Google v. Oracle Supreme Court Decision

 The Supreme Court of the United States ruled yesterday in the case Google LLC v. Oracle America Inc. that Google would prevail in Oracle’s 2010 lawsuit regarding Google’s use of Java in the Android operating system. Citing that it was “fair use” for Google to have copied the API (Application Programming Interface) of the Java Programming Language. I don’t think that the Justices were fully aware of the consequences of their decision and stated categorically that their assumption was that Oracle’s copyright of Java was valid. And therefore their ruling only applied to the API and did not violate their understanding of copyright. I believe that this separation of copyright and API is valid and will hold copyright holders to the same rights and privileges they’ve always had. The consequences of this decision will have significant implications towards software developers, developments in general, software in general and the software user overall. An important consideration in this discussion is that most object oriented software code is freely accessible, subject to the license requirements upon download. Signing the license and downloading it are your agreement to uphold these requirements which state that the Java Programming Language is free to use, however, any revenues generated from those derivative works would be subject to a royalty payable to Oracle. Oracle has received payments from every other developer on this basis but not Google. 

It came down to what the definition of an API is and what is it for. In the past programming code was procedural and all aspects of the software application including menu items, features and variables were all included in the one holistic software code base. Think of the computer just processing through a loop of code from beginning to end and then starting over and over. The issue was when software became more capable and usable bugs creeped in and caused the application itself to become unusable. Limiting the upside in terms of software developments capabilities. Java built upon the concept of object oriented programming that was introduced a few decades earlier. It was conceptually that each of the components of a program were broken down to the individual features and implemented within one object. Think of building a program with Lego bricks. Therefore isolating the bugs and issues to the objects that were unable to function as desired. Each object is unaware of any other object's existence however can access other objects capabilities through methods and other features of the programming language. Packaging of a comprehensive feature set of objects into a framework for others is one of the desired capabilities of object oriented programming. The calling of Java is write once, run anywhere. The redundancy of having to rewrite the same code over and over again in procedural programming was a major hindrance to the development, quality and speed of the deliverability of software applications. 

Object reusability became the focus of all developers. If you could access a framework that conducted the necessary work you needed, all you needed to do was access that framework’s API. The API provided the doorway to the published code of the framework that someone spent a significant amount of time and money developing. The code had become tried and tested, was generally what was needed and because it was object oriented, was extendable by any object based developers, and here’s the necessary requirement, through the license of the frameworks copyright holder. The API they were providing was a doorway to facilitate ease of use and understanding in how to use the framework. What the Supreme Court did yesterday was to effectively eliminate the copyright protection on the API. Saying Google’s use of the API was fair use is ridiculous when the Justices also indicate that Android had provided over $42 billion in revenue to Google. This is wholly inconsistent with the concept of fair use. Fair use doesn’t permit the generation of revenues off others' works. The API doorway will now be effectively closed. It will be replaced with a drawbridge, and a moat will be built around the framework for any developer to enter. Partial compensation will probably be necessary as a down payment to sign the license and access the framework. Licensing will be far stricter. 

One of the consequences of this is the object oriented programming languages will cease to be as effective in developing software efficiently, effectively and affordably. Royalties will be higher to access the frameworks and content of those who own valuable copyrighted material. Think Microsoft, IBM, Google and all of the other software companies that were proponents of Google in this action. Content will be king and everyone will have to pay dearly for it. Developers work will be more constrained as access to the necessary frameworks will be a legal process that precedes their access and possibly have to pick through the copyrighted materials themselves to find what it is they’re looking for and how to use it. Ease of use through the API isn’t available. 

Oracle is our technological provider. We use the entire Oracle product suite as the technology base of the Preliminary Specification. This includes Java, as well as many other products written in Java. It is reasonable to assume that much of this code may also be licensed from other software providers who are allowing licensed access to Oracle for its use through their API. I anticipate this will affect our development of the Preliminary Specification in detrimental ways. As the copyright holder of the Preliminary Specification we own that content and it is unaffected by this decision. We will not be publishing any API’s at any point. We also have expectations that our costs will escalate due to the superfluous legal necessities this unnecessarily causes. Our ability to access API’s for our convenience will be a doorway that is no longer open to us. And as object based developers this will have a time and monetary impact on our development. 

It is therefore at this time. A time in which we are asserting maximum pressure on the producers for them to act and fund the Preliminary Specification. That an amendment to our budget is necessary. We are therefore adding an additional $1 billion cost to the development costs as a result of the Supreme Court's decision. Based on the allocation of our margins this will require an incremental $3 billion be added to our budget for a total of $15 billion U.S. I am also cautioning, as the effects of this decision become more clear, our budget may be further clarified and amended. 

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence. People, Ideas & Objects have published a white paper “Profitable, North American Energy Independence -- Through the Commercialization of Shale.” that captures the vision of the Preliminary Specification and our actions. Users are welcome to join me here. Together we can begin to meet the future demands for energy. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Budget Revisions

We will be resuming our series of “Organizations Don’t Change, People Do,” after we take a short break to fit in some timely arguments.

I’ve revised People, Ideas & Objects budget for a number of reasons detailed in this post. Our costs are escalating based on the demands of time. There are ways in which we can effectively deal with these time constraints in systems development. There are three alternatives to choose from in terms of which priority to focus on; time, quality and cost. In systems development you’re provided with the opportunity to select two at the expense of the other. We have always focused on timeliness and quality as the two priorities for the Preliminary Specifications development. This therefore increases our costs. If not for the Preliminary Specification the cost to industry would be substantially higher than just the cost of our development. The value proposition of the Preliminary Specification is $25.7 to $45.7 trillion over the next 25 - 30 years. I would think that most people in the industry can see clearly how our value proposition generates the value that it does. With the destruction that has happened for the past four decades, that we see happening today, and will continue to happen for the foreseeable future. Change is a necessity and our decentralized production model’s price maker strategy enables our value proposition to be realized. Change also needs to be exercised by the removal of the dead weight bureaucrats from their position of power in the industry. 

Conversely we now know with absolute certainty the alternative of doing nothing has been fully explored by our good friends the bureaucrats. Who chose to jeopardize everything for their personal comfort and convenience. Their actions are directly responsible for the damage and destruction that we’re all facing in the industry, and they have few scapegoats left to blame and excuse themselves from. Their “nothing” alternative has now failed spectacularly and we anticipate their exit from the industry in rapid fashion sometime during the remainder of this year. The Preliminary Specification was always conceived on the basis of creative destruction and the active rebuilding of the industry on the vision contained within its business model and markets. There are few other opportunities, in my opinion, and any others have not yet been conceived of, which would take the better part of a decade to be proven operational models to the point where the Preliminary Specification exists today. The choice is stark, there’s today’s environment and there’s a dynamic, innovative, accountable and profitable oil and gas industry that can be rebuilt on the basis of People, Ideas & Objects work. I don’t see a choice, however I do see a greater sense of urgency, backed by the temporary good fortune of an abundance of oil and gas deliverability. The costs of People, Ideas & Objects development have therefore been increased by 38% to $3.7 billion U.S dollars. 

Our margins were allocated between a royalty to myself and the profit that People, Ideas & Objects would earn. In our past budgets this factor was the cost to be at ⅓, profit at ⅓, and royalty at ⅓. Therefore the profit that will be realized by People, Ideas & Objects will also be $3.7 billion U.S dollars. Producers consider this highway robbery and are pointing to these costs as opposed to the value that will be realized once the price maker strategy is implemented. Industry has earned the reputation of knowing what the cost of everything is, yet knows the value of nothing. They no doubt would prefer I operate in their style where I would take the $3.7 billion, build the software, associated user community and service providers. Then prior to making the software operational hold the industry hostage for the remainder of the cash necessary to make this a profitable venture for myself. Therefore I believe there will be two business lessons in this transaction that we’re defining for them. That they’ll be needing to pay cash upfront for the costs of many things they took for granted before. And secondly they need to understand that businesses operate on profitable business models. An expensive lesson I’m sure but one that I’ll gladly provide them. What producers do know as fact today is that I’m patient, driven to solve this problem and not afraid of their crap.

The total of the two categories now sits at $7.4 billion U.S. dollars. Due to the fact that I see no alternatives, that I am in my 30th year of bringing this solution to market and there is a building sense of urgency in the marketplace. I am raising my royalty to $4.6 billion U.S. dollars or 38% of the budget. That brings the total for the development of the Preliminary Specification to $12 billion U.S. dollars. These costs will be allocated and distributed on the following basis. The 2019 year end boe / day production was 38,063,392.46 barrels for Canada and the U.S. Converting gas at the traditional 6 to 1 heating value basis. Therefore our budget which is financed and allocated based on North American producer deliverability is $315.26 for each boe / day as of December 31, 2019 production volumes. Which isn’t bad really. Even with today’s oil price of approximately $37, one years revenues would be $13,616.00 making the one time cost of the development of the Preliminary Specification just 2.31% of that barrel of oil's full year's revenue. 

Spending what is required on developing the Preliminary Specification will stop the behavior of producers sponsoring excessive competition in the marketplace. Producers won’t be able to afford anything else after the development of our solution and they need to learn to respect the rights of others and uphold their Intellectual Property. Once again I’m glad to be the one instructing them on this finer point of business. Focus and commitment to their business beyond the presence of the next bright shiny object has always been an issue with them. This is apparent in their current activities of beginning to return their shut-in production. 

These are the opportunities that are provided to you in a capitalist marketplace when you build value as opposed to destroying it like the bureaucrats have. The need for industry to have some skin in the game here is paramount to the success of the initiative. Bureaucrats have always avoided having any involvement in initiatives such as ours and that somewhat predetermined any ERP developments failure, as it has with the outcome of the industry today. Our user community needs to have the active involvement of all areas of the oil and gas industry, service industry and others associated with it. With producers money, it may be that their involvement would follow? I am also cancelling my personal coverage of any budget overrun as I had pledged to do in the prior budget version. If there are any cost overruns they will be subject to the same margins and pricing requirements defined here, and will be paid by the industry based on North American oil and gas deliverability. 

The producer bureaucrats have managed the industry as if the revenues earned by the producers was money that was theirs and everyone was trying to “leech” off them. In a way that is 100% correct. Oil and gas is a primary industry in which the revenues of the producers are representative of all of the costs associated with all aspects of the oil and gas, service, tertiary and general economy. These “leeches” are also what allow the bureaucrats to be in control of those revenues and hold on to them as if they were their own. The fact is now they’re not, they’ve lost operational control of that aspect of their business. More will have to be done by the producers to ensure that their wants and needs are met by the service and subsequent industries through the sponsoring and direct funding of the innovations and developments necessary to do so. And just as People, Ideas & Objects are doing in advance. Gone are the days where anyone can go to investors and sell them the idea that oil and gas is a good place to invest. Bureaucrats destroyed that opportunity for themselves and everyone else. 

The industry has been managed in a manner that has cost everyone several trillion dollars. The amount that will be lost in 2020 could be close to a trillion dollars just for this year. Without a plan or strategy to rectify the situation there’ll be no change in the industry. Without a renewed focus on profitability there will be no change in the industry. And what are said bureaucrats talking about in the marketplace today? Nothing. We’re probably looking at picking up the pieces of the industry immediately after these bureaucrats leave. Why would they leave? Simple, there's no cash. Without cash you have no business. Making it exponentially more difficult to manage. And without cash what purpose would the bureaucrats stick around when they were only there to ensure they were skimming most of the bounty for themselves. I found this quote from Micheal Milken’s website and it deals specifically with this cash issue. 

The simple rule of thumb is that risk in capital structure should vary inversely with volatility and risk in the basic business. To paraphrase the late Harold Geneen of ITT, you can make a lot of mistakes in business, but you can’t run out of cash. For some companies, even a dollar of debt is too much. This was as true for some airline, aerospace and technology companies of the late 1960s as it was for telecommunications, networking and Internet companies of the late 1990s.

But who knows maybe these bureaucrats have developed a way in which companies don’t need cash. I mean this of course by not needing cash, and yet doing so in a productive way. Investing in your businesses profitability is a productive activity. The value proposition of just drilling wells was never of any value, which is certainly evident today. 

We’ve come a long way since we published the Preliminary Specification in 2013. Certainly it’s timely in the marketplace today, which doesn’t mean that the bureaucrats realize that it’s necessary. They’ll need to be pushed out or left to leave and therefore the need for Preliminary Specification will not be realized until the mid term. There is one criteria that may change that. And that is the looming complete, and possibly somewhat permanent collapse of the global natural gas price. When people learn of negative prices in global natural gas markets they’ll know that somethings rotten. The issue is that the Organization of Natural Gas Exporting Countries ONGEC+ doesn’t exist and shale based natural gas producers went through a wholesale destruction of their business during the financial crisis over a decade ago. Maybe the bureaucrats are feeling there won’t be much left to lose. I see it as additional justification for the bureaucrats to say so long. 

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North American energy independence. People, Ideas & Objects have published a white paper “Profitable, North American Energy Independence -- Through the Commercialization of Shale.” that captures the vision of the Preliminary Specification and our actions. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Twitter @piobiz anyone can contact me at 587-735-2302 in Calgary or 713-965-6720 in Houston or email here.

Never Means Never

Oil, and to a lesser extent, natural gas prices are suffering from the market’s surprise that “more” oil or gas haven’t been removed from the production profile. North American production being up over one half million barrels is confounding the marketplace. If you've been reading this blog for the last year or more, I've been suggesting that this would happen. The bureaucrats can't, won't and will never change. They also don’t care. I found this interesting quote that provides some understanding of why this happens and some insight into the future direction of the oil and gas bureaucrat. It’s from Henry Kissinger who states.

When enough bureaucratic prestige has been invested in a policy, it is easier to see it fail than to abandon it. 

We also have this “never means never” dilemma facing the raising of our budget. The bureaucrats fight us at every opportunity that they can. Their actions against us are subtle and more oriented to my frustration level than anything else. You see the difficulties in other technology companies having their products implemented in the marketplace. Uber is being aggressively pursued by the New York Mayor. Hillary Clinton has commented that she’s not a fan. The vested interests that are aligned against those with alternative business models have difficult protracted battles ahead of them. Our ability to raise our budget is something that on most days seems to slip further away. Unlike Uber we can’t be operated as an app on someones phone. We have a much broader scope and scale that needs to be developed in order to provide the solutions that the market needs. We do however provide a substantial value proposition once we've developed those application modules of the Preliminary Specification. And that is the choice, a profitable industry with our solution, or continued financial destruction with the status quo.

The real key to our future and the quality of our product is our user community. We continue to focus on its development over the next few years as we await developments on our budget. The question I guess is how much pain can the oil and gas investor handle. The user community will never commit to us in the volumes necessary until such time as the financial resources are secured. We can however communicate with the larger community and get the word out about what it is that we are doing. Have the people in oil and gas understand the process and methods we are using to solve the issues in the industry. Have them informally prepare themselves for the day when we do finally receive our budget and then they can join the community. This is highly constructive work that we are doing today and the audience that we are reaching is growing and is substantial. Without the Internet this would have taken an immense effort and a reasonable budget to accomplish. Today that is not the case. And we can continue to do this for the foreseeable future and make this all happen. I'm not surprised that I am not the only dissatisfied person in oil and gas, I am however surprised at the enthusiasm of our targeted user community. This is doable.

One thought that I continue to speculate on and maybe the oil and gas investors can think more about. Is regarding the raising of our budget needs. Imagine what would happen to a producer's stock if they funded their share of People, Ideas & Objects budget. What would happen if the investment community put pressure on the board of directors of a producer to forward their share of our costs. Understanding the impact of the Preliminary Specification, the going concern concept and the efficient market hypothesis. Would that producers market capitalization then reflect the value of the producer as if they were operational on the Preliminary Specification on a proforma basis. The theory is put into practice every day. And if the bureaucrats were smart, they could maybe earn an extra year or two of quiet vesting of their pensions while we were busy doing our work. Think about that.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Why is Our Budget so Large

In a world where there’s a $3.99 app for that. It seems odd that People, Ideas & Objects needs such a large budget in order to build the Preliminary Specification. Why not just an app on a phone and be done with it. If that were the case you would have the choice of 3 or 4 apps to choose from already. The difficulty is in the level of change that we introduce into the industry. The impact of that change and how it affects the people that work within the industry. The wholesale changes that we are making to the producer firm and the industry. And the need for these changes to be made in order for industry to function profitably in the future. This requires the level of commitment in terms of the financial resources detailed in our budget. However, this commitment is supported by the value proposition that is realized once we make these changes.

The change dynamic that we introduce is that the Preliminary Specification identifies and supports the industry standard Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. When we do this within our system, everything within the industry is affected by this change. Not one element of the producer or the industry is unaffected by moving from the current corporate model to the Joint Operating Committee. It therefore invokes the need for a complete review of all aspects, the interactions and systems that are used by the producer firm, service and oil & gas industries. People, Ideas & Objects becomes an operating system for the industry. That is a very appropriate description of what the Preliminary Specification does.

At the same time we are only moving the compliance and governance frameworks of the hierarchy into alignment with the seven frameworks of the Joint Operating Committee. This is the paperwork that consumes the bureaucracies time and energy today. Once we have attained this alignment within the People, Ideas & Objects software the producer and the industry will realize a speed, innovativeness, accountability and profitability over the current situation. It is those frameworks of the Joint Operating Committee that are the foundation of the industry and it those frameworks that none of the current ERP systems identify or support. It is the result of our research that we were able to determine “what” and “how” a producer and industry would operate, that People, Ideas & Objects can bring you this offering. This is the cornerstone of our Intellectual Property and available only here.

Others may be able to determine other ways in which to organize the producer firm and the oil and gas industry. If so they can spend the time and energy that I have spent in developing People, Ideas & Objects Preliminary Specification. This multi-decade investment will pay off when the industry funds the initial development costs through Intellectual Property royalties to myself, and corporate profits for the firm. These are the costs of business in the 21st century. These Intellectual Property costs are also contrary to what the industry has been willing to pay for in the past. However, they have a choice, to continue on with their losing ways or realize the value proposition that we offer by funding our budget.

Therefore it is change on a wholesale level throughout the industry and Intellectual Property which are the real costs that make our budget the high cost that it is. There is nothing that can be done about either element of these budget categories and I'm sure it will cause much discussion and pain for the bureaucrats to ever have to fund this. In the mean time we can just keep score with the amount of money they are losing, the loss in their market capitalization and their loss of hope for the future. Its important to remember that bureaucracies never change. It is impossible for them to do so. That is why we are appealing to the oil and gas investor to direct their producers to fund People, Ideas & Objects so that they can remove the bureaucracy and replace it with the Preliminary Specification, our user community and service providers.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Budgetary Changes

One of the things that I did during the time that I was off was I took a sharp pencil to the proposed organizational makeup of People, Ideas & Objects. To see if there was any way that we could make the organization perform better in the future to meet the needs of the user community and the oil and gas industry. What a difference. The question that I asked myself is if we were such big believers in cloud computing why were we not implementing these technologies within our own organization at every turn. To date we have implemented them and have benefited greatly from them. One look at our budget however and you can see that we took the mindset that was very typical of the 20th century bureaucrat. We had allocated $200 million to build our own cloud computing facility to host the People, Ideas & Objects application when it was complete. The question was, was this the appropriate direction?

This questioning also involved our software development environment. Many services are springing up that provide the horsepower necessary to host a software development environment that would meet the needs of a development environment that People, Ideas & Objects requires. What we would need is an excessive amount of computing power for those times in which we would build elements of the application. Oracle is now one of these firms offering these software development hosting services. This removes a significant amount of capital from our development budget but it also reduces our organizational overhead in many ways. We don't have to concern ourselves with the minutiae of keeping servers up and running and backing up everything as many times as possible. These services will be provided to us by using Oracle services. Providing us with lower costs, easier administration but most importantly the speed of our development team will be enhanced and our focus sharpened.

Offering our application in a cloud computing configuration to the dynamic, innovative and profitable oil and gas producer was always the consideration. Under the decentralized production model, when we move the administrative and accounting resources to the service providers, why would we leave the IT staff at the oil and gas producer? We wouldn’t. The point is instead of providing that service ourselves by buying Oracle hardware and running it ourselves, we will be purchasing Oracle cloud computing services to run our application on their servers and deliver our applications in that manner. The oil and gas producers won't know the difference. Other than the fact that Oracle will have sizably larger facilities and therefore much higher performance than what we would have been able to provide. We will save the $200 million in capital that we allocated to build the facility. Reduce our overhead and organizational complexity by the costs of maintaining that facility. And most importantly again pick up a factor of speed in which we are able to deliver our product to the marketplace, and sharpen our focus. We are not currently hardware experts. We were going to have to become hardware experts. Now we have Oracle, who are hardware experts, now we don't have to be hardware experts. Speed to deliver the application in terms of time of this type is an important point. We may have been able to deliver the world’s best application and failed to deliver it due to our inability to get the hardware right. This is a critical change in our makeup, our strategy, organization and time to deliver. It also reduces substantially our technical risk.

And look at that change in our budget. Some might think that reduces our budget by $400 million! And some would be wrong. I have reallocated these funds across the Oracle budget categories to enhance the work that they will be doing for us. This is in order to recognize the cost of the rental of the computer time for the cloud computing services of the development environment and application delivery. A $100 million boost to the Oracle Developers category to shore up the number of people we are able to access from the mother ship. And an overall loosening of the budget constraints of the other categories. What we are approaching in the oil and gas industry is unique and necessary. Our success is critical to the success of the profitable oil and gas producer. Our value proposition dictates that this money won't be missed. Therefore we are deploying it to the areas that will increase the probability of our success.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Where we Stand Today

We're heading into the Christmas season and a new year will be upon us soon. Its time to look back on 2014 and see what it is that we have accomplished, where it is that we are headed and what our plans are for 2015. Final editing of the Preliminary Specification was completed on December 20, 2013 so it is timely to say happy first birthday to our completed product. We started first thing in January of 2014 to begin the development of our user community. Therefore it is reasonable to state that we have now completed the first year of our three year plan to put the user community in place for the development of the Preliminary Specification. People, Ideas & Objects are committed to user based software developments. This commitment should be starting to show.

With respect to the development of the user community we were able to specify and publish our development budget. Although the budget details a range of what our costs will be. It has been determined that we will only commence developments with the full budget of $4 billion in place. It terms of the character of the user community we were able to determine a variety of specific positions within our leadership team. These positions number upwards of thirty and we have been actively recruiting for these positions throughout the year. Stay tuned for more information on these. If you have an interest in any of these positions please contact me through any of the contact information below. We have also seen a number of people that are interested in participating in the user community begin to make their presence known. These people do not have the desire to be part of the leadership team, however are interested in the work that we are doing and / or are interested in the work of the service providers. Lastly we were able to publish a user community vision that identifies the reason that this user community is not what has typically been a software development user community. And we will continue to build on these developments throughout 2015.

These efforts have to be undertaken and would be our priority even if we had the development resources in place. Our approach is different and therefore we have to educate the market to this difference. Therefore we are already incurring time and energy in efforts that would need to be incurred during our development. And as a result we are not wasting anytime as long as we stay focused and committed to our primary objective of developing the user community. It is important to note that we are not constrained in the development of our software deliverables by physics or anything tangible. It is the development of the user community and the ideas that will be generated within that domain that are our primary constraint. The abilities and capabilities of the user community are the constraints that we must live within. And those constraints are limited in the physical world by the speed of electrons. Therefore the need to start this work now is critical to the success of our entire initiative. Since we are working on that, it is therefore reasonable to state that we are in development.

People, Ideas & Objects have become very lucky as our decentralized production model has driven our value proposition into the stratosphere. And that was before Opec stepped in. I’ll be recalculating our value proposition in the new year but its probably safe to just start saying that its valued in the trillions. The downside of this is its just one issue. We provide so much more value for the dynamic, innovative and profitable oil and gas producer beyond just enabling them to be price makers. On top of all that the Preliminary Specification does do. We enable them to become organizationally flexible to address the future issues that will need to be addressed in similar ways through organizational changes in either the industry, producer or Joint Operating Committee. Something that they will be able to address through participation in the user community and its vision.

As we have discussed we'll be looking in early 2015 to the possibility that we can get some attention in terms of our solution in the marketplace. Attention that could enable our budget to be funded by the investors in the oil and gas industry directing their producer firms to fund our budget. This is an opportunity as the short, medium and long term commodity prices look terrible in North America and the bureaucrats think they are in the catbird seat. We need to at least get the attention of these investors to let them know that there are alternatives to the bureaucrats and they don't necessarily have to take the continued losses that they provide. This opportunity might provide us with the ability to reduce our development time by one year. Therefore it is something that we will make a reasonable attempt at. Otherwise we are sticking with our plan of developing the user community up to January 2017. At which time expect that the user community leadership team will be able to prove to the investors that we offer a viable alternative to the existing bureaucracy and our budget can be funded at that time.

In an earlier posting I noted that I would be taking six weeks off returning January 12, 2015. 2014 was a very good year for us. I think 2015 will be even better, so we'll see you then.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Changes Needed in You, the User

Back to our primary focus at hand, the user community. People, Ideas & Objects software developments are user community based. Having software developers without a user community that is organized and focused is a waste of everyone’s time. People, Ideas & Objects and our user community are providing the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. The only way to do that in the 21st century is through user community based software developments. I can't express our commitment any clearer than this. This however, requires change at every level in the industry.

We have been working on user community developments since the completion of the Preliminary Specification in November 2013. Our plan involves securing the 30 or so leadership positions of the user community before the January 2017 industry deadline. This industry deadline involves progressive producers and investors funding the development of the Preliminary Specifications budget at that time. With the leadership team in place we will be able to provide the industry with the overall vision contained in the Preliminary Specification, and the user community in which will be able to provide the alternative means of oil and gas operations. An alternative to the current bureaucracy that is losing money, which is leaderless and unwilling to change.

Participants in our user community are empowered to make the changes that are necessary in the oil and gas industry. If an individual sees an element within a small part of an application that is incorrect they will have the mechanisms and processes to make the changes to correct these through the user community. In addition, if an individual develops a new business model that provides substantial value for the dynamic and innovative oil and gas producer. They can have that implemented through the user community as well. Contrast this capability to affect change with the frustrations that the individual faces in the current bureaucracy. Where if you propose something new and innovative, your most assuredly are going to be laughed at.

There is also the scope and scale of the People, Ideas & Objects Preliminary Specification and user community. Any changes that you do make will not be populated to only the one company that you are currently working for. With the cloud computing model, and the structure of the proposed system, ideally these changes would be populated across the entire industry. Providing the user with not only the means in which to make the changes, but also the motivation in having those changes impact the entire industry.

A person with ideas on how to make things better for the industry would have plenty of opportunity to express themselves in this new community. The stifling environment of the bureaucracy has taught you to shut up and sit down. To drone on in an unappreciated manner where the frustration of having to deal with obtuse systems and procedures, designed for unknown criteria, clog and spew. If there is a chance that a system can be developed that eliminates the technology focus. One that is designed to understand the culture of the oil and gas industry. One in which your participation is the priority of its development. People, Ideas & Objects is it.

However, for this to happen your participation is required. It all starts with you. And that is how these changes will begin, and that is how the changes that we discussed in this post will happen, with your action. Time to dust off that computer at home and start participating and begin the developments of the user community. It really comes down to the change you make in yourself. Forgetting how to be a drone and becoming a proactive change agent in the oil and gas industry.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Show me the Money!

I want to touch on another area where the user community has a significant business opportunity in terms of their participation with the software developments of People, Ideas & Objects. Within the budget of People, Ideas & Objects there are financial resources earmarked for the user community in the range of $333 to 667 million for the development of the first commercial release. To be candid I will not be looking to raise the minimum amount of money from the industry. I do not want to give the bureaucracy any opportunity to interfere with our projects success, and therefore will be asking for the full $4 billion in funding for us at the start. Our value proposition is valid and our costs are minimal in comparison to that value proposition. Therefore to leave an opening for the bureaucracy to obstruct us, if we were required to raise funds a second time, would put this project in jeopardy. Therefore the user community would have the upper limit in terms of their budget allocation.

The first business opportunity for those members of the user community is to establish themselves as permanent members of the community. These positions will not be one time instances during the first commercial release. We are committed to providing the oil and gas producer with the most profitable means of oil and gas operations. Providing the software development capabilities and user community to the industry on a permanent full time basis to ensure that the industry has the capabilities to deal with constraints of the software, the opportunities and challenges of the industry as they occur. Therefore the user community participant would be able to establish themselves as a permanent member of that community and specialize in the types of services that are needed within the community. These could be provided as either an employee of the community or as a business operation.

The second aspect of the user communities business opportunities is the service providers that are derivative of the user community itself. The service providers are comprised of people and businesses that are participating in the user community and also have business interests in the service providers that are being established as a sub-industry of the oil and gas industry. Recall that these service providers have as their revenue stream a reallocation of the funds that the producers incur as G&A expenditures today. These will still be G&A expenses of the producers in the future however instead of being paid to the administrative and accounting personnel they have on payroll, they will be paid to the service providers who will be conducting the administrative and accounting services under the decentralized production model. These costs that are being incurred today by the producers are estimated to be in the $40 - 60 billion range for the North American oil and gas industry.

These service providers will organize themselves around a process that is managed in the People, Ideas & Objects software. Their management of that process will be on behalf of the entire industry in most instances, with the occasional exception for geographical location being necessary. This process management will be supported by a license that provides them with the exclusive management of that process. This license is granted by People, Ideas & Objects and is earned by the service provider through their previous development efforts in the user community.

If you have had the idea that you would like to establish an operation within the oil and gas industry. And believe that People, Ideas & Objects Preliminary Specification will rule the world. As it should. Then this may be the opportunity that comes around once in a lifetime to make that business operation real. Secondly, or maybe primarily, this is the opportunity that you will have to provide the oil and gas producer with the most profitable means of oil and gas operations.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Alberta's Premier Alison Redford

Last night residents of Alberta were provided with an update from Premier Alison Redford on the upcoming April 1, 2013 provincial budget. Apparently an oil pricing situation in the province has become an issue to the government in terms of their ability to balance the books. And they announced that they may now be projecting a deficit of $3 billion Canadian for 2014. (The Alberta Government owns the majority of the mineral rights in the province on behalf of the Alberta residents.) This is news for a province that has traditionally been conservative in their spending and have run surpluses and have a variety of savings accounts that total at least $20 billion.

The issue apparently comes about as a result of the differential that the producers are receiving on their oil prices. West Texas Intermediate (WTI) is down to the low $90 range from what the Alberta Government projected of the low $100 range. Which is not material, however, since September 2012 the differential on Alberta production has grown to upwards of $40 so that producers are only receiving $50 for their oil production. This is as a result of the markets in the U.S. being satisfied with other imports and internal production and an inability to get the Canadian production out of the province.

We are all familiar with the Keystone XL pipeline issues and the delays in the approval by the Obama administration. Having this pipeline to the states would alleviate the problem and ensure that the producers received the WTI prices less the tariff for the Keystone XL pipeline. But I am not so certain that President Obama will approve the pipeline now that he has been re-elected. It was delayed on the belief that if he was re-elected that he would then approve it because he would not have to deal with his left wing base. I think he didn’t approve because he fundamentally doesn’t agree with the oil sands and will ensure that that oil doesn’t make it to the Gulf coast.

Irrespective of the situation in the states, the Canadian producers should never have put themselves in this situation. They learned in the mid-1990’s that take-away capacity in the natural gas business was what was required to increase the pricing for natural gas. When they built the Alliance pipeline this provided much relief to a congested production market. That same congestion is happening again in the oil markets on a much larger scale. They should have begun dealing with this situation earlier by attempting to get the Keystone XL built earlier, and, building pipelines to the west coast for markets in the far east. Hindsight is 20/20 however they have been advertising they have the second highest reserves of oil in the world. Is that their sole responsibility is the production end of the business?

We see with the recent termination of Mr. Randy Eresman, CEO of Encana Resources that he a) didn’t have the fight in him, and b) felt that the capital markets demand too much in the short term. This short term thinking is very prevalent that is for certain. Nothing focuses the mind like the quarterly demands for performance. But that does not preclude you from making sure that the long term perspective of the firm is taken care of as well. No one is excusing you from leaving the long term perspective alone. It must be taken care of as well. And that is something that the Canadian producers, as a whole, have let slide for so long it has become culturally ingrained throughout their part of the industry that no one concerns themselves with the long term. So projects like People, Ideas & Objects Preliminary Specification will, as it stands today, probably not have a Canadian component to it.

If the province is experiencing such a large hole in their financing I can only imagine what the Canadian producers are experiencing. The Premier said if the differentials continued it might cost the province $6 billion. Losing half of the revenue on any oil production for the oil and gas producers would most certainly put them into a loss situation. And the total loss in revenue could be in the tens of billions. More than enough to finance the development of People, Ideas & Objects Preliminary Specification from just the interest on those losses.

McKinsey, On Getting IT Spending Right

How do we know when we’re spending the right amount of money on Information Technology. McKinsey have an answer to this difficult question in an article entitled “Getting IT Spending Right This Time”. Written in May 2003 I think this article has a few points that have stood the test of time and are pertinent today.

People, Ideas & Objects unquestionably are a technology company. However we are focused on bringing business solutions to market. Solutions like using the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer. We are not selling technology for technology sake. We are selling innovative business solutions. And maybe most importantly, we are solution providers, not change agents. We feel there is a big difference and it appears McKinsey feels the same.

Compounding the challenge is the tendency to view technology, first, as a panacea and, then, after the hype proves unrealistic, as anathema. The experience of the leaders shows that new technology alone won’t boost productivity. Productivity gains come from managerial innovation: fundamental changes in the way companies deliver products or services. Companies generate innovations, in fat years or lean, by deploying new technology along with improved processes and capabilities.

This next quote from McKinsey brings up an important consideration. That the investment in IT in itself will not provide the solution to the problem. There are other investments in the underlying business that need to be considered in order to align the business with the IT investments. What we feel we are doing with the developments at People, Ideas & Objects are aligning the IT developments with the oil and gas business. The Joint Operating Committee is systemic throughout the global oil and gas industry. It is the legal, financial, operational decision making, cultural, communication, innovation and strategic framework of the oil and gas industry. We are identifying, supporting and aligning these frameworks with the compliance and governance frameworks of the hierarchy to achieve a speed, innovation and accountability for the innovative oil and gas producer. We are moving the systems towards the way the industry operates. Not attempting to move the industry towards some theoretical Information Technological model.

For companies competing on the basis of IT-enabled advances, knowing when to jump onto the innovation racetrack can be as important as how. Timing and sequencing, at their simplest, ensure that all prerequisite investments are in place before new IT initiatives are launched. Particularly in the retail sector, our research highlighted the importance of multiple tiers of investment, each laying the foundation for the next. In general merchandising, for example, before companies can implement sophisticated planning applications, a certain level of competence in warehouse- and transport-management systems is needed to get goods to customers.

So yes we should make these investments in preparation for the implementation of People, Ideas & Objects systems. But those should be to ensure that the community first of all captures the correct ways and means of industry operations in the Preliminary Specification. And that we continue to ensure that the industries needs are met by the technology, not the technologies needs are met by the industry.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Summary of our Budget Discussions

So ends our quick discussion on some of the points of our budget. Large in size though our budget may be, I think we can all agree that the scope and scale of the People, Ideas & Objects (PI&O) application, along with the need for that application in the marketplace, are needed today. Anyone proposing to build an application that begins to solve the problems that the industry faces will need to address the budget requirements that are of this scale.

People, Ideas & Objects have proposed a reasonable Revenue Model to raise the financial resources to meet these budget requirements. It is a fair and equitable model that provides benefits to those that participate early. After all early participation is where the real benefits lay.

We have shown how the copyright has the ability to ensure success of this project by ensuring that there will be no knock-off software developments siphoning financial resources off of this development. That the copyright enables the industry to focus all of its resources on this one software development and ensure that it is a highly engineered and focused on delivering a successful application.

How unique attributes of geographic regions, like Canadian royalty and oil sands requirements, can still be handled through the Preliminary Specification. That large software development costs for unique areas does not necessarily preclude producers from participating in the PI&O software development activities.

People, Ideas & Objects have benefited from the maturation in Information Technology and will continue to do so. The revolution in development tools and methodologies have brought our cost estimates in line with what is possible, our delivery times into the realm of truly surprising and the quality of our deliverables into the surreal. We stand at a very important point in time.

Lastly the time is now for the community to form and begin the Preliminary Specification. Our time-lines, start and finish dates depend on securing our budget for the Preliminary Specification. We have budgeted $100 million for this task and expect that the community will have significant influence in the determination of their time-lines. More patience is what is needed, but the time for everyone to act is now.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Time-lines, Start and Finish Dates

Time-line's, start and finish dates are things that we can only dream about now, but are still something that should be discussed. None of these things can begin until the money has been secured. And as of today we have received no commitments from industry whatsoever. This software development project will not be funded on a pay as you go basis. Each of the next three phases of the development will need to have the commitments from industry secured before each phase of development begins.

It is at this time that I do not have the resources to even begin the campaigning to raise the money for the Preliminary Specification. So if there is a producer that wants to begin this process, please step up. Any support would be appreciated.

How long will the Preliminary Specification take. There is no time limit set at this time for the community to complete the Preliminary Specification. It is something that will need to take the input of the necessary parties to gather and codify the work of thousands of people. Removing duplications and ensuring complete coverage will require many eyeballs. And that is not something that can be completed based on a deadline that I can specify at this time. Nor will I be the one to specify the deadline.

One thing for certain is that the Preliminary Specification can’t be rushed. It will take the time for people to think what it is that they want and need in their applications. The Draft Specification provides an overall vision or beginning, but there is so much more that is possible when people get together.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Budgets, Technology and Leverage

In businesses such as People, Ideas & Objects we have three main risk categories to deal with. We have financial, market and technical risks that must be addressed in order to succeed. This post is going to briefly address some of the technical risk that we face and how that risk impacts our budget needs. Embarking on a multi-billion dollar project without addressing these technical risks would be like bungee-jumping without the rope.

Firstly we should point out a decision that we made a few years ago that mitigates much of our technical risk. That is, the use of Oracle Fusion as the base ERP application at the core of People, Ideas & Objects (PI&O) applications. Our products will be built on Oracle's RDBMS, Java and Fusion Middleware which provide us with further ability to mitigate our technical risk by using best of breed in those product categories. The costs of these Oracle products are incremental to the software development budget we have been discussing in this and recent posts.

People, Ideas & Objects is based on a Technical Vision that uses existing technologies in ways that the oil and gas industry will need to implement them. One that sees technology being ubiquitous, always on, secure, asynchronous and dynamic. An environment where the oil and gas industry is supported by a software development capability in addition to the People, Ideas & Objects applications that will be provided. This environment has to be purpose built and that is what PI&O is setting out to do. The technical risks of bringing this environment to the producers that subscribe to this community are mitigated through the ability of controlling the various technical, financial and market risks through the Intellectual Property that holds these disparate parts together.

At the same time we are not pushing the technical envelope. All of the technologies and their proposed deployment are proven time and again capable of the job that we are asking of them. There is a maturation of the technologies in the past ten years that provides an assurance that they are up to the task. I also expect that in the next ten years they will continue to provide greater levels of confidence and assurance of their capabilities.

What can only be described as a revolution in development tools and methodologies has occurred in the past decade. These tools and methodologies have reduced the time and budget requirements of software development projects, while at the same time increased the quality of the deliverables. People, Ideas & Objects have adopted these tools and methodologies and will implement them to reduce the time required for developments, the budget for developments and increase the quality of our developments. Ten years ago when compilers had to be purchased for several thousands of dollars per developer; have now been replaced by free IDE’s that exponentially accelerate the developers productivity. Methodologies who’s user focus is a religion. And build on frameworks and middleware (like Oracle Fusion Middleware) that provide an architecture and building block of work already done. Developers today are far more productive which reduces our risk.

Our approach to developments also mitigates much of the technical risks associated with a project of this size and type. The Draft Specifications use of the Joint Operating Committee imputes a scope of operations that involves the entire producer firm. Little of the unique characteristics of the applications Marketplaces and MCCM exist in current legacy systems. Therefore we are limiting the involvement of legacy system requirements to data only. As such we are unconstrained by existing requirements of systems limitations based on prior technologies. Ours is more of an engineering approach of identifying and resolving problems.

Transitions, accounting integrations, training, and the variety of tasks related to software’s use are not part of People, Ideas & Objects business model. We are focused on software development. We defer the remaining businesses and opportunities to the Community of Independent Service Providers to fulfill the needs of the producers in these areas. This is the only reasonable means in which to approach the hands-on and large scale necessary to complete these activities.

It is these opportunities that I see mitigating the technical risks that we face in this software development project. Although our budget is large, it would have been impossible only a few short years ago. The technologies are sound and capable, ready to carry the load. We have only our imaginations holding us back in terms of how this industry could be managed more efficiently.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Budgets and Canadians

I’ve titled this post “Budget and Canadians” because it is the best example of this unique budget situation that I can highlight. The situation may occur in other jurisdictions, I an not aware of any other specific cases, and those cases will be a determination of the community through the development of the Preliminary Specification. This specific Canadian situation is something that I am intimately aware of and generally am able to predict the outcome of what will happen. Therefore I am writing about what I know and am reasonably sure what the community will decide in developing the Preliminary Specification.

There are two unique development requirements that are required for the Canadian marketplace. The first is a unique royalty regime and the second is the oil-sands developments. If we assume these two unique software developments cost in the area of ~ $100 million. And the Canadian marketplace produces approximately ~ 3.5 million barrels of oil per day. As a result of these facts, when the time comes for the community to decide the geographic scope of the People, Ideas & Objects application (a deliverable of the Preliminary Specification) Canada’s unique development needs will be an issue that needs to be resolved.

Looking at the issue critically from the communities point of view. $100 million in development costs divided by 3.5 million barrels per day is $28.57 / boe of a subsidy that Canadian producers would receive from the general development “pool” in order to meet these unique Canadian software development needs.

What I think needs to happen is the Canadian producers need to pay the basic fees that all producers are assessed in order to participate in the community. Then in order to ensure that the decision is made to include Canada as part of the geographical scope of the People, Ideas & Objects Preliminary Specification. Pay the additional $100 million in additional software development costs allocated over the base of subscribing Canadian producers. That is the Canadian producers, assuming you could achieve 100% subscription rates, would provide an additional $28.57 per barrel of oil equivalent in additional fees to offset these unique Canadian development costs.

Another alternative would be for Canadian producers to discuss with the Alberta and other governments to fund the costs of their unique royalty requirements. I have had discussions with the Alberta government on this point and I wish the industry luck in this endeavour.

It may be considered unreasonable for the community to undertake the unique development costs of any jurisdiction during the Preliminary Specification. As we can see these costs skew the total development costs materially, and as such will need to be addressed separately. I believe jurisdictions like Canada need to address this point prior to subscribing to the Preliminary Specification and have the commitments in hand to fund the unique development costs before they begin their participation. Otherwise they may be surprised at the decisions regarding the geographic scope of the application by the community.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Budgets, Fees and Penalties

Part of our fee structure may not be obvious to most producers on first glance. People, Ideas & Objects Draft Specification was completed in 2008 and the majority of the discussion around its use was conducted in 2009 and the first half of 2010. It was at that point in 2010 that we determined the developments off the Draft Specification were ready to commence. And therefore, started the “clock ticking” at that time, January 1, 2010.

One of the fundamental aspects of our revenue model is that we don’t become “blind sleep walking agents of whom ever will feed us”. Systems development can be easily controlled by closing off the budget during critical points in the development. With an application such as People, Ideas & Objects we need a Revenue Model that deals with this reality and provides us with a means to control the development by controlling the means of production, or budget. Review of the discussion of the Revenue Model will help to provide a better understanding of our point of view.

By starting the clock ticking on January 1, 2010 we have begun “controlling the means of production” by raising the budget for developments. Although the point in time when we have generated revenues has not yet happened. We have pending revenues from the industry when the time comes that the overall proposed solution becomes compelling enough for industry to act. Another aspect of this “controlling the means of production” is the 300% late penalties that we assess for any late payments past March 31, of the assessment year. Producers that take issue with the penalty scheme have two alternatives, to not participate in the community, or pay their fees in a timely manner.

Non-payment of the fees carries the additional penalties of non-use of the software and non-participation in the communities. If in 2015 a producer decides to begin using the software they will face the same fees and penalty structure from 2010 onward. However, the probable steeper penalty will be the inability to have had their organization represented in the community during development. This participation is not a one way participation where the producer tells the developers what their needs are. It is a creative and collaborative process that will involve many decisions and developments that will create solutions that might look foreign to an outsider looking in. I think these points eliminate the motivation for a producer to become a “Free Rider” on the People, Ideas & Objects software developments.

But there’s more. Those producers that are willing to participate early are able to earn what we call the “Participation Bonus”. This bonus is earned when other producers who may have been free riders subsequently decide to join, and pay the fees and penalties back to 2010, offsetting the current years budget, relieving the earlier subscribing producers some of their costs of development.

We have tried to motivate and establish a fair and reasonable Revenue Model that deals with the issues we face in this software development. For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Budget, Copyright and Success

Adding to last weeks discussion of how the copyright is used to support the assessments to the producers and enables the users to innovate freely within the community. Today I want to talk about the benefits of the copyright with respect to the budget. With a $1 - 2 billion budget for software development. Producers should seek comfort in the fact that only one software development will be licensed. People, Ideas & Objects will not have look-alike software development projects springing up and diluting our effort. Multiplying the industries software development costs with multiple instances of the same developments. This post explains how the copyright ensures the resources of the industry remain focused on one solution.

The basis of competition in the software development business, as I have stated here before, has to be on Intellectual Property (IP). To provide a solution that initially provides unique functionality lasts only minutes in terms of a competitive offering. This limited form of competitiveness ends up diluting the original investors financial investment, their innovative-ness in bringing a solution to the market, and has become the sole basis of how most of the software developers try to compete in the oil and gas marketplace today. This may seem like a benefit to the oil and gas producer, however, I would suggest they have a good look around.

Nothing substantial in terms of scope or investment has been undertaken in the ERP software development for oil and gas for almost 30 years. To approach the oil and gas market on the basis of an enduring competitive advantage would be the only reasonable approach to the market. That is why I have taken the strong position, in terms of Intellectual Property, that I have. However, as we can see, there are advantages to taking this strong position on IP for the producers themselves. That advantage is the focused software developments on one solution producing highly engineered solutions that meet the needs of the marketplace, and are not diluted by multiple demands for the types of resources that a software development project of this scope and scale demands.

I am not suggesting that there won’t be solutions that compete with People, Ideas & Objects in the marketplace. What I am asserting is that there won’t be any based on using the Joint Operating Committee as the key organizational construct. To compete, what someone would have to do is to generate their own research, outside the areas of where I have conducted my research, and develop their own solution. This process took me 8 years and if someone where to start today they could probably finish this research by 2020.

The fact of the matter is that the oil and gas producers have fewer choices in the future as to who provides their ERP software systems. One thing is for certain, software providers will have to ensure that the copyright and IP that is provided is as sound and secure as that which is provided by People, Ideas & Objects. To successfully compete in the marketplace today demands this level of commitment to the marketplace, and eliminates the fly-by-night providers who ultimately only siphon off the energy industries focus and financial resources on software development.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Software Development Budget

Last week we had the opportunity to briefly discuss some of the budget issues around People, Ideas & Objects. The budget for the Preliminary Specification has been set at $100 million which represents 5 - 10% of the total initial commercial releases costs. Suggesting that the costs of People, Ideas & Objects software development costs, in its first commercial release would be in the area of $1 to 2 billion. The next few weeks we will have the opportunity to more fully engage in these budget discussions and learn why these costs are necessary.

First of all I don't want to get into a detailed line by line discussion of the budget, but discuss the overall scope and the type of application that is needed in the marketplace and how that type of application could not be developed in any other manner other then through a budget of this substantial size. These budget discussions also assume that I have not underestimated the scope of the undertaking, a very real possibility.

Having an oil and gas application that meets the needs of the users and producers, that is based on the Draft Specification will provide efficiencies if it is built properly. That assumes that it is built with the appropriate budget in place. A $1 - 2 billion software development budget for an application that is on top of the costs for Oracle Fusion applications is larger then anything the industry has attempted before. Add in the producers unique costs of integration, our hybrid cloud computing investment requirements; the producers costs of funding this project, all in, are substantial. This is the reason that we have turned to industry for our funding. Expectations that investment capital would fulfill these capital requirements are misguided.

The integrated nature of using the Joint Operating Committee, and the level of change that is introduced requires that we approach this project with this scope of application and budget in mind. What makes this possible today is the People, Ideas & Objects Value Proposition. Where we allocate the costs of these developments over a large subscription base of producers. Costs of developments are disbursed through to the producer base mitigating these costs as incidentals to each producer. On the other hand, with our potential ability to aggregate a large budget, our capacity to highly engineer software development solutions will provide real value in terms of software development costs per barrel of oil equivalent.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

So What is Phase-Two

As we begin Phase-Two we see People, Ideas & Objects move away from our heavy focus on research. And turn our attention to the commercialization of the Intellectual Property (IP) contained within that research and this communities development. This is done with the objective of completing the Preliminary Specification and ultimately building the software that is defined there. With this blog post I have now updated the knol where the Preliminary Specification is listed. There is now a thorough understanding of the requirements of what people will need to see in order to participate, and the key deliverables of the Preliminary Specification. It’s still brief, but that’s the point, it has to be.

One of the key points noted is the budget for the Preliminary Specification has been set at $100 million. The controversial nature of the size of this budget will lead to much discussion. However, the more time and energy spent at the beginning in these tasks the less that will be spent in the long run in terms of actual development. These Preliminary costs also represent as little as 5 - 10% of the total software development budget. I don’t want to pollute this blog or the knol with discussion about the budget and therefore ask if you have comments to direct them to my email here.

The source of these funds for the Preliminary Specifications budget is based on the 2010 and 2011 fees and penalties that have been assessed at $1.00 per year and $3.00 per year, per barrel of oil equivalent, per year. Please see our Revenue Model for more information. Therefore if a producer was producing on average 40,000 barrels of oil per day over the past two years, the costs for them to participate in the development of the Preliminary Specification would be (2010 $160,000 and 2011 $160,000) = $320,000 for the two years. These costs are for the software development; and provide the producer with the opportunity to have their needs specifically addressed in the software development process. Today its not enough to own the oil and gas asset. You must also have access to the most efficient software systems that make the oil and gas assets profitable. Having direct participation in the development of that software will be an additional competitive advantage for the producer. That's what People, Ideas & Objects are offering.

One key change in the Phase Two proposal is that we have centralized all of our operations in Houston. The President, COO, CFO, VP Community Development, VP Development, and VP Business Development will be based there as will all of their teams. (Previously the development team was to be in California). Houston provides the ideal location if during the Preliminary Specification the scope of the application is determined to be an “Americas” based or “Global” based solution. (P.S. Now would be a good time to start thinking about the many positions discussed in the proposal. People, Ideas & Objects (PI&O’s) will consider people for direct hires and those that are seconded from participating producers.)

In an April blog post we noted that management were too conflicted to participate in the financing of this project. That we were instead turning to the ownership class to fund our capital needs. Phase Two is not a development term but a business term of moving to a more mature foundation. It is not that we're seeking to source our funds directly from the ownership class but to have the ownership class direct management to participate. Doing "something" comes down to industry supporting PI&O's Revenue Model. Only then will anything substantial begin. People, Ideas & Objects revenue is based on a producers reasonable share of the costs of software developments, not on PI&O's cash balances.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.