Friday, March 31, 2006

March Business Report

[business report]

As reported last month, March was our first month of actively marketing the Genesys project. A target selection process was undertaken, with specific marketing deliverables and objectives being defined. We selected our target, Petro Canada, and began the slow process of revealing that bureaucracies capabilities. With three months of budgeted time remaining we should be able to complete our overall marketing objectives.

For the month of April specific tasks will include participation at Petro Canada's Annual General Meeting on the 25th. This will be one of the many highlights for the month of April. Other activities will be reported on as they occur and within the specific months business report.

Technical Architecture
I am extremely pleased to report that Genesys was accepted as a project in the incubator of This accelerates our developments by allowing us to join the community and access the resources of the Collabnet software and the large population of independent Java developers.

Licensing has also been finalized for the development of the code. Using the Sun Community Source License as the base, we have published the Genesys Community Source License and created a business model that will motivate the community of developers to join. I believe these were significant developments in the project. Recruiting of specific developers will begin when the funds have been secured.

There has been an increase in the amount of donations being sought. First we are half way through the first six months of 2006, and even though we have not been able to secure any funding, we are ahead of schedule. Secondly we have increased the budget to accommodate the securing of the code development as a paid project. The business model proposed sees the payment of the code by Genesys from the individual developers whom are contracted to write the technology. This will ensure that their are no residual intellectual property issues.

    • Revenue to the end of March: $0.00
April 1, 2006 budget items. (All costs are in U.S. dollars and include the 33% premium for the development copyright fee.)
    • Sun Grid The first thing we need is a home for the code. The grid provides everything we need in this instance, and the Grid that I selected was Sun's. At $1 per processor hour, a very affordable way to secure the resources we need. I think that our first years requirements would be amply satisfied with 10,000 hours of processing for the remainder of 2006 calendar year. Total requirement = $13,300
    • Ingres Open Source database and part time DBA, Total requirements = $57,500.
    • Collabnet. I would like to have a generous budget for this critical tool. Provides the code management, community process, project management and issue management. Budget includes tools, appropriate setup and consulting services. Total requirements = $34,500
    • General and Administrative, first 6 months of operation Total requirements = $69,000
    • Membership in W3C Total requirements = $9,500
    • Project management and development = $300,000
        • Total Capital and Operating budget, 2006... $484,000
  • Sponsors, producers, and user contributions are accepted.
  • Please recall that this community is and will be supported by the producers. Based on an annual $ assessment per barrel of oil. For 2006 the assessment was fixed at $1 per boe per day per year.
  • A company such as Encana in Canada would therefore be expected to support the community to the tune of $700,000 for the 2006 calendar year.
  • These Monthly Business Report budgets are being proposed on a pay as you go basis for 2006 to support the community and ensure the community develops in the manner that is expected.
  • Your donations are greatly appreciated, no donations means minimal work is being done.

Dr. Thomas C. Schelling

Professor Schelling won the Nobel Prize in 2005 for his cumulative work in game theory. Generally credited with the strategy of Mutually Assured Destruction, or MAD, used during the cold war. The title of this blog entry will provide you with a summary of his works.

I am always of the opinion that rules apply in war fare, his work's go a long way to defining these concepts. One particular point that Schelling notes is that you have the right to be sued. Considering this, provides a lot of leeway in ones strategy.

Thursday, March 30, 2006

Ms. Peggy Noonan of the Wall Street Journal.

Following up on the fine words of John F. Kennedy, Ms Peggy Noonan, Contributing Editor of the Wall Street Journal writes a fine article that strikes at the heart of the times that we now live in. That one has the courage to undertake their responsibilities is lost in the day to day of modern society. Ms. Noonan is writing about an opportunity she had recently to attend a meeting of the men who had recieved the United States Medal of Honor.

I quote from her article.

"I met Nick Oresko. Nick is in his 80s, small, 5-foot-5 or so. Soft white hair, pale-pink skin, thick torso, walks with a cane. Just a nice old guy you'd pass on the street or in the airport without really seeing him. Around his neck was a sky-blue ribbon, and hanging from that ribbon the medal. He let me turn it over. It had his name, his rank, and then "1/23/45. Near Tettington, Germany."

Tettington, Germany. The Battle of the Bulge.

When I got home I looked up his citation on my beloved Internet, where you can Google heroism. U.S. Army Master Sgt. Nicholas Oresko of Company C, 302nd Infantry, 94th Infantry Division was a platoon leader in an attack against strong enemy positions:

Deadly automatic fire from the flanks pinned down his unit. Realizing that a machinegun in a nearby bunker must be eliminated, he swiftly worked ahead alone, braving bullets which struck about him, until close enough to throw a grenade into the German position. He rushed the bunker and, with pointblank rifle fire, killed all the hostile occupants who survived the grenade blast. Another machinegun opened up on him, knocking him down and seriously wounding him in the hip. Refusing to withdraw from the battle, he placed himself at the head of his platoon to continue the assault. As withering machinegun and rifle fire swept the area, he struck out alone in advance of his men to a second bunker. With a grenade, he crippled the dug-in machinegun defending this position and then wiped out the troops manning it with his rifle, completing his second self-imposed, 1-man attack. Although weak from loss of blood, he refused to be evacuated until assured the mission was successfully accomplished. Through quick thinking, indomitable courage, and unswerving devotion to the attack in the face of bitter resistance and while wounded, M /Sgt. Oresko killed 12 Germans, prevented a delay in the assault, and made it possible for Company C to obtain its objective with minimum casualties.
Nick Oresko lives in Tenafly, N.J. If courage were a bright light, Tenafly would glow.

I met Pat Brady of Sumner, Wash., an Army helicopter medevac pilot in Vietnam who'd repeatedly risked his life to save men he'd never met. And Sammy Davis, a big bluff blond from Flat Rock, Ill., on whom the writer Winston Groom based the Vietnam experiences of a character named Forrest Gump. Sgt. Davis saved men like Forrest, but he also took out a bunch of bad guys. And yes, he was wounded in the same way as Forrest. That scene in the movie where Lyndon Johnson puts the medal around Tom Hanks's neck: that's from the film of LBJ putting the medal on Sammy's neck, only they superimposed Mr. Hanks.

I talked to James Livingston of Mount Pleasant, S.C., a Marine, a warrior in Vietnam who led in battle in spite of bad wounds and worse odds. I told him I was wondering about something. Most of us try to be brave each day in whatever circumstances, which means most of us show ourselves our courage with time. What is it like, I asked, to find out when you're a young man, and in a way that's irrefutable, that you are brave? What does it do to your life when no one, including you, will ever question whether you have guts?

He shook his head. The medal didn't prove courage, he said. "It's not bravery, it's taking responsibility." Each of the recipients, he said, had taken responsibility for the men and the moment at a tense and demanding time. They'd cared for others. They took care of their men."

Wednesday, March 29, 2006

Words to live by...

A man does what he must - in spite of personal consequences, in spite of obstacles and dangers and pressures - and that is the basis of all human morality.

John F. Kennedy

Sunday, March 26, 2006

Petro Canada some clarifications.

[Petro Canada]

Seems I missed some important information regarding the numbers that comprise Petro Canada's reserves estimate and stock options. In the interest of fairness of my criticisms, here are the clarifications.

(1) Reserves

I mentioned here that Petro Canada did not have an independent review. Well they also don't have a committee at the Board of Directors level! This lonely task is left to the audit and risk committee to be rubber stamped by the vice president responsible for preparing the reserves numbers, the CEO and the Chairman. How come their is no signed statement of the directors involved in the Finance Audit and Risk Committee? Just as well none of them are engineers or earth scientists anyways.

"The Company's staff of qualified reserves evaluators performs internal evaluations on all of its oil and gas reserves on an annual basis using corporate-wide policies, procedures and practices. Independent qualified petroleum reservoir engineering consultants also conduct annual evaluations, technical audits and/or reviews of a significant portion of the Company's reserves and audit the Company's reserves policies, procedures and practices. In addition, the Company's contract internal auditors test the non-engineering management control processes used in establishing reserves. However, the estimation of reserves is an inherently complex process requiring significant judgment. Estimates of economically recoverable oil and gas reserves are based upon a number of variables and assumptions, such as geoscientific interpretation, economic conditions, commodity prices, operating and capital costs, and production forecasts, all of which may vary considerably from actual results."
My miss print is that I said no outside review of the reserves was done. This may have been incorrect as it sounds like a large portion of work has been done by "independent" reserves evaluators. If this information was available why didn't the company just publish those numbers?

Publish the "real" and "believable" numbers before the annual meeting, and prove that your reserve calculations are accurate by submitting the companies reserves data to Sproule associates or GLJ for their professional and independent review?

2 Management Stock Options.

I also note a large variance in the amount of value that I associated to the stock options granted to the management compared to the decidedly smaller number in the Calgary Herald article noted here. To help reconcile the 180,000 stock options exercised by Mr. Ron Brenneman CEO, as reported in the Herald and the $199 million in value assigned to the management as I stated here. The discrepancy is the Herald reported stock options exercised, and to prove my point about the $199 million please note.
18,361,617 cumulative stock options granted x $46.93 U.S. = $861,710,685.81 U.S.
Of that $861,710,685.81 in stock value confirms and verifies the $199 million that management holds is "in the money".

These clarifications should also serve notice to management of Petro Canada how really easy it is to restate the same facts by just stating the truth.

(1) Source is page 39 of the 2005 Petro Canada annual report.
(2) Derived from page 35 of the fourth quarter 2005 report. (Note 14 Stock Based Compensation)

Petro Canada's conflicting statements.

[Petro Canada] (Click on the title for a puff piece interview with Mr. Ron Brenneman, CEO)

In oil and gas the most innovative producers, on the basis of their capabilities in earth sciences and engineering, are rewarded with higher levels of production. This has been a fact in oil and gas since the days of the Rockerfellar's and exists today, but only with the junior oil and gas company.

What has failed to provide the market with the volumes of energy required is that some larger oil and gas producers have "survived" the past twenty years and grown to dominate the industry. These producers have found their success in a "banking mentality." A mentality that makes investments in oil and gas based on a reasonable or market competitive return. This mentality has gained a foothold in some companies, like Petro Canada.

In stable times this banking mentality can sustain itself. The smaller companies that are technically successful grow to be purchased by the larger firms, with the poorer performing properties being resold. When times change, such as today's high priced commodity market the banking mentality fails. The failure occurs as a result of the firm has lost the ability to function from a scientific and engineering point of view.

It is my opinion that this scientific failure has happened to Petro Canada. Reading the CEO's interview on the website referenced above, it is a clear reflection of his sense of urgency regarding oil and gas finding costs and capabilities. This piece of literature only mentions the words "oil" or "gas" in reference to the support of the Olympic program. Stating that finding costs are $94.50 would be inconsistent with "good news" and directly contradict the previous representation that the CEO's compensation was a reflection of his performance in moving the stock up.

Now that Petro Canada and others have no answer to the market demands for more energy. We hear that "we're not running out of energy" or "there is lots of oil left". I don't think that I am the only person that finds the ironic conflict that producers such as Petro Canada are stating to the marketplace.

Petro Canada believes

[Petro Canada]

Annual report season, timing is just right. Petro Canada believes and that in a nutshell, according to the annual report, is its strategy.

Start off reading this annual report with a strong pot of coffee. Your going to need it.

The first item that comes across as a major misrepresentation to the shareholders is on page 7. The diagram "Upstream Production Forecast" shows that the "Range of Potential Outcomes" may provide no production increases to 2008, yet the text states that production will increase in the range of "8 to 11% average annual growth rate." The other graph on page 7 "Proved and Probable Reserves" is representing that acquisitions are responsible for the "195%" alleged increase in "P2" reserves.

But wait, there's clarification of what this means.

"The reserves replacement ratio is calculated by dividing the year-over-year net change in reserves, before deducting production, by the annual production over the same time period. The reserves replacement ratio is a general indicator of the Company's reserves growth. It is only one of a number of metrics which can be used to analyze a company's upstream business."
It's good we received that piece of data. What it says is that for every barrel of oil produced, 1.95 barrels were "replaced". I think we'll all have to take the word of the company on that one since there is no independent review of the reserves. I wonder why its the only metric of "a number of metrics" provided?

The annual report is also heavy in terms of identifying the associated risks of being in business. Two things that strike me as odd is the hostile environment that Petro Canada operates in comparison to its competitors. Second that it will not be the fault of the company if anything bad happens.

So much effort that is associated with identifying risks, a little more substance on the strategy, objectivity, reserves calculations and financial performance outside of the commodity price increases would probably work to mitigate much of the criticism.

No news like good news, especially for Ron Brenneman

A well researched and appropriate article of news in Saturday's Calgary Herald. The article discusses the total compensation of the CEO's of the major oil and gas firms in Calgary. Questioning the CEO's compensation, and asking if these payments were appropriate? The compensation was measured against their stock price increases and was questioning the validity of their claim for better stock performance.

Asserting that stock price increases are attributable to their performance is of course a sham, I can unfortunately recall during 1986 when the oil prices collapsed. A time when the poor performance of firms was blamed on the 1,000's of people that were laid off. Times certainly have changed.

Of particular note is Petro Canada, our favorite topic here of late. Mr. Ron Brenneman CEO scored the highest monetary compensation and the lowest stock performance. I would think that the reporters at the Herald would be very interested in some of the analysis that I have written about here, lets find out if they are...

Saturday, March 25, 2006

Update on Maven POM

I have heard from Milos, and he has stated that his obligations require him to pass on the opportunity we wrote about here. I sincerely thank Milos and the Maven developers for the excellent work being done with Maven.

I am therefore opening the development and maintenance of the Maven POM for anyone who is able to help out. Just email me.

Wednesday, March 22, 2006

Google Finance

Google now does finance. If you missed the announcement click on this entries title. The information provided is much better then the competitors. You can see photos of the principles, stock charts, performance measures and research reports.

For some unknown reason PCZ (Petro Canada) doesn't post executive compensation! I wonder why that is.

Sunday, March 19, 2006

Petro-Canada "earnings"

[Petro Canada]

Emphasis is placed on the quotation marks as I am concerned with the companies calculated amount of earnings. My concern is that they may be highly overstated. And secondly the tacit assignment that they were "Petro Canada's" earnings.

The need to represent these numbers as managements performance are the logical assumption, I think. When it costs this management team $94.57 per barrel to find oil, why would a company cost the reserves at $6.49? The answer to this question is in the financial statements.

If we divide the amount of depreciation that was recorded in 2005 by the total upstream assets we arrive at 6.31% of the total assets were depreciated by the company. Now if we divide the production by the reserves then we should have a ball park value similar to the depreciation recorded. However, we get 12.6%! Clearly twice as much production value was actually depleted vs. the actual amount that management removed from the books.

Recall these reserves numbers are based on last week's hocus pocus of the reserve increases noted here. If we exclude the hocus pocus we end up with 14.18% of the reserves were produced. This management certainly is creative. But then again they probably have lots of time because they only found 2.4% of their reserve base in 2005. Nonetheless, the difference in earnings is only $1,006 million, reducing total reported earnings from $1,709 million down to $703 million.

Why would Canada's former national oil company overstate their earnings? Upon further investigation I think I found the answer. Drill down to the stock tables and you'll see that the management exercised 3.54 million shares at $18.00 per share, and awarded themselves another 4.19 million shares at $35.00. So for the year, based on Canadian tax rulings the management team will have taxes payable of $34.6 million. But wait, there's more, that is to say in exercising the value of these options based on Friday's stock prices of $53.00 the management will have earned $199,394,270.00 to pay those taxes, so they'll thankfully be ok to make the payment.

Back to the point about earnings. I have to ask if the total stock compensation for the management is (199 / 703) = 28.3% that would look bad, don't you think. Instead, if the stock option compensation was (199 / 1,709) = 11.6% it becomes less of an issue. I propose we accept these numbers as reasonable on the basis of the management team? Not. See you at the annual meeting on the 25th of April.

I can already here the argument that the company will make on this. "Everything is within reason of Generally Acceptable Accounting Principles". And I would agree with that statement. But when you write your own reserve reports and personal checks, you open yourself to criticism. As this may be acceptable to the accountants, as a shareholder, I am concerned in the long term of what the "managements" performance was?

Next entry, how Petro-Canada issues debt to buy stock back from the management.

Saturday, March 18, 2006

Have my ontology call your ontology...

[Development] [Ontology]

I want to mention that some readers may have difficulty in understanding how Genesys has structured the development environment from an ownership point of view. The license for these developments is such that the core is the Genesys system which operates as an interface to "other" systems that are owned and operated by "other" ISV's (Independent Software Vendors). These ISV's are involved in the overall development of the Genesys system, own and operate the particular geographical location that they operate in. The point of this discussion is the interface between the data elements of the core and the individual ISV's functionality. Depracated.

Firstly it is necessary to assume that the ISV is serving a specific geographical area from the perspective of the head office of the producer. If this is not valid then the area where the most activity for that producer is located. The ISV's producer clients will all have the consistent data in the system and therefore, no interface will be required. What will occur is as a result of a producers international operations the ISV has to deal with the core Genesys system and the region where another independent ISV is providing services to producers in that region. The translation of data may not, in a traditional sense, be the same. These data elements may be dictated by two separate royalty jurisdictions or other requirement, yet the disparate data needs to relate to the other.

Relating this situation from one region to the other will require the population of translations within Genesys to be 2 to the power of x regions. (a large number of translations). This type of system has not been done before, nor would it have been able to be done, if not for some key points and technologies.

  • Obviously the first point is the XML that builds the ontology for oil and gas.
    • As mentioned here, here and here, this ontology is Genesys and the ISV's intellectual property.
    • Standards are the objective.
    • PPDM is used for their database schema and their taxonomy.
  • The core of Genesys and the individual geographic coverage by the ISV's are clean slate developments. No retrofitting required.
    • We can develop the optimal solution without constraints.
    • Use of generic's in Java may be prolific.
This point is exactly why XML was developed. For companies to talk to other companies, mechanisms were required to ensure that this issue was dealt with. I mention this as there has been some concern developing regarding the use of multiple software vendors (Genesys' core and the ISV's) and this would become a sticking point. In the old software world that would have been the case, however, with web services this point is effectively dealt with.

So you say potato and I say potato, and this is ok in the system, the only thing we can not handle would be former vice-president Dan Quayle's spelling of potatoe.

Thursday, March 16, 2006

Partnership accounting Part II.

[Partnership accounting] [Java programming language]

I want to raise one of the major problems that Genesys needs to solve. This issue, I think is unique to the accounting for operations in the joint operating committee. The issue is the partnership or joint venture accounting, as discussed here and here, and focuses on the way the functionality and process is written. The way the system needs to be designed will use concepts that are not present in oil and gas accounting systems available today. I would also assert that these issues could not be addressed in prior programming languages. Java opens up many opportunities to handle and solve these types of problems, and I can see how it would be very effective in solving this issue.

The current systems, SAP in particular, focus almost exclusively on the accounting of the company of interest. The joint account is cleared monthly to the appropriate working interest owners, and from that point, little if anything is done other then from an internal perspective. With the change in organizational focus to the joint operating committee, this internal focus is maintained, and from an accountability point of view increased, however the partnership focus begins to take on a more substantial component of the interests of the collective organizations as represented by the joint operating committee.

I have discussed that many of the participants of the JOC will be more active in the day to day of each JOC. Micro Specialization is something that will have to come about as a result of the demands for so much work to be done by the existing and possibly declining population of oil and gas workers. I have also detailed here the use of personnel from various participants will be called upon to conduct activities, whereas currently, the operator and chairman undertook most of these tasks.

This point will help to mitigate the redundant and unproductive duplication of capabilities of the competitive oil and gas marketplace today. As Dr. Giovanni Dosi has suggested, the capabilities and qualities of each individual producer are currently being mirrored and this mirroring is constraining the understanding of the advancement of the sciences and engineering and their application in innovative ways. A more cooperative mindset is required to fulfill the markets demand for energy.

Currently the direction of data and information is from the operator to the non-operators. This by nature was a simple programming issue to overcome, and there will be some elements of this simple method in the Genesys system. The difficulty comes when all participants of the joint operating committee have each been contributing people, financial and technical resources, and direct costs on behalf of themselves, and / or, other members of the joint account. All the producers collective resources are pooled to attain the highest level of technical capability, management and tactical deployment available.

These costs and resources are being incurred on each producers behalf, or, their own behalf and not initially shared, but may be eligible to offset their obligations to other partners or need to be recognized irrespective. This is further complicated by the fact that many of the internal charges and overhead allowances that have been traditionally charged to the joint account also become redundant. These overhead style of costs are replaced by the specific costs and attributes that were directly incurred by each producer represented in the joint operating committee. The Genesys system will capture these components as they are incurred by the employee / worker / investor / consultant in an active job costing state as the user / worker is logged on.

What is therefore required in order to determine the 100% costs attributable to the JOC is a "pooling" of all the eligible associated costs and revenues involved in the property. Once these costs have been aggregated from each producer, then and only then, can the appropriate costs of each producer be determined, recognized and billed.

To only make things more complicated for the developers, this cost data should be compiled into its usable form at least daily and ideally on a live basis. The elimination of the month end process is one of the objectives of this system, and things need to be dealt with on a more current basis. Cash redistribution based on contributions would remain on a clearing basis at the end of the month or when reasonable.

When a cost is incurred, the system is required to be able to denote that transaction as an operated or non-operated cost and if it is eligible. These two attributes are telling the system that these costs are incurred on behalf of all of the participants of the joint operating committee, on behalf of the producer itself and if it should be recognized in the joint account or not. Therefore reflecting that their may be unique costing components of each producer represented by the joint operating committee.

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Tuesday, March 14, 2006

Maven "Project Object Model" POM


The title of this blog will take you to the February 20, 2006 blog entry regarding the technical architecture of the Genesys system. I highlight this entry as it received a comment from Milos Kleint. Milos is a regular contributor to the Maven project at the codehaus.

I am publicly asking Milos if he would be so kind as to write the POM for the Genesys architecture so that interested developers could build their own sandbox for work on the Genesys system. If Milos is still viewing this blog, I would also have him and his group at the codehaus and Apache review the licensing preamble to see if their are any areas of interest in this new community source project.

Monday, March 13, 2006

Petro-Canada's reserve report.

Working for the past week on the licensing has made this blog / project / solution for innovative oil and gas producers real. I challenge the large oil and gas producers to get involved financially and be a part of defining and building this solution. Harvard University, McKinsey Consulting and Dr. Carlota Perez are only 3 instances of the same message and there will be more. If you want to continue to ostracize me then that is fine, but I would suggest you start picking on someone your own size. This community will be busy on productive things.

One of the areas that is a key attribute of oil and gas people is their ability to understand, find and develop reserves. Seeing the real scientists go about their jobs in oil and gas is absolutely fascinating. It is also a very difficult science. A science that is one of the most advanced thinking processes that I have ever been exposed to, and I would suggest the most advanced in a commercial setting.

I have to say at the start, I don't share Petro-Canada's optimistic point of view regarding its fourth quarter report and particularly their reassessment of their reserves. Specifically the statement "195% reserves replacement" concerns me. It appears to me that these numbers may not be as represented.

An upward revision of reserve estimates based on current market prices should be eliminated from the terms of the discussion about reserve increases. This seems almost unfair to represent these as additions as opposed to what they are, old reserves that became economic as a result of higher prices. They therefore are not additions are they.

The extension of your heavy oil reserves to 50 years is inconsistent with standard discounting practices. But then again, based on your report, your able to prepare your own reserve estimates. (See quotation below) How can you count reserves from something that may be producing in 50 years as an addition to your reserves? The present value of anything in 50 years is nothing, ridiculous. Your warning about forward looking statements takes on a greater meaning than I think your readers and investors accept.

My suggestion would be to possibly have noted that 26.4 / 155.3 = 16.99% of your production was replaced.

Looking critically at the $2.495 billion in upstream capital expenditures, one has to ask, with only 26.4 million barrels of additions, the value or faith that shareholders have placed on your firms capabilities is shocking. By my calculations that is a replacement cost of $94.50 per barrel. Why would you continue to sell oil at $60?

As the current custodian of your investors properties, I am writing to assert that the methods and means of management that are employed by your organization are self serving. By not pursuing alternate forms of organizational structure, you are indeed maintaining the long term security of your pension and salary. What do the investor get out of this? 2005 style of performance?

From the fourth quarter report;

"Petro-Canada's staff of qualified reserves evaluators generates the reserves estimates used by the Company. Our reserves staff and management are not considered independent of the Company for purposes of the Canadian provincial securities commissions. Petro-Canada has obtained an exemption from certain Canadian reserves disclosure requirements to permit it to make disclosure in accordance with Securities and Exchange Commission (SEC) standards in order to provide comparability with U.S. and other international issuers. Therefore, Petro-Canada's reserves data and other oil and gas formal disclosure is made in accordance with U.S. disclosure requirements and practices and may differ from Canadian domestic standards and practices. Where the term barrel of oil equivalent (boe) is used in this quarterly report it may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf: one bbl is based on an energequivalencecy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead."

"The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The use of terms such as "probable," "possible," "recoverable," or "potential" reserves and resources in this quarterly report does not meet the guidelines of the SEC for inclusion in documents filed with the SEC."
As I said in the initial paragraph of this entry. This community is moving forward and want's to be all inclusive. We wish to have the large producers involved and playing nice with everyone, so, as I said, if you want to pick on this theory, Harvard, McKinsey and others are more your size. All in all subscribing to support of this community would certainly be a smarter place to put your investors cash.

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Saturday, March 11, 2006

Start your IDE's...

Everything is now in place to start the development process. Please review the preamble, the license and note the location of the project on by clicking on this blogs title.

I have established 5 mailing lists and entered a few comments for discussion in the forum's. There is also copies of the "Plurality" thesis there available for download.

Acceptance of the Genesys Community Source License requires the text of the license to be copied and pasted into an email, note your acceptance, and emailed to me at Registration at is also required.

Genesys Community Source License.

Version 3.0


"Community Code" means Reference Code, Contributed Code, and any combination thereof.

"Community Member" means You and any other party that has entered into and has in effect a version of this License (or who is similarly authorized and obligated by Original Contributor) for the Technology with Original Contributor.

"Contributed Code" means (a) Error Corrections, (b) Shared Modifications and (c) any other code other than Reference Code made available by Community Members in accordance with this License.

"Contributed Code Specifications" means the functional, interface and operational specifications and documentation for Contributed Code.

"Covered Code" means Community Code and Modifications.

"Error Corrections" mean Modifications which correct any failure of Covered Code to conform to any aspect of the Technology Specifications.

"Interfaces" means classes or other programming code or specifications designed for use with the Technology comprising a means or link for invoking functionality, operations or protocols and which are additional to or extend the interfaces designated in the Technology Specifications.

"Modifications" means any (a) change or addition to Covered Code, or (b) new source or object code implementing any portion of the Technology Specifications, but (c) excluding any incorporated Reference Code.

"Original Contributor" means Paul D. Cox and its licensee (Genesys), successors and assigns.

"Reference Code" means source code for the Technology designated by Original Contributor at the Technology Site from time to time.

"Research Use" means research, evaluation, development, educational or personal and individual use, excluding use or distribution for direct or indirect commercial (including strategic) gain or advantage.

"Shared Modifications" means those Modifications which Community Members elect to share with other Community Members pursuant to Section III.B.

"Technology Specifications" means the functional, interface and operational specifications and documentation for the Technology designated by Original Contributor at the Technology Site from time to time.

"Technology" means the technology described in and contemplated by the Technology Specifications and which You have received pursuant to this License.

"Technology Site" means the website designated by Original Contributor for accessing Community Code and Technology Specifications. ""

"You" means the individual executing this License or the legal entity or entities represented by the individual executing this License. "Your" is the possessive of "You."


Original Contributor is licensing the Reference Code and Technology Specifications and is permitting implementation of Technology under and subject to this Genesys Community Source License (the "License") to promote research, education, innovation and product development using the Technology.



A. From Original Contributor. Subject to and conditioned upon Your full compliance with the terms and conditions of this License, including Sections IV (Restrictions and Community Responsibilities) and V.E.7 (International Use), Original Contributor:

1. grants to You a non-exclusive, worldwide and royalty-free license to the extent of Original Contributor's intellectual property rights in and covering the Reference Code and Technology Specifications to do the following for Your Research Use only:
a) reproduce, prepare derivative works of, display and perform the Reference Code, in whole or in part, alone or as part of Covered Code;
b) reproduce, prepare derivative works of and display the Technology Specifications;
c) distribute source or object code copies of Reference Code, in whole or in part, alone or as part Covered Code, to other Community Members or to students;
d) distribute object code copies of Reference Code, in whole or in part, alone or as part of object code copies of Covered Code, to third parties;
e) use Original Contributor's class, interface and package names only insofar as necessary to accurately reference or invoke Your Modifications for Research Use; and
f) use any associated software tools (excluding Compliance Materials), documents and information provided by Original Contributor at the Technology Site for use in exercising the above license rights.

B. Contributed Code. Subject to and conditioned upon compliance with the terms and conditions of this License, including Sections IV (Restrictions and Community Responsibilities) and V.E.7 (International Use), each Community Member:

1. grants to each Community Member a non-exclusive, perpetual, irrevocable, worldwide and royalty-free license to the extent of such Community Member's intellectual property rights in and covering its Contributed Code, to reproduce, modify, display and distribute its Contributed Code, in whole or in part, in source code and object code form, to the same extent as permitted under such Community Member's License with Original Contributor (including all supplements/attachments thereto).

2. grants to Original Contributor a non-exclusive, perpetual, irrevocable, worldwide and royalty-free license to the extent of such Community Member's intellectual property rights in and covering its Contributed Code and Contributed Code Specifications, to (a) use, reproduce, modify, display, prepare derivative works of and distribute Contributed Code and modifications and derivative works thereof, in whole or in part, in source code and object code form, as part of Reference Code or other technologies based in whole or in part on Reference Code or Technology; (b) prepare, use, reproduce, modify, display, prepare derivative works of and distribute Contributed Code Specifications, and modifications and derivative works thereof, in whole or in part, in connection with the exercise of such rights; and (c) sublicense any of the foregoing through multiple tiers of distribution.

C. Subcontracting. You may provide Covered Code to a contractor for the sole purpose of providing development services exclusively to You consistent with Your rights under this License. Such Contractor must be a Community Member or have executed an agreement with You that is consistent with Your rights and obligations under this License. Such subcontractor must assign exclusive rights in all work product to You. You agree that such work product is to be treated as Covered Code.

D. No Implied Licenses. Neither party is granted any right or license other than the licenses and covenants expressly set out herein. Other than the licenses and covenants expressly set out herein, Original Contributor retains all right, title and interest in Reference Code and Technology Specifications and You retain all right, title and interest in Your Modifications and associated specifications. Except as expressly permitted herein, You must not otherwise use any package, class or interface naming conventions that appear to originate from Original Contributor.


As a condition to Your license and other rights, You must comply with the restrictions and responsibilities set forth below, as modified or supplemented, if at all, in Attachment B, Additional Requirements and Responsibilities.

A. Source Code Availability. You must provide source code and any specifications for Your Error Corrections to Original Contributor as soon as practicable. You may provide other Contributed Code to Original Contributor at any time, in Your discretion. Original Contributor may, in its discretion, post Your Contributed Code and Contributed Code Specifications on the Technology Site. Additionally, You may post Your Contributed Code and/or Contributed Code Specifications for Research Use on another website of Your choice; provided, however that You may distribute or display source code of Covered Code and the Technology Specifications only for Research Use and only to: (i) Community Members from whom You have first obtained a certification of status in the form set forth in Attachment A-1, and (ii) students from whom You have first obtained an executed acknowledgment in the form set forth in Attachment A-2. You must keep a copy of each such certificate and acknowledgment You obtain and provide a copy to Original Contributor, if requested.

B. Notices. You must reproduce without alteration copyright and other proprietary notices in any Covered Code that You distribute. The statement, "Use and Distribution is subject to the Genesys Community Source License available at "" must appear prominently in Your Modifications and, in all cases, in the same file as all Your copyright and other proprietary notices.

C. Modifications. You must include a "diff" file with Your Contributed Code that identifies and details the changes or additions You made, the version of Reference Code or Contributed Code You used and the date of such changes or additions. In addition, You must provide any Contributed Code Specifications for Your Contributed Code. Your Modifications, whenever created, are Covered Code and You expressly agree that use and distribution, in whole or in part, of Your Modifications shall only be done in accordance with and subject to this License.

D. Distribution Requirements. You may distribute object code of Covered Code to third parties for Research Use only pursuant to a license of Your choice which is consistent with this License.

E. Extensions.

1. You may create and add Interfaces but, unless expressly permitted at the Technology Site, You must not incorporate any Reference Code in Your Interfaces. If You choose to disclose or permit disclosure of Your Interfaces to even a single third party for the purposes of enabling such third party to independently develop and distribute (directly or indirectly) technology which invokes such Interfaces, You must then make the Interfaces open by (a) promptly following completion thereof, publishing to the industry, on a non-confidential basis and free of all copyright restrictions, a reasonably detailed, current and accurate specification for the Interfaces, and (b) as soon as reasonably possible, but in no event more than thirty (30) days following publication of Your specification, making available on reasonable terms and without discrimination, a reasonably complete and practicable test suite and methodology adequate to create and test implementations of the Interfaces by a reasonably skilled technologist.

2. You shall not assert any intellectual property rights You may have covering Your Interfaces which would necessarily be infringed by the creation, use or distribution of all reasonable independent implementations of Your specification of such Interfaces by Original Contributor or a Community Member. Nothing herein is intended to prevent You from enforcing any of Your intellectual property rights covering Your specific implementation of Your Interfaces, or functionality using such Interfaces, other than as specifically set forth in this Section IV.E.2.


A. License Versions.

Only Original Contributor may promulgate new versions of this License. New code and specifications which You may subsequently choose to accept will be subject to any new License in effect at the time of Your acceptance of such code and specifications. Once You have accepted Reference Code, Technology Specifications, Contributed Code and/or Contributed Code Specifications under a version of this License, You may continue to use such version of Reference Code, Technology Specifications, Contributed Code and/or Contributed Code Specifications under that version of the License.

B. Disclaimer Of Warranties.


2. You understand that, although Original Contributor and each Community Member grant the licenses set forth in the License and any supplements/attachments hereto, no assurances are provided by Original Contributor or any Community Member that Covered Code or any specifications do not infringe the intellectual property rights of any third party.

3. You acknowledge that Reference Code and Technology Specifications are neither designed nor intended for use in the design, construction, operation or maintenance of any nuclear facility.

C. Infringement; Limitation Of Liability.

1. Original Contributor and each Community Member disclaim any liability to all Community Members for claims brought by any third party based on infringement of intellectual property rights.

2. If any portion of, or functionality implemented by, the Community Code, Technology or Technology Specifications becomes the subject of a claim or threatened claim of infringement ("Affected Materials"), Original Contributor may, in its unrestricted discretion, suspend Your rights to use and distribute the Affected Materials under this License. Such suspension of rights will be effective immediately upon Original Contributor's posting of notice of suspension on the Technology Site. Original Contributor has no obligation to lift the suspension of rights relative to the Affected Materials until a final, non-appealable determination is made by a court or governmental agency of competent jurisdiction that Original Contributor is legally able, without the payment of a fee or royalty, to reinstate Your rights to the Affected Materials to the full extent contemplated hereunder. Upon such determination, Original Contributor will lift the suspension by posting a notice to such effect on the Technology Site. Nothing herein shall be construed to prevent You, at Your option and expense, and subject to applicable law and the restrictions and responsibilities set forth in this License and any supplements/attachments, from replacing Community Code in Affected Materials with non-infringing code or independently negotiating, without compromising or prejudicing Original Contributor's position, to obtain the rights necessary to use Affected Materials as herein permitted.


D. Termination.

1. You may terminate this License at any time by notifying Original Contributor in writing.

2. All Your rights will terminate under this License (including any supplements/attachments hereto) if You fail to comply with any of the material terms or conditions of this License (including any supplements/attachments hereto) and do not cure such failure within thirty (30) days after becoming aware of such noncompliance.

3. If You institute patent litigation against any Community Member with respect to a patent applicable to Community Code, then any patent licenses granted by such Community Member to You under this License shall terminate as of the date such litigation is filed. If You institute patent litigation against Original Contributor or any Community Member alleging that Covered Code, Technology or Technology Specifications infringe Your patent(s), then Original Contributor may in its sole discretion terminate all rights granted to You under this License (including any supplements/attachments hereto) immediately upon written notice.

4. Upon termination, You must discontinue all uses and distribution of Covered Code, except that You may continue to use, reproduce, prepare derivative works of, display and perform Your Modifications, so long as the license grants of this license are not required to do so, for purposes other than to implement functionality designated in any portion of the Technology Specifications. Properly granted sublicenses to third parties will survive termination. Provisions which, by their nature, should remain in effect following termination survive.

E. Miscellaneous.

1. Trademark. You agree to comply with Original Contributor's Trademark & Logo Usage Requirements, as modified from time to time, available at the Technology Site. Except as expressly provided in this License, You are granted no rights in or to any Genesys, or Genesys Software, trademarks now or hereafter used or licensed by Original Contributor (the "Genesys Trademarks"). You agree not to (a) challenge Original Contributor's ownership or use of Genesys Trademarks; (b) attempt to register any Genesys Trademarks, or any mark or logo substantially similar thereto; or (c) incorporate any Genesys Trademarks into Your own trademarks, product names, service marks, company names or domain names.

2. Integration and Assignment. Original Contributor may assign this License (and any supplements/attachments) to another by written notification to You. This License (and executed supplements/attachments) represents the complete agreement of the parties concerning the subject matter hereof.

3. Severability. If any provision of this License is held unenforceable, such provision shall be reformed to the extent necessary to make it enforceable unless to do so would defeat the intent of the parties, in which case, this License shall terminate.

4. Governing Law. This License is governed by the laws of Canada and the Province of Alberta, as applied to contracts entered into and performed in Alberta between Alberta residents. The choice of law rules of any jurisdiction and the United Nations Convention on Contracts for the International Sale of Goods shall not apply, nor shall any law or regulation which provides that a contract be construed against the drafter.

5. Dispute Resolution. (SUBJECT TO CHANGE)
a) Any dispute arising out of or relating to this License shall be finally settled by arbitration as set forth in this Section V.E.5, except that either party may bring an action in a court of competent jurisdiction (which jurisdiction shall be exclusive), relative to any dispute relating to such party's intellectual property rights or Your compliance with Original Contributor's compatibility requirements. Arbitration will be administered (i) by the American Arbitration Association (AAA), (ii) in accordance with the rules of the United Nations Commission on International Trade Law (UNCITRAL) (the "Rules") in effect at the time of arbitration, modified as set forth herein, and (iii) by an arbitrator described in Section V.E.5.b who shall apply the governing laws required under Section V.E.4 above. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction to enforce such award. The arbitrator must not award damages in excess of or of a different type than those permitted by this License and any such award is void.
b) All proceedings will be in English and conducted by a single arbitrator selected in accordance with the Rules who is fluent in English, familiar with technology matters pertinent in the dispute and is either a retired judge or practicing attorney having at least ten (10) years litigation experience. Venue for arbitration will be in San Francisco, California, unless the parties agree otherwise. Each party will be required to produce documents relied upon in the arbitration and to respond to no more than twenty-five single question interrogatories. All awards are payable in US dollars and may include for the prevailing party (i) pre-judgment interest, (ii) reasonable attorneys' fees incurred in connection with the arbitration, and (iii) reasonable costs and expenses incurred in enforcing the award.
c) Nothing herein shall limit either party's right to seek injunctive or other provisional or equitable relief at any time.

6. U.S. Government. If this Software is being acquired by or on behalf of the U.S. Government or by a U.S. Government prime contractor or subcontractor (at any tier), the Government's rights in this Software and accompanying documentation shall be only as set forth in this license, in accordance with 48 CFR 227.7201 through 227.7202-4 (for Department of Defense acquisitions) and with 48 CFR 2.101 and 12.212 (for non-DoD acquisitions).

7. International Use.
a) Covered Code is subject to US export control laws and may be subject to export or import regulations in other countries. Each party shall comply fully with all such laws and regulations and acknowledges its responsibility to obtain such licenses to export, re-export or import as may be required. You must pass through these obligations to all Your licensees.
b) You must not distribute Reference Code or Technology Specifications into countries other than those listed on the Technology Site by Original Contributor, from time to time.



YOU REPRESENT THAT YOU ARE legally entitled to grant the licenses set forth herein and that you have sufficient copyrights to allow each Community Member and Original Contributor to use and distribute Your Shared Modifications and Error Corrections as herein permitted (including as permitted in any supplements/attachments to this License).





Completion of this form by noted your acceptance, and send a completed copy of this license to Paul D. Cox at the following address.

Acceptance will also require registration on "".

Pre-amble for the development license.

Licensing for the development of the Core Genesys system will be based on the Sun Community Source Licensing discussed here. For purposes of these developments I have prepared a blog entry located here for the actual license and am referencing such in the copyright notice on this blog.

What I foresee and expect to happen is the core of this system will be Genesys. That use of the core and the copyright that I own in making the joint operating committee the central organizational focus will remain the intellectual property of myself and Genesys. The derivitave work of preparing the Genesys core software will be purchased from the community that's involved in building this core.

What the community will gain in participating in building this core, in addition to the software development revenues they earn, is the core platform that oil and gas producers will access and use for interactions within the individual countries, states and provinces.

It is the domain of the community to provide the unique aspects of the geographical location they are specializing in, and that will use much of the core to interact and drive their business. It will be the core community of developers that form the ISV's that build the geographical interactions. This will be their business model, their strategies and their domain. The joint operating committee is involved in every aspect of oil and gas operations, therefore, each ISV's domain of application will be very rich and highly dependent on a solid core.

The specific geographical functionality will be dependent on the core for the interaction and functionality within and between other countries, states and provinces. And independent software vendors that are intimately part of the community that built the core, will therefore, develop their own systems for the producers involved in the various countries such as Saudi Arabia, Russia, Texas, Alberta or Alaska.

It will then be for the individual energy producer to select from the geographical software components that are necessary to deal with each partner, property or supplier located in whatever jurisdiction. The implied need to co-operate and provide the core with the majority of the functionality is therefore inherent in this community license.

Therefore in summary:

  • The core (Genesys) provides the organizational focus of the joint operating committee.
  • The core (Genesys) provides the interactions between producers.
  • The core (Genesys) provides the interface between individual jurisdictions.
  • The independent software vendors (ISV's) leverage the core to provide the unique requirements of their specific geographical jurisdiction.
Genesys will assess every and all producers that use the core, ISV's will assess the producers for use within their jurisdiction. Each jurisdiction is available to any and all ISV's who actively participate in this community and can establish an appropriate business plan for the jurisdiction that they are interested in. It is assumed that this community will naturally form in this fashion and these business plans will depend on cooperation within the community and participation from those interested parties. Genesys will continue as the ISV for Alberta, however, representations for other jurisdictions within Canada are open for the ISV's consideration.

That in a nutshell is the plan of how we go forward. I think it strikes a healthy balance between opportunity and risk and does much to mitigate the demand for a global system that will deal with the issues in oil and gas. I have to say that Mr. Bill Joy and Mr. Richard Gabriel have conceived a brilliant strategy on how to put these communities to work effectively. As a result I think it is inherently well understood where the dividing line between the core and the jurisdictions is and therefore meets the primary requirement of community license creators.

This is the vision and the plan that I will work to secure. Modifications and changes to the license are not foreseen at this time, however, could occur. However, only within the spirit of the principles noted in the Sun website referenced earlier. One side note is, I continue to endeavor to have the producers see my way in these developments and financially support the core. This will also require the ISV's to also access the producers for their own jurisdictional budgets. It is with this point that I will note that the core's intellectual property will be purchased from the ISV's by Genesys as development proceeds and financial resources are secured.

Copies of this license are immediately available above this preamble. Interested developers wishing to accept the terms and conditions of this license will cut and paste the text of the agreement, note their agreement and email this to me at Developers will also have to have an account on in order to access the Genesys community. Copies of the Plurality thesis are there for your download, review and understanding.

The core system, as mentioned elsewhere, will operate on the Sun grid, and that is upto the ISV's to choose how they will provide these solutions to their individual jurisdictions. The Alberta operation will also reside with the core on the Sun Grid.

Scott McNealy says this is the participation age, this is participation.

Thursday, March 09, 2006

Professor Carlota Perez

Strategy + Business, a magazine of Booz Allen and Hamilton have published a very interesting article in which the editor interviews Dr. Carlota Perez, visiting Senior Research Fellow at Cambridge University. Billed as a long term strategist of the same mold of Russian theorist Nikolai Kondratiev and Joseph Schumpeter, Dr. Perez provides an interesting read on the current economic situation and globalization. Click on the title of this entry for the .pdf.

The substance of the interview focuses around what Professor Perez calls the fifth surge. A surge of information technologies and communications that began in 1971 with the Intel processor's development. Noting the duration of these surges are 45 to 60 years long and comprised of three distinct phases within the time span of the surge.

The first phase, what she calls the installation phase is when excessive capital investments are made to push the infrastructure to a much larger level then would normally be expected to be required. Professor Perez believes that we now have the information technology and communication infrastructure in place, and are moving into the early stages of the "turning", a phase of prolonged pain as the old economy is replaced by a new one based on information technology and communications.

The third or final phase of this surge is referred to as the golden age, much like the 1950's and 1960's, when the focus was on a quality of life for the long term. Dr Perez feels that we have more pain to endure before we get to this golden age and noted the additional role that government and business may have in making the golden age a reality sooner rather then later.

The substance of this expanded role for government and business is unknown at this time, however, Dr. Perez believes that the transition to the golden phase will be restrained until such time as their is some serious consideration of the needs to get there are determined. Much like governments rediscovered their role in creating demand after WWII.

I think that Dr. Perez is clear about the situation the global economy is in. The short term aspect of anything is fairly perilous. The North American lifestyle appears to me to be the area where most of the pain will be realized, and this is only natural based on what Dr. Perez says. The most advanced economies have the most to lose in the "turning" phase to the newer economy of information technology and communications.

Tuesday, March 07, 2006

Targeted marketing, with a new spin.

Petro-Canada is it! Congratulation's to all those that were not selected.

I won't get into the selection criteria here, however, I can assure you that Petro-Canada is as pleased as punch that they were selected. Of particular interest will be Mr. Ron Brennaman, President and CEO.

Petro Canada is the former political arm of the Canadian federal government and they have been awarded with "One of Canada's Most Respected Corporations" according to their website.

What do I want from Petro-Canada and Mr. Brenneman? I want the company to fund the first six months budget of our developments based on our proposed budget in the February Business Report of $184,000. All in all pretty simple.

Next up, I'll do some analysis of the financial statements and provide my review on this blog. Note, this analysis may not be as favourable as the management percieves their performance to have been, so stay tuned this could be interesting.

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Sunday, March 05, 2006

Web Office Applications

[Web 2.0]

An excellent blog I would highly recommend that you review it on a regular basis. The discussion around the WebOffice applications is happening now, and these tools are required for anyone operating in a long term context.

Separation of users

In the past I have provided an understanding of what the concepts of work would be like in the Genesys system. The specific entry is located here. This documented that an individual would have a working inventory of possibly 50 joint operating committees, representative of 100 different oil and gas companies and at least 1,000 wells. All of which requires attention daily, weekly or monthly.

Access to all this data and information in the Genesys system is virtually accessible so that the "worker" could conduct their tasks when and where they were required. The Genesys system will depend heavily on the asynchronous nature of the Java system, as this form of communications provide the most effective means of having large groups of people working together. Recall that further specialization is possible through this system and the focus of the tasks becomes greater. The difficulty is that the developers jobs have become more involved and difficult, but that in itself is another blog entry or more.

We have also spoken of the unique ways that most of the security of the Genesys system, noted here and here, is implemented. This entry is also to discuss the security implications, and, how this scenario of the oil and gas engineer, geologist or accountant is implemented in the Genesys system through the use of my understanding(1) of domains present in Glassfish and Sun Java System Enterprise Server. I also need to further define the client side architecture and interaction of the users with the Genesys system. The client side architecture is provided through the use of Java Webstart.

Domains have been a standard feature of Unix operating systems and relational databases for many years. Sun takes the relatively same concept of domains and applies it to Java. Domains therefore run as essentially separate servers for each user, company, or joint operating committee and even each well if so desired, or, required. This feature is characteristic in both Glassfish and the Sun Java System Enterprise Server.

Domains enable and restrict access to data, information or processing based on the definition of what the domain is. Accountants responsible for reconciliation may be provided access only to the accounting related information regarding certain authorized accounts and JOC's. This level of control is absolute when the systems, such as Genesys, are conceived in domains from the start. Retrofitting this feature to an existing system, I suggest can not be done.

The other benefit of domains is the assurance that all the necessary domains, or areas of responsibility, are assigned to the appropriate individual for that JOC. The engineer or geologist that is the chairperson of the committee is able to find the status of all his domains assigned in a certain JOC or whatever he/she needs. A good example would be that the revenue accountant for the Unit that you participate in has not been replaced for those tasks at this time. This becomes a notice to the domain owner, a user or company, that specific tasks are unassigned. And the engineer or geologist can quickly turn to an open market of qualified people to assign any outstanding tasks to the appropriate people.

Java Webstart's client side architecture needs also to be defined at this point. Use of the secure sandbox feature of this is required and mandatory. This is to enable greater control over the asynchronous process' and access privileges. Genesys faces some critical security and reliability issues and to have a consistent and current Java Runtime Environment (JRE) established mitigates many of the issues and provides the developers the understanding of what and how things would need to be implemented.

Additional advantages from Java Webstart are as follows:

  • Application performance is improved due to caching of the client on the local machine.
  • Clear definition of where asynchronous persistence is established.
  • All Java Archive's (JAR's) are signed. Ensuring that no rogue code is introduced or acted upon. And that no authorization to use alternate server's is available.
  • No native dependencies. Restricting the focus of application functionality within the domain of the server.
  • Use of Java Networking Launch Protocol (JNLP) for some system preferences.
  • Java Webstart can also provide the producers that access to data is not being accessed through unauthorized hardware. (Elimination of the use of Public Machines).
Use of these features in Java provide for mitigation of many of the concerns that users, producers and Genesys will have with the use of the system. That this level of control would be left out of Genesys would be in my opinion, irresponsible.

If I am incorrect in my understanding I would appreciate being pointed in the right direction. Even confirmation would be appreciated by some of the developers that may be reading this blog. My concern is the server requirements of running so many instances. Thank you.

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Saturday, March 04, 2006

The Wharton School of Business podcast

[Innovation] (Click on the title to link to the podcast through Apple's iTunes)

I've listened to the podcast's and find them to be of very high quality and on topic. From an innovation point of view the internal aspects of the podcast were during a special Ben Franklin conference. With more on the way this is one that should be added to your list of podcasts.
In cooperation with the Boston Consulting Group and Infosys.
The Ben Franklin series on innovation notes.

  • A number of organizational barriers or inertia exist against the innovation.
    • A companies capacity to put the business model at risk.
    • Employee responsibility, as in who is it that brings the innovations, who builds the capability to be innovative within the organization.
    • Personal creativity and capability need to be matched to an organization that rewards the creative efforts.
  • Innovation is messy and is in essence, the antithesis of organization.
  • The energy that is consumed in fighting innovation and ideas within the organization may not be explicitly reflected.
  • The author asks an interesting question is it;
    • Necessity, the mother of invention?
    • or, Desperation, the mother of invention? Reflecting on lack of risk eventually leads to decline.
  • Innovation is not a process of "luck" or "chance". It is a capability that can be built within an organization.
  • Building this capability can be started through measuring.
    • Outputs of the innovation process.
    • Input measurements.
    • Effectiveness of the process.
  • How can an innovative culture be built.
    • Realize that it is a substantial cultural change.
    • The choice of the right people.
  • What is the future of innovation.
    • The demands for growth on a global scale demand innovations.
    • Half of all participants in a Boston Consulting Group study were dissatisfied with the results of their innovative efforts. Reflecting that it is a difficult task.
  • Innovation is the key to creating value.
    • Increases growth and productivity.
    • By not being innovative indeed loses value by not being the first to realize a competitive advantage.
  • The idea is the beginning, implementing it is what is difficult.
  • If you have no innovation, eventually you will go out of business in this global world.
So have a look and see what you think. Wharton has scored in the top ten of global business schools for the past decade. I am not certain but I think they were #1 a couple of years during that time.

Dr. Giovanni Dosi, "Sources" Parts III, D.


D. How Organizations Build Knowledge Bases

Continuing on with section III of the "Sources" document, Dosi notes that in this past century the focus of research and development has been as a result of dedicated organizational scope and size. Also noting the relative decline of opportunities for individuals to conduct research and file for patents. It really has been a century better suited to the larger institutions than it has been for the individuals.

An interesting point is raised by Dosi. He refers to Adam Smith and notes

"Adam Smith who first emphasized the possible dichotomy between "system learning" on the one hand and the degrading brutality which repetitive and mindless tasks could imply for some groups of workers, on the other."
In addition to the organizational focus and repetitive brutality of which they operate, Dosi notes that;
"For example, the emergence of the modern factory has also implied "de-skilling of particular categories of craftsman; the abilities of several groups of artisan-like workers became redundant, the skills of making particular machines became increasingly separated for the skills involved in using them; the introduction of automated mass production in big plants has further reduced the knowledge required of significant portions of the work force."
We have to recall that Dosi wrote this paper in 1988. If I remember correctly by that time, hard drives in PC's were still a fairly new item, and had recently expanded their capacity all the way to 10 MB. I note this because of the age and quality of the document may on the whole be pertinent in today's environment, this particular section may not necessarily be as valid in the 21st century.

That companies can out innovate and out produce individuals in terms of research and development are things of the past. Certainly there are exceptions to the rule like Steve Jobs and Dean Kamen. However they are the superstars of the research and development world these days. It is also well known that these people are still responsible for the products that are produced by their respective organizations.

We also see that the people that are constructively idealized as heroes are not necessarily the business leaders, lawyers and bureaucrats but people like Jobs, Wozniak, Kamen, Moore and unfortunately Gates. This I think is a result of the ability of individuals to overcome the dominance of the organization of the past century and that is why we look up to them. I also feel this is a trend that is only beginning.

Today with the Internet their is no possible way that a company can out innovate an individual. Working in isolation with a handful of ideas. The resources at the disposal of individuals is in many ways superior in terms of performance then most of today's organizations. I hesitate to even mention the motivation of the individual vs. the organization. That we, may I suggest, regress to the 19th century in terms of the ability of craftsmen to build their own tools would be a far superior world than in which we live in now. How many times has someone stated in the last 40 years that "the people in the design division just don't get it. I wish they would only listen to us."

That an individual can outperform a classic hierarchical bureaucratic research and development division is a given, and the "Plurality" document is evidence of this trend. I only state this fact to contrast the poor performance of our hierarchically based organizations of today. When individuals meet other individuals and groups with similar desires and passions through the wonders of the Internet, these people can organize and collaborate and the world is far better off.

Referring back to the Ray Kurzweil's blog entry that I wrote, located here, provides an understanding of how there could be 200 times as many changes in the 21st as opposed to the 20th century. And if that is too much to believe at this time, I think that we can all agree that irrespective of the size of the exponential growth, or the number of times the changes occur over the previous century, we know it won't be the hierarchical bureaucracy that brings any of it to us.

In the next entry, section IV "Opportunities incentives and the inter-sectoral patterns of innovation."