 02/01/2018 09:35 PM, Jason Hanke wrote: that, each year, our revenue is at least 85% derived from members. For small donations that together don't add up to anywhere near 15%, this is not a concern. If someone wants to make a _sizable_ donation or we get a lot of small donations, that should be okay as long as they are from members, but we may want to double-check with a professional first. If non-member donations would push member-derived revenue under the 85% mark, we lose our Federal tax-exempt status for that year. See: https://www.irs.gov/irm/part7/irm_07-025-012
However, there is a _separate_ issue as to whether donations from members count in the same way as purchases (i.e. port fees) when calculating capital credits. If someone wants to donate, we'll need to seek professional guidance about how to handle that. Either way, I imagine we would be able to accept the donation.
As far as I can see, loans aren't relevant to the 85% member revenue test.
Putting three year's worth of major expenses into one year would have an effect on capital credits. As far as I know, we are accounting on a cash basis. By "bunching" expenses into the first year, our profit will be lower in the first year and higher in the second and third years. This means that members will accrue lower capital credits in year one and higher capital credits in years two and three. If everything else was equal (no members come or go or pay different port fees), this would be irrelevant. But in practice, it will create some variation. With cash basis accounting, it seems to me that a loan should smooth that out.
Is that variation in capital credits a problem? Probably not. It seems like it's going to be part of the natural cycle. I expect our typical pattern over the long term will be to build up cash for a while and then spend a big chunk on switch hardware before starting the cycle over.
-- Richard
On 02/01/2018 11:34 PM, Jason Hanke wrote:
This is a normal business expense I agree. As far as source for a possible loan Why is a loan desirable? We can afford to pay outright under the terms offered. We pay half now, leaving plenty of money in the bank. We continue to collect port fees. Later in the year, we pay the second half, leaving plenty of money in the bank.
When this comes up for renewal in 3 years, we'll easily be able to pay it all at once with no special dispensation necessary. -- Richard
On Fri, Feb 02, 2018 at 12:03:08AM -0600, Richard Laager wrote:
We can afford to pay outright under the terms offered. We pay half now, leaving plenty of money in the bank. We continue to collect port fees. Later in the year, we pay the second half, leaving plenty of money in the bank.
This seems legit. Thanks, Arista, for this payment plan! -- Mike Horwath, reachable via drechsau@Geeks.ORG
I misunderstood. I thought we were short cash to get the discount. On Feb 2, 2018 12:03 AM, "Richard Laager" <rlaager@wiktel.com> wrote:
On 02/01/2018 11:34 PM, Jason Hanke wrote:
This is a normal business expense I agree. As far as source for a possible loan Why is a loan desirable? We can afford to pay outright under the terms offered. We pay half now, leaving plenty of money in the bank. We continue to collect port fees. Later in the year, we pay the second half, leaving plenty of money in the bank.
When this comes up for renewal in 3 years, we'll easily be able to pay it all at once with no special dispensation necessary.
-- Richard
How about getting a loan to cover the difference? That way we could get the savings and not affect the revenue percentages. The message of mine you replied to was about the 85% rule, which applies to revenue. That was in the context of donations. We need to ensure
As for a "loan/donation" If MICE were to get the bank account down to minimum values to pay the support contract for 3 years, and port fees were slower than expected to come in, you can count on me to personally loan/donate MICE the fees to cover other normal expenses like ARIN fees, or misc parts. From: MICE Discuss [mailto:MICE-DISCUSS@LISTS.IPHOUSE.NET] On Behalf Of Jason Hanke Sent: Thursday, February 01, 2018 11:35 PM To: MICE-DISCUSS@LISTS.IPHOUSE.NET Subject: Re: [MICE-DISCUSS] Arista Support Contract imho donations are going to shift the burden back to the faithful. This is a normal business expense and the savings will help everyone. As far as source for a possible loan, I would ask our bank first and then open it up to members and outsiders take the best deal. The bank is usually the cheapest money. On Feb 1, 2018 11:00 PM, "Richard Laager" <rlaager@wiktel.com> wrote: On 02/01/2018 09:35 PM, Jason Hanke wrote: that, each year, our revenue is at least 85% derived from members. For small donations that together don't add up to anywhere near 15%, this is not a concern. If someone wants to make a _sizable_ donation or we get a lot of small donations, that should be okay as long as they are from members, but we may want to double-check with a professional first. If non-member donations would push member-derived revenue under the 85% mark, we lose our Federal tax-exempt status for that year. See: https://www.irs.gov/irm/part7/irm_07-025-012 However, there is a _separate_ issue as to whether donations from members count in the same way as purchases (i.e. port fees) when calculating capital credits. If someone wants to donate, we'll need to seek professional guidance about how to handle that. Either way, I imagine we would be able to accept the donation. As far as I can see, loans aren't relevant to the 85% member revenue test. Putting three year's worth of major expenses into one year would have an effect on capital credits. As far as I know, we are accounting on a cash basis. By "bunching" expenses into the first year, our profit will be lower in the first year and higher in the second and third years. This means that members will accrue lower capital credits in year one and higher capital credits in years two and three. If everything else was equal (no members come or go or pay different port fees), this would be irrelevant. But in practice, it will create some variation. With cash basis accounting, it seems to me that a loan should smooth that out. Is that variation in capital credits a problem? Probably not. It seems like it's going to be part of the natural cycle. I expect our typical pattern over the long term will be to build up cash for a while and then spend a big chunk on switch hardware before starting the cycle over. -- Richard To unsubscribe from the MICE-DISCUSS list, click the following link: http://lists.iphouse.net/cgi-bin/wa?SUBED1=MICE-DISCUSS&A=1
On 02/02/2018 06:52 AM, Jeremy Lumby wrote:
As for a "loan/donation" If MICE were to get the bank account down to minimum values to pay the support contract for 3 years, and port fees were slower than expected to come in, you can count on me to personally loan/donate MICE the fees to cover other normal expenses like ARIN fees, or misc parts.
First off, as always, thank you for your support of MICE. After the first purchase, I want to reassure everyone that we will still have plenty of money to pay the ARIN fees and other miscellaneous expenses. We'd still have well over $10,000 in the bank. In terms of making the payment for the second order... if we can't collect roughly 20% of our port fees in 4-5 months, I think we have serious problems beyond the support contract. -- Richard
I would say that is more than enough buffer. I completely support moving forward. From: MICE Discuss [mailto:MICE-DISCUSS@LISTS.IPHOUSE.NET] On Behalf Of Richard Laager Sent: Friday, February 02, 2018 4:39 PM To: MICE-DISCUSS@LISTS.IPHOUSE.NET Subject: Re: [MICE-DISCUSS] Arista Support Contract On 02/02/2018 06:52 AM, Jeremy Lumby wrote: As for a "loan/donation" If MICE were to get the bank account down to minimum values to pay the support contract for 3 years, and port fees were slower than expected to come in, you can count on me to personally loan/donate MICE the fees to cover other normal expenses like ARIN fees, or misc parts. First off, as always, thank you for your support of MICE. After the first purchase, I want to reassure everyone that we will still have plenty of money to pay the ARIN fees and other miscellaneous expenses. We'd still have well over $10,000 in the bank. In terms of making the payment for the second order... if we can't collect roughly 20% of our port fees in 4-5 months, I think we have serious problems beyond the support contract. -- Richard To unsubscribe from the MICE-DISCUSS list, click the following link: http://lists.iphouse.net/cgi-bin/wa?SUBED1=MICE-DISCUSS&A=1
I’m a numbers guy - can you fill in the blanks on what 1yr vs 3yr contract costs are, and what’s in the bank now vs what’s expected when folks pay this years port fees? I’m sure it’s a no brainer to go with the 3year option, but having actual numbers to back it up are helpful here :) Also, with the order split scenario, when would they expect payments? Thanks! — Andrew Hoyos hoyosa@gmail.com
On Feb 1, 2018, at 6:51 PM, Richard Laager <rlaager@WIKTEL.COM> wrote:
MICE is responsible for the on-going support contract costs for the main Arista switch. This was factored into the design of the port fees.
We have received quotes from Arista. As is customary, the three-year price is cheaper per year than the one-year price. The savings is non-trivial, especially relative to our annual revenue, so I think it would be wise to purchase the three-year contract.
The three-year contract cost is more than our current cash balance. After we collect this year's port fees, we will be able to cover it while keeping a reasonable reserve. However, we need to do something sooner, as it needs to be renewed this month. Fortunately, Arista has offered to let us split the order in two halves to avoid us drawing the bank balance too close to zero.
Does the membership have any input they'd like to provide the board in this matter?
-- Richard
On Feb 1, 2018, at 19:50, Andrew Hoyos <hoyosa@GMAIL.COM> wrote:
I’m a numbers guy - can you fill in the blanks on what 1yr vs 3yr contract costs are, and what’s in the bank now vs what’s expected when folks pay this years port fees?
The numbers are deliberately missing. Vendors tend to expect/require confidentiality on pricing. I can take numbers from you though. If you wish to share your thoughts on what 1 vs 3 year ratios are fair, a minimum balance for MICE to maintain, etc., please do. -- Richard
Just to be clear: the numbers are deliberately missing here on the public discuss list. I am keeping the other board members fully informed on all the details, including specific numbers, of course. -- Richard
I expect the resulting total expenditure to be disclosed to the membership, once the expenditure is made. The specific line-item details are unnecessary and should be kept confidential. However, your fiduciary responsibility to the membership comes first, agreeing to keep the total expenditure confidential once made would not be inconsistent with that responsibility in my opinion. Thanks. On Thu, Feb 1, 2018 at 8:29 PM, Richard Laager <rlaager@wiktel.com> wrote:
Just to be clear: the numbers are deliberately missing here on the public discuss list. I am keeping the other board members fully informed on all the details, including specific numbers, of course.
-- Richard
-- =============================================== David Farmer Email:farmer@umn.edu Networking & Telecommunication Services Office of Information Technology University of Minnesota 2218 University Ave SE Phone: 612-626-0815 Minneapolis, MN 55414-3029 Cell: 612-812-9952 ===============================================
On 02/01/2018 09:32 PM, David Farmer wrote:
your fiduciary responsibility to the membership comes first, agreeing to keep the total expenditure confidential once made would not be inconsistent with that responsibility in my opinion.
I assume you meant "would not be consistent" or "would be inconsistent". I have not made any specific or additional confidentiality or non-disclosure agreements as part of this process. Arista has not made any requests in this regard beyond the boilerplate on their quote documents. I am just trying to honor what I see as the normal convention in such matters. I do not anticipate any change in the normal treasurer's reports. That is, yes, I expect the payments will be disclosed once made as usual. If the guidance from the membership is that this is unacceptable and I should publicly disclose all the numbers now, I can put that to Arista. -- Richard
I would argue that disclosure to the general public is, indeed inappropriate, except as part of any treasurers report as noted below. However, disclosure to the membership is not disclosure to the public. It is disclosure to the “owners” of the business who by the very nature of this discussion are obviously decision makers in the process. It is pretty normal to disclose quote details to the decision makers. Is there a MICE-MEMBERS list that isn’t open to the public? If not, certainly disclosure to individual members that request the data (consider this such a request from Akamai) is entirely appropriate. As a practical matter, since no NDA exists here, I agree not to further disclose the numbers to anyone outside of those that would legitimately have input on the decision or in authoring feedback from Akamai (strictly Akamai internal). Owen
On Feb 1, 2018, at 19:51 , Richard Laager <rlaager@WIKTEL.COM> wrote:
On 02/01/2018 09:32 PM, David Farmer wrote:
your fiduciary responsibility to the membership comes first, agreeing to keep the total expenditure confidential once made would not be inconsistent with that responsibility in my opinion.
I assume you meant "would not be consistent" or "would be inconsistent".
I have not made any specific or additional confidentiality or non-disclosure agreements as part of this process. Arista has not made any requests in this regard beyond the boilerplate on their quote documents. I am just trying to honor what I see as the normal convention in such matters.
I do not anticipate any change in the normal treasurer's reports. That is, yes, I expect the payments will be disclosed once made as usual.
If the guidance from the membership is that this is unacceptable and I should publicly disclose all the numbers now, I can put that to Arista.
-- Richard
On 02/02/2018 09:20 AM, DeLong, Owen wrote:
However, disclosure to the membership is not disclosure to the public. It is disclosure to the “owners” of the business
The members are absolutely the owners of MICE. In general, I think that disclosure to the member-owners is substantially similar to disclosure to the public, as the member-owners are not held to any binding NDA.
who by the very nature of this discussion> are obviously decision makers in the process.
This thread is an opportunity for the members to provide input to the board. The board is the decision maker.
It is pretty normal to disclose quote details to the decision makers.
Agreed. As I noted, the board is fully informed of the pricing.
Is there a MICE-MEMBERS list that isn’t open to the public?
certainly disclosure to individual members that request the data (consider this such a request from Akamai) is entirely appropriate. The authority of the owners is as a collective, not individually. An individual member-owner of a coop can request anything they want, but
No. We can certainly discuss that separately. that does not obligate the coop to provide that information. Buying a telephone line from a mutual telephone company makes you a member-owner, but does not give a member-owner the authority to compel production of the details of pricing on their telephone switch support contract. Nor does buying electricity from an electric coop give a member-owner the authority to unilaterally compel release of business records relating to energy purchase agreements, even though such details are absolutely critical to the long-term financial viability of the business. This is not limited to coops, either. If I purchase a share of Cisco, Akamai, or any other publicly traded company, that makes me an owner, but I cannot individually compel the company to provide me confidential business records. I think that MICE as a business has a legitimate need for non-disclosure of certain details. For example, if the owners require that pricing details on our purchases is made public, it is reasonable to fear that vendors may give MICE smaller discounts. For another example, if the owners require that port traffic numbers are made public, we may lose members (e.g. Akamai) who wish their port traffic numbers to be confidential, even from the other member-owners. This isn't to say that the board or management can do whatever they want and keep the owners in the dark. Obviously, the company's management and board need to provide various reports on the company's activities. -- Richard
On Feb 2, 2018, at 14:25 , Richard Laager <rlaager@WIKTEL.COM> wrote:
On 02/02/2018 09:20 AM, DeLong, Owen wrote:
However, disclosure to the membership is not disclosure to the public. It is disclosure to the “owners” of the business
The members are absolutely the owners of MICE.
In general, I think that disclosure to the member-owners is substantially similar to disclosure to the public, as the member-owners are not held to any binding NDA.
While that’s currently true, it certainly doesn’t need to remain true. Heck, if you’re that concerned about it, you could even ask members that want to know the details to sign an event specific NDA, or, you could ask members that want additional information available to sign a generic NDA. We could create a second mailing list which only contains members who signed if that’s an issue.
who by the very nature of this discussion> are obviously decision makers in the process.
This thread is an opportunity for the members to provide input to the board. The board is the decision maker.
This is hair splitting and the point is that we’re being asked to provide input/contribute to the decision without complete information.
It is pretty normal to disclose quote details to the decision makers.
Agreed. As I noted, the board is fully informed of the pricing.
The board is the duly elected representatives of the owners who are the ultimate decision makers in this context. There are many ways we can split hairs here, but this won’t likely be the only time we face a similar situation in the future of MICE.
Is there a MICE-MEMBERS list that isn’t open to the public?
No. We can certainly discuss that separately.
Sure. I’d say it’s probably a good idea.
certainly disclosure to individual members that request the data (consider this such a request from Akamai) is entirely appropriate. The authority of the owners is as a collective, not individually. An individual member-owner of a coop can request anything they want, but that does not obligate the coop to provide that information. Buying a telephone line from a mutual telephone company makes you a member-owner, but does not give a member-owner the authority to compel production of the details of pricing on their telephone switch support contract. Nor does buying electricity from an electric coop give a member-owner the authority to unilaterally compel release of business records relating to energy purchase agreements, even though such details are absolutely critical to the long-term financial viability of the business.
Fair enough. Should we hold a vote of the membership on whether the pricing information should be provided to the members as part of this process.
This is not limited to coops, either. If I purchase a share of Cisco, Akamai, or any other publicly traded company, that makes me an owner, but I cannot individually compel the company to provide me confidential business records.
It depends on how many shares you purchase. IIRC, the standard is something like 1% before you are able to compel an agenda item on the AGM, for example.
I think that MICE as a business has a legitimate need for non-disclosure of certain details. For example, if the owners require that pricing details on our purchases is made public, it is reasonable to fear that vendors may give MICE smaller discounts. For another example, if the owners require that port traffic numbers are made public, we may lose members (e.g. Akamai) who wish their port traffic numbers to be confidential, even from the other member-owners.
Sure, there are always tradeoffs. However, note that I’m not asking that the pricing details be made public. I expressed a willingness to sign an appropriate NDA and general agreement not to further disclose the information. As such, I do not agree that what is being requested is general disclosure to the public.
This isn't to say that the board or management can do whatever they want and keep the owners in the dark. Obviously, the company's management and board need to provide various reports on the company's activities.
I think we’re mostly on the same page. I didn’t expect this to be such a contentious matter. Owen
Count this as an informal YES vote to approve the board to take whatever actions they feel best for MICE on this particular matter. I like the idea of going with the 3 year term with Arista allowing the fees to be split. I expect sufficient port fees should be able to be collected in time. ________________________________ From: MICE Discuss <MICE-DISCUSS@LISTS.IPHOUSE.NET> on behalf of DeLong, Owen <00000005a669d12e-dmarc-request@LISTS.IPHOUSE.NET> Sent: Monday, February 5, 2018 11:08 AM To: MICE-DISCUSS@LISTS.IPHOUSE.NET Subject: Re: [MICE-DISCUSS] Arista Support Contract
On Feb 2, 2018, at 14:25 , Richard Laager <rlaager@WIKTEL.COM> wrote:
On 02/02/2018 09:20 AM, DeLong, Owen wrote:
However, disclosure to the membership is not disclosure to the public. It is disclosure to the “owners” of the business
The members are absolutely the owners of MICE.
In general, I think that disclosure to the member-owners is substantially similar to disclosure to the public, as the member-owners are not held to any binding NDA.
While that’s currently true, it certainly doesn’t need to remain true. Heck, if you’re that concerned about it, you could even ask members that want to know the details to sign an event specific NDA, or, you could ask members that want additional information available to sign a generic NDA. We could create a second mailing list which only contains members who signed if that’s an issue.
who by the very nature of this discussion> are obviously decision makers in the process.
This thread is an opportunity for the members to provide input to the board. The board is the decision maker.
This is hair splitting and the point is that we’re being asked to provide input/contribute to the decision without complete information.
It is pretty normal to disclose quote details to the decision makers.
Agreed. As I noted, the board is fully informed of the pricing.
The board is the duly elected representatives of the owners who are the ultimate decision makers in this context. There are many ways we can split hairs here, but this won’t likely be the only time we face a similar situation in the future of MICE.
Is there a MICE-MEMBERS list that isn’t open to the public?
No. We can certainly discuss that separately.
Sure. I’d say it’s probably a good idea.
certainly disclosure to individual members that request the data (consider this such a request from Akamai) is entirely appropriate. The authority of the owners is as a collective, not individually. An individual member-owner of a coop can request anything they want, but that does not obligate the coop to provide that information. Buying a telephone line from a mutual telephone company makes you a member-owner, but does not give a member-owner the authority to compel production of the details of pricing on their telephone switch support contract. Nor does buying electricity from an electric coop give a member-owner the authority to unilaterally compel release of business records relating to energy purchase agreements, even though such details are absolutely critical to the long-term financial viability of the business.
Fair enough. Should we hold a vote of the membership on whether the pricing information should be provided to the members as part of this process.
This is not limited to coops, either. If I purchase a share of Cisco, Akamai, or any other publicly traded company, that makes me an owner, but I cannot individually compel the company to provide me confidential business records.
It depends on how many shares you purchase. IIRC, the standard is something like 1% before you are able to compel an agenda item on the AGM, for example.
I think that MICE as a business has a legitimate need for non-disclosure of certain details. For example, if the owners require that pricing details on our purchases is made public, it is reasonable to fear that vendors may give MICE smaller discounts. For another example, if the owners require that port traffic numbers are made public, we may lose members (e.g. Akamai) who wish their port traffic numbers to be confidential, even from the other member-owners.
Sure, there are always tradeoffs. However, note that I’m not asking that the pricing details be made public. I expressed a willingness to sign an appropriate NDA and general agreement not to further disclose the information. As such, I do not agree that what is being requested is general disclosure to the public.
This isn't to say that the board or management can do whatever they want and keep the owners in the dark. Obviously, the company's management and board need to provide various reports on the company's activities.
I think we’re mostly on the same page. I didn’t expect this to be such a contentious matter. Owen
On 02/05/2018 11:08 AM, DeLong, Owen wrote:
I think we’re mostly on the same page.
I think so too. Bringing this to the members for input may have given the impression that a problem-needing-solving exists and the board was asking for suggestions on solutions. To be clear, I don't think there's a problem here. I think this is a no-brainer. In terms of the function should_we_buy_3_years(...), the members are being given an opportunity to suggest the algorithm inside the function or at least its parameters, not to execute the function and provide the boolean return value. Here's my thinking: I don't see us needing to buy a new switch this year or next year, so this decision doesn't affect that either way. We will probably need to add a line card eventually. That is hopefully a 100G line card, to avoid filling the chassis with another 10G line card. At a quick glance, the 10G has ~35 ports available and the 100G has ~30 ports available. Upgrades to 100G will free up 10G ports. We can also use breakouts to get more 10G ports out of 100G ports if absolutely necessary. It looks to me like we should be okay on this front. In the unlikely event we are not, we will end the year with enough cash to buy another line card anyway, and if we fill up on ports, that means we also brought in a bunch of additional money in port fees. Our only large recurring expense is this contract. The minimum cash balance with this plan is more than 10x other expenses and 5-10x the minimum cash balance of last year. That seems fine, and is only temporary until all port fees are paid, at which point it is even higher. One of the Juniper switches or modules dying is a risk, but those are significantly cheaper. We also already have two switches, and all the participants fit on one, except for the 4 fiber, who could be moved to the Arista in a pinch. The interest we'd earn on the cash is zero or nearly zero, so it takes very little extra discount on 3-years to be acceptable on that basis. The ratio between the 1 and 3 year options is in line with what I'd expect from my previous purchases of support contracts from various vendors. It is in line with a suggested ratio I was provided off-list by another member. Do you see any flaws in the above or have any additional factors I've missed? -- Richard
I felt as a spending of a LARGE amount of our cash reserves, it should be something the general membership had the ability to comment about...there wasn't all that much argument about if we SHOULD do it, just that as a coop, we need to report back to membership of what we are doing with the $. Reid On Mon, Feb 5, 2018 at 3:31 PM, Richard Laager <rlaager@wiktel.com> wrote:
On 02/05/2018 11:08 AM, DeLong, Owen wrote:
I think we’re mostly on the same page.
I think so too.
Bringing this to the members for input may have given the impression that a problem-needing-solving exists and the board was asking for suggestions on solutions. To be clear, I don't think there's a problem here. I think this is a no-brainer.
In terms of the function should_we_buy_3_years(...), the members are being given an opportunity to suggest the algorithm inside the function or at least its parameters, not to execute the function and provide the boolean return value.
Here's my thinking:
I don't see us needing to buy a new switch this year or next year, so this decision doesn't affect that either way.
We will probably need to add a line card eventually. That is hopefully a 100G line card, to avoid filling the chassis with another 10G line card. At a quick glance, the 10G has ~35 ports available and the 100G has ~30 ports available. Upgrades to 100G will free up 10G ports. We can also use breakouts to get more 10G ports out of 100G ports if absolutely necessary. It looks to me like we should be okay on this front. In the unlikely event we are not, we will end the year with enough cash to buy another line card anyway, and if we fill up on ports, that means we also brought in a bunch of additional money in port fees.
Our only large recurring expense is this contract. The minimum cash balance with this plan is more than 10x other expenses and 5-10x the minimum cash balance of last year. That seems fine, and is only temporary until all port fees are paid, at which point it is even higher.
One of the Juniper switches or modules dying is a risk, but those are significantly cheaper. We also already have two switches, and all the participants fit on one, except for the 4 fiber, who could be moved to the Arista in a pinch.
The interest we'd earn on the cash is zero or nearly zero, so it takes very little extra discount on 3-years to be acceptable on that basis.
The ratio between the 1 and 3 year options is in line with what I'd expect from my previous purchases of support contracts from various vendors. It is in line with a suggested ratio I was provided off-list by another member.
Do you see any flaws in the above or have any additional factors I've missed?
-- Richard
-- Reid Fishler Director Hurricane Electric +1-510-580-4178
Agreed on pursuing the 3 year contract if we have the funds to sustain that option. Would also point out that I've never had to sign an NDA with Arista or any other vendor to get a quote so I think people may be assuming an implied NDA that doesn't actually exist in the case of pricing. Just putting the words "confidential" on a quote or document doesn't generate an automatic contractual NDA as much as vendors might wish it does. I'd suggest that members probably do have the right to review the pricing for the purpose of transparency but perhaps the best venue would be to only provide it on demand and just keep it on file rather than sending it to the mailing list. I worry that trying to keep financial details of the coop secret from members in any way, shape or form is a slippery slope even if it's with good intention. I'd add that the coop can certainly ask (though can't contractually hold them) that anyone that chooses to see the pricing not share it outside of voting coop members as it's in the best interest of the coop and it's current and future relationship with vendors and suppliers. I'd hope that everyone understands that pricing can vary based on the customer/sector/etc that a vendor might issue a quote to and I'd hope that Arista is offering MICE their best pricing for renewal which may also not be representative of the pricing MICE member organizations would get on a renewal (IE: I'd expect some orgs may pay more). Heck I can google for Arista or any other quote given that any government and many non-profits are required to make all RFP proceedings public along with unsealing quotes after bids are closed. On Mon, Feb 5, 2018 at 2:33 PM, Reid Fishler <rfishler@he.net> wrote:
I felt as a spending of a LARGE amount of our cash reserves, it should be something the general membership had the ability to comment about...there wasn't all that much argument about if we SHOULD do it, just that as a coop, we need to report back to membership of what we are doing with the $.
Reid
On Mon, Feb 5, 2018 at 3:31 PM, Richard Laager <rlaager@wiktel.com> wrote:
On 02/05/2018 11:08 AM, DeLong, Owen wrote:
I think we’re mostly on the same page.
I think so too.
Bringing this to the members for input may have given the impression that a problem-needing-solving exists and the board was asking for suggestions on solutions. To be clear, I don't think there's a problem here. I think this is a no-brainer.
In terms of the function should_we_buy_3_years(...), the members are being given an opportunity to suggest the algorithm inside the function or at least its parameters, not to execute the function and provide the boolean return value.
Here's my thinking:
I don't see us needing to buy a new switch this year or next year, so this decision doesn't affect that either way.
We will probably need to add a line card eventually. That is hopefully a 100G line card, to avoid filling the chassis with another 10G line card. At a quick glance, the 10G has ~35 ports available and the 100G has ~30 ports available. Upgrades to 100G will free up 10G ports. We can also use breakouts to get more 10G ports out of 100G ports if absolutely necessary. It looks to me like we should be okay on this front. In the unlikely event we are not, we will end the year with enough cash to buy another line card anyway, and if we fill up on ports, that means we also brought in a bunch of additional money in port fees.
Our only large recurring expense is this contract. The minimum cash balance with this plan is more than 10x other expenses and 5-10x the minimum cash balance of last year. That seems fine, and is only temporary until all port fees are paid, at which point it is even higher.
One of the Juniper switches or modules dying is a risk, but those are significantly cheaper. We also already have two switches, and all the participants fit on one, except for the 4 fiber, who could be moved to the Arista in a pinch.
The interest we'd earn on the cash is zero or nearly zero, so it takes very little extra discount on 3-years to be acceptable on that basis.
The ratio between the 1 and 3 year options is in line with what I'd expect from my previous purchases of support contracts from various vendors. It is in line with a suggested ratio I was provided off-list by another member.
Do you see any flaws in the above or have any additional factors I've missed?
-- Richard
-- Reid Fishler Director Hurricane Electric +1-510-580-4178 <(510)%20580-4178>
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On 02/05/2018 03:39 PM, Brady Kittel wrote:
Just putting the words "confidential" on a quote or document doesn't generate an automatic contractual NDA as much as vendors might wish it does.
Agreed. I'm not going to rehash points already made, but I do want to add that the ambiguity can go both ways. Sometimes when you make a point of pushing things, they end up going the opposite way you wanted. For example, if I push back on this, we could get confirmation that it's totally fine to share the pricing publicly. Or, we could get an explicit requirement of a real NDA on that pricing. The latter would require changes to our existing treasurer's reports. I'm not saying this is the case, because as I noted, it hasn't been discussed at all either way with this particular vendor. So I was taking the "let sleeping dogs lie" approach. -- Richard
I think we're on the same page here in general but what I was getting at specifically was that a quote isn't a contract and thus unless you signed an NDA on behalf of MICE (maybe you did and I missed that in the lengthy thread above?) there is no NDA. Just like I wouldn't be concerned with sharing a quote in this scenario with anyone in my own purchasing or infrastructure team for review I don't largely see a difference with MICE and coop members. I guess I would just be upfront with vendors and tell them that quotes are open for viewing by MICE membership unless it's done under some kind of RFP scenario and they can modify the wording as needed on the quote if they are concerned the pricing they are offering is better than what they might offer a commercial customer (IE: "Special discounted pricing for MICE, not representative of standard commercial discount rate" or similar). Anyway I don't see this aspect of the discussion really going anywhere useful in an email thread, and it might just be best discussed at the next meeting, but just felt obligated to point out that we need to encourage financial transparency as I've seen lack of transparency tear apart non-profits in the past and I want to see MICE continue to be successful. On Mon, Feb 5, 2018 at 3:48 PM, Richard Laager <rlaager@wiktel.com> wrote:
On 02/05/2018 03:39 PM, Brady Kittel wrote:
Just putting the words "confidential" on a quote or document doesn't generate an automatic contractual NDA as much as vendors might wish it does.
Agreed.
I'm not going to rehash points already made, but I do want to add that the ambiguity can go both ways. Sometimes when you make a point of pushing things, they end up going the opposite way you wanted. For example, if I push back on this, we could get confirmation that it's totally fine to share the pricing publicly. Or, we could get an explicit requirement of a real NDA on that pricing. The latter would require changes to our existing treasurer's reports.
I'm not saying this is the case, because as I noted, it hasn't been discussed at all either way with this particular vendor. So I was taking the "let sleeping dogs lie" approach.
-- Richard
On Feb 5, 2018, at 12:31 , Richard Laager <rlaager@WIKTEL.COM> wrote:
On 02/05/2018 11:08 AM, DeLong, Owen wrote:
I think we’re mostly on the same page.
I think so too.
Bringing this to the members for input may have given the impression that a problem-needing-solving exists and the board was asking for suggestions on solutions. To be clear, I don't think there's a problem here. I think this is a no-brainer.
Agreed.
In terms of the function should_we_buy_3_years(...), the members are being given an opportunity to suggest the algorithm inside the function or at least its parameters, not to execute the function and provide the boolean return value.
OK
Here's my thinking:
I don't see us needing to buy a new switch this year or next year, so this decision doesn't affect that either way.
Agreed.
We will probably need to add a line card eventually. That is hopefully a 100G line card, to avoid filling the chassis with another 10G line card. At a quick glance, the 10G has ~35 ports available and the 100G has ~30 ports available. Upgrades to 100G will free up 10G ports. We can also use breakouts to get more 10G ports out of 100G ports if absolutely necessary. It looks to me like we should be okay on this front. In the unlikely event we are not, we will end the year with enough cash to buy another line card anyway, and if we fill up on ports, that means we also brought in a bunch of additional money in port fees.
Yep.
Our only large recurring expense is this contract. The minimum cash balance with this plan is more than 10x other expenses and 5-10x the minimum cash balance of last year. That seems fine, and is only temporary until all port fees are paid, at which point it is even higher.
== no brainer as far as I can see.
One of the Juniper switches or modules dying is a risk, but those are significantly cheaper. We also already have two switches, and all the participants fit on one, except for the 4 fiber, who could be moved to the Arista in a pinch.
In an emergency, the Junipers are also quite cheap on the refurb market (I picked up a bunch of EX4200-48P for $259@ recently).
The interest we'd earn on the cash is zero or nearly zero, so it takes very little extra discount on 3-years to be acceptable on that basis.
Yes.
The ratio between the 1 and 3 year options is in line with what I'd expect from my previous purchases of support contracts from various vendors. It is in line with a suggested ratio I was provided off-list by another member.
OK
Do you see any flaws in the above or have any additional factors I've missed?
Nope. I never meant to imply I was opposed to the idea of doing the 3-year contract, especially if there’s no cost to splitting the payments as mentioned. I would, however, like to see us consider providing mechanisms to provide greater transparency to members under NDA as a general function of the organization. While this event may not make it necessary, I think having that facility is generally better than not having it, so I took this opportunity to push in that direction. Owen
participants (11)
-
Andrew Hoyos -
Brady Kittel -
David Farmer -
DeLong, Owen -
Jason Hanke -
Jeremy Lumby -
Justin Krejci -
Mike Horwath -
Reid Fishler -
Richard Laager -
Steve Howard