Martin Feldstein and Simon Johnson on MIT Video

MIT has released a video of Professor Martin Feldstein and Simon Johnson from February 11, 2009.  (Click on the title of this entry.) Feldstein is the former and long time president of the National Bureau of Economic Research where he was responsible for defining the time frame of when a recession occurred. He is also a Professor at Harvard and a frequent speaker in many of the conferences and forums where ideas, problems and solutions are discussed. Simon Johnson is an MIT Professor and former Chief Economist at the International Monetary Fund. He is also an author of an excellent blog that can be sourced here.

They are of course discussing the current global economy and what can be done. Both are quite pessimistic, and rightly so. The solutions that are discussed are very complex and of questionable value. We are well within the point that the cumulative of the stimulus should have worked, yet are constantly bombarded by an additional trillion here or there. We therefore are very close to the point in time where the majority of the people will realize that not only have the bureaucracies in business failed, but their government has failed as well. 

I have stated here many times that these economic events are part of the long term economic cycle. Based on the Shumpeteerian creative destruction, and specifically Professor Carlota Perez. Her analysis is based on her research of the last 300 years. I highly recommend reviewing the Perez label on this blog to understand the natural process of the old moving out of the picture and the new, in this case Information Technology, pulling the weight of the economy. 

All seems to be going to plan, exactly as Professor Perez stated in 2005. Providing the best reason of all for getting involved in People, Ideas & Objects, so please join me here . 

Technorati Tags: People's Economics MIT Video Perez

IBM's advertisements

Many of the newspapers have been sporting a series of ads from IBM. The first of these is "A mandate for change is a mandate for smart." You know that a trend is well ingrained when the large suppliers are on board. With their recent announcement to purchase Sun Microsystems and being on the same song page that we are, there may be hope for their future.

They not only are on the same page, but they also get it, comments like this are the appropriate mindset for the economic conditions and times that we find ourselves. 

Right now - today - leaders of businesses and governments everywhere have a unique opportunity to transform the way the world works. 

The means that IBM suggests this is possible is;

First, the world is becoming instrumented. Imagine, if you can, almost a billion transistors for every human being. Sensors are being embedded everywhere: in cars, appliances, cameras, roads, pipelines... even in medicine and livestock.

Limiting the People, Ideas & Objects application to a technical perspective we see IBM's comments are consistent with our technical vision . 

Second the world is becoming interconnected. Like people, systems and objects can now "speak" to each other, producing oceans of data.

A further extension of our technical vision in which we note the crush of data will begin with the introduction of IPv6. I also like the comment about people, systems and objects and the similarity to our People, Ideas & Objects name. 

Third, all of those instrumented and interconnected things are becoming intelligent. They are being linked to powerful new back-end systems that can process all that data, and to advanced analytics capable of turning it into real insight, in real time. 

At times I find it as difficult to figure out if IBM is selling something or talking about something in the future. I think I should cordially welcome them to the vapor-ware market. There comment that they want you to join them in building a smarter planet. Welcome to the party IBM, pull up a chair and start pulling some weight if your serious. 

Technorati Tags: People's Vision Sun Trends

McKinsey on the New Normal.

Here we have another in a very long line of papers from McKinsey & Company. (Click on the title of this entry for access to the paper.) Economically we are in something that is not a recession, that should be easily concurred with by anyone in the world. When did the last recession question the viability of GM as a going concern. Or, CitiBank and AIG being bailed out for the nth time. 

Ian Davis, the author of this article and the managing director of McKinsey & Company lays it on the line. Change is in the air and no one is immune from the disruptions being brought about. This article is a conversation starter, the discussion begins with the economic context being raised. 

It is increasingly clear that the current downturn is fundamentally different from recessions of recent decades. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order.

and 

The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.

What will the oil and gas industry look like after this economic phenomenon is finished? Good question. I have suggested many times that the People, Ideas & Objects software applications are the destination vision that the energy industry will be moving too. To assist in defining what the vision is not; I have asked if "anybody believes that the bureaucracy remains in control in 2020"? The answer is of course that will not happen. But "how" and "what" does the oil and gas producer change to? If it's not the People, Ideas & Objects application, and the Joint Operating Committee then I would be surprised. 

Davis makes it clear that the companies that are in distress with high debt levels will more then likely cease to exist. And, there are companies that will survive but not in their current form.

For some organizations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.

and

Either way, the reality is that around the world governments will be calling the shots in sectors (such as debt insurance) that were once only lightly regulated. They will also be demanding new levels of transparency and disclosure for investment vehicles such as hedge funds and getting involved in decisions that were once the sole province of corporate boards, including executive compensation.

Looking at the situation today, it is difficult to argue his point about the level of government involvement in business. This seems to be a much more palatable fact then it has been even in the most recent past. Nonetheless the governments enhanced compliance and involvement in business is probably a given. The need for a higher level of compliance to be handled in the People, Ideas & Objects Draft Specification is therefore a given as well.

The Compliance and Governance Module provides a different and higher level of compliance in comparison to systems like SAP and Oracle. As proposed, in conducting the business of the business in the Joint Operating Committee has a variety of compliance requirements that could and should take place at the time of the transaction. 

Compliance is not a direct action of the management, but a fallout of the activities undertaken by the Joint Operating Committee's. This difference in perspective will be a necessity in the future of these systems. If it takes the current management all their efforts and resources to meet the Sarbane's Oxley requirements, you can be assured they are unable to undertake "more" regulations in the future. This latter statement being proved by the fact that the shareholders are unable to be satisfied by the companies compliance efforts.

Through it all, technological innovation will continue, and the value of increasing human knowledge will remain undiminished. For talented contrarians and technologists, the next few years may prove especially fruitful as investors looking for high-risk, high-reward opportunities shift their attention from financial engineering to genetic engineering, software, and clean energy.

This much is certain: when we finally enter into the post-crisis period, the business and economic context will not have returned to its pre-crisis state. Executives preparing their organizations to succeed in the new normal must focus on what has changed and what remains basically the same for their customers, companies, and industries. The result will be an environment that, while different from the past, is no less rich in possibilities for those who are prepared.

The richness of the possibilities is available to those that join People, Ideas & Objects. Please join me here. 

Technorati Tags: People's McKinsey Vision Change

The Parallel Revolution

A YouTube video in which the presenter suggests that parallelism is the biggest computer science issue of the past 50 years. Whether that is true or not is a subject of much debate. Parallel processing has been around for almost 15 years and has been a bit of disappointment. A disappointment when we consider what is possible if parallelism could solve the problems the presenter is referring to.

The problem comes down to the speed at which the processor can do a job. The operating systems are not necessarily able to manage the priorities all of the traffic coming in for processing. When the process, particularly a business process, needs to be manage in a defined sequence over time, and particularly based on interactions by the user. There is no way in which to ensure that the sequence is taken in the proper sequence. 

This affects us in People, Ideas & Objects because we have chosen to make Asynchronous Process Management one of the four cornerstones of our Technical Vision. When we consider how the Joint Interest Billing process is completed between several companies represented in the Joint Operating Committee, we see the value in solving this problem and enabling this technology. 

The operating and capital costs of a well, facility or plant is distributed to the working interest owners on a monthly basis. In the Partnership Accounting Module of the People, Ideas & Objects application we introduce a number of new variables to make the process more effective in defining and distributing the costs incurred by all of the partners. The ability to identify and apply these new costs, on top of the innovative way it handles all costs, revenues and royalties, needs the Parallelism being discussed in this video. Various people within the firm are measuring and capturing these costs for distribution. This firm may be scattered across many geographical regions and time zones. The ability to have the process managed in sequence may take several weeks of moving from desk to desk in the paper chasing world. In the virtual world it can and needs to move much quicker. Some times things happen that have the necessary dependents not fully complete, and that would be necessary in terms of mitigating the time of all the associated processes. However, there is also a need to ensure that the process is not over-ridding previously made decisions and data in the system. The process needs to be parked if a critical aspect is needed before processing. 

Once this process is completed within the firm, it is then necessary to follow a similar process for the firms in the Joint Operating Committee. When you consider the number of costs, properties and firms within the industry you can see the complexity of this process needs to be handled in the appropriate sequence. 

Where are we in terms of resolving this problem. I would suggest we are very close to having the means at our disposal of defining the software to follow the process in this Asynchronous manner. Steve Jobs of Apple has claimed that he has solved this problem and will release the capability in the next version of their Operating System, named Snow Leopard. Java makes the management of the process possible, but a bit cumbersome. Future changes are with this idea in mind and will achieve resolution of this critical area at some point in the very near future. Making the People, Ideas & Objects application modules able to make the possibilities real, please join me here. 

Technorati Tags: People's Development Vision Asynchronous Management

The State of the Energy Industry.

Quotes from ASPO-USA.com

The price of oil and natural gas have both tanked as a result of the market meltdown. What is most impressive about this changing marketplace is its speed. The rapid decent has caused the commodities to be brought down with the rest of the market. For oil and gas that spells more trouble down the road. What we lose in terms of capacity to conduct operations may turn out to be substantial. The further we get behind the natural decline curve, the harder it is to reclaim lost positions.

I continue to believe one day within the next five to ten years we will see oil at $600.00 / barrel. When demand does return, the product lag may be severe with investors committing to long term projects on much much longer lead times. The Canadian oil sands will be seen as the white elephant that it is, with most projects being scaled back in order to mitigate the losses.

This market is much more dire then I suspected. Professor Perez suggests the turning is necessary to institute the changes between the old economy and the new economy. What we forget is the reality of the situation when we are in it. What I suspect will happen is the stock markets to drop more in the next two years. The liquidity crisis is contained and the markets will ease into a steady decline. Now the tough bit comes. Choosing who stays and who goes. The solvency of companies in all industries will be as brutal a drop as we have seen in this liquidity drop.

Canadian Natural Resource Ltd will be announcing their third quarter results on November 6th. This may be the end of the firm as we know it, I can't even see how they've been able to make payroll this month. There will be the need to address the credit crunch and their Mickey Mouse approach to financing. For the firm to make money will be as a result of the valuation of mark to market coming on September 30, a time when energy prices were lower, therefore lowering their unrealized loss on commodity sales. The point will be made very clear to them that they can't finance a $3.2 billion working capital deficiency and $26 billion in total debt. I am sure the Horizon project is sinking beyond the horizon of what is possible. The ability to have this project propped up is next to impossible. CNRL is insolvent and needs to be shut down.

The ability to have a partner come in and take over the remaining development will be difficult. The heavy oil plant is generally an overall strategy of the firm, companies need to dedicate natural gas for fuel and condensate for diluent. A company coming in can't create this situation and as such getting into the Horizon plant will be difficult.

Nonetheless the following quotations are from the ASPO USA weekly bulletin. The first item is very disconcerting in that I am not aware of any attempt to deal with the difficulty mentioned, the retirement of the human resource in the industry. We know that the retirement of the brain trust is going to happen in the next five years. Weather this market meltdown stops many from retiring is too optimistic to suggest. This problem must be dealt with, and in the Draft Specification I have proposed that building redundant capabilities in each company is the source of the problem and its ultimate solution. The producers need to pool their capabilities in order to mitigate this problem. Pool them on the basis of their interests in the JOC. Using the Military Command & Control metaphor to provide the governance mechanisms that the producers need.

Despite falling costs for steel and other materials, the oil and gas industry again finds itself confronting a shortage of people with the skills and experience to lead new developments. If efforts to plug the skills gap don't succeed, senior industry executives say oil companies' ability to tap new and challenging hydrocarbon resources fast enough to meet demand may have already have reached its limit. (10/23, #17)

The speed and ability of the industry is in question, imagine that, someone should have suggested a new organizational structure for the industry to follow. Please excuse my sarcasm, I really can't help myself.

This next article / quotation is from Jim Gray who had built up a strong natural gas company that is now buried somewhere in Connoco Phillips. He and his partner, John Majors were able to solve some difficult geological problems in the late 1980's building up a firm by the name of Canadian Hunter. Here he suggests there is more at stake then just the money issues that are in the news headlines.

“I’m strongly of the opinion that we’re on the cusp of a global liquid fuels crisis. The forthcoming energy crisis, should it develop, could result in economic, political and social stresses, and turmoil on a scale not experienced for half a century.”
-- Jim Gray, former CEO of Canadian Hunter Exploration

As the Canadian industry moved towards its ultimate strategy of "me too" and we have 10 or so heavy oil projects. The rest of the industry has waned substantially. Natural gas production is down 12% and as our former Governor General stated, Canadian conventional oil production is in steep decline as well.

Ed Schreyer in the Q&A, Ed noted that tar sands are now 50% of Canadian oil supply, as conventional production is declining steeply. With the current financial crisis and very high capital costs for tar sands development, turbulent times are coming for the oil & gas industry in Canada.

So here we are faced with an impossible situation in an impossible financial meltdown. What will these boy geniuses think of to make this problem workable. Fund this development? Not on your life. They want nothing to do with working for a living.

The funding has to come from the two previously identified sources. The disgruntled shareholders who are fed up with the management and can see the vision as it is layed out in the Draft Specification. And the various governments who have royalty regimes in place in oil and gas producing regions. And are able to see that society is too complicated for Hayek's Spontaneous Order to occur. And realize that the "new" economy after this meltdown has had all its fun, needs to have the software built first before we can reorganize based on specialization and define a new division of labor. Please join me here.

Technorati Tags: People's Energy Call-to-action Vision

No one's fault but our own.

On this blog I have documented many of the possible scenarios we may be faced with. Not that these have created a sense of calm, but more to fully explore where we are, and what we should be doing.

We are also not moving forward. The Preliminary Specification needs to define what the scope of the application is. Recruiting of the 100 individuals for this task continues. And by all means, particularly if you have some good ideas, use this process to join me here.

We have specified our alternatives as consisting of 1) Regressing to barbarism with manual systems, 2) Motivating SAP and Oracle to accept our never ending stream of big cheques, or 3) Follow the vision as defined in the Draft Specification and based on a fundamentally more affordable business model.

Not to belabor the point, but it has taken me since September 2003 to produce the Draft Specification. It is a compelling solution that offers a vision that reconciles many of the conflicts & contradictions inherent in the oil and gas industry. The time that it will take for some one to offer a fourth alternative is a time frame that society can not afford.

So our time to consider alternatives has passed. We are now in the full force of the crisis or turning as Professor Carlota Perez calls this time. The need for IT to begin to carry the weight of the economy on its own is our ticket to the very good times, as she so ably describes.

I have used the Intellectual Property (IP) built up in this project to achieve 2 different but critical objectives.

1. To establish that the users will have free and unencumbered access to the IP, and to prepare a derivative service offering to the oil and gas producer.
   
2. Focus the resources of the industry on this one solution.
   

I think it is reasonable to assume, that over many years of development, and even if our scope is determined in the Preliminary Specification as only North America, that our multi-year budget will most assuredly breach the $1 billion mark.

And with all of this there is a heightened sense of urgency. We must not fail.

To add insult to injury the current custodial management have done everything they could to eliminate any and all competitive choices to run the industry. Theirs has now failed and I suspect they will undertake 2 possible directions. They will either continue on in a lame duck fashion, irrespective of the consequences of more time wasted. Or abandon ship. Either way this further constricts our actions.

It has been my experience in the past 10 years that the management have abandoned ship far to often. The floor of "corporate responsibility" has been established by these managers. There seem to me that there is nothing left but the shouting and finger pointing to occupy management's so precious of time.

So what should we do. Our first priority is to establish the revenue streams that are necessary to support the users and developers in the Preliminary Specification. (See the proposed budget and charter.) For it is "different this time". The last great turning was 1929 to 1941. We were at war for much of this time, a war that mitigated the negative economic effects of the turning. It was also a time in which we had barely begun to leverage the use of oil. A leverage that stands at 18,000 man hours per barrel of oil today. And it was a time when businesses, industries and societies pace was dictated by the speed of which paper physically moved, we no longer share these luxuries of our past.

We therefore face two crisis.

1. The declining reserves and production of the oil and gas industry. (Peak Oil)
2. The credit crisis / turning.
   

Living through only one of these crisis has the capability of moving society within inches of hell. Two crisis provides us with a much higher probability of reaching that unwanted destination. Expecting anything from management to mitigate the potential of these crisis is foolhardy and dangerous.

Join me here, and lets restore this industry, brick by brick and stick by stick to its full potential, or face the consequences. If we expect anyone, or specifically management, to do this for us, we will have indeed failed. As of today, we now have no one to blame but ourselves. If you know of an investor or government representative to help establish our revenue streams, please send them the URL to this blog and encourage them to join us here.

Technorati Tags: People's Call-to-Action Funding Management Vision

Following up on Sun.

Yesterday's post commented briefly on Sun Microsystems software, hardware and service offering. Sun published their HPC (High Performance Computing) newsletter, and here are four excellent articles from that publication.

First is Sun co-founder Andy Bechtolshiem talking about the building of "commercial" grade systems for "cloud" computing. Andy makes the comment that he spends more of his time on physics these days. Bechtolshiem always provides fascinating talks.

Second is another pertinent article, "Big Data Changes the Rules," regarding this software development project. Recall the Technical Vision that is a key part of this application. How it predicts a data Tsunami will provide key competitive advantages to those in oil and gas that can manage and use this data. The article notes some of the details of how the unsuspecting oil and gas firm may have difficulty with these data volumes.

The third article is an interesting read on how Sun's network.com is being used in innovative ways.

Lastly a comparison of MySql database vs. Oracle. Our choice of database is to use MySQL since Sun purchased the company. This now provides us with a one system vendor solution for all our needs. SPARC chip-set, Solaris Operating Systems, Java and Databases are proprietary technologies of Sun. No more finger pointing as to who's fault it is.

Technorati Tags: People's, Sun, Vision, Strategy, Software,

Topics of discussion.

One point that most users will be able to identify with is the recent focus of the industry. For the past year the focus has been on reserves, its land base, its production forecast, how difficult and expensive it is to produce oil and gas, and occasionally the retirement of the brain trust in the next 5 - 10 years. Any topics outside of the realm of these points of discussion is never raised. What about the systems, administration and management of the industry? Are these disciplines no longer considered a part of oil and gas? Is it through the neglect of these areas that is the motivating factor of the need for the People, Ideas & Objects application? Or is this just the natural evolution of the industry to focus on its key value added areas?

When you think about it, the topics of discussion of the industry are the most serious that they've faced. And the most demanding in their 140 year history. The magnitude of the problems and the seriousness of the issues requires 100% of their focus. Is it any wonder that many areas of traditional concern are falling off the table? I don't think so, and I would suggest the responsibility for action will fall on a different group to provide the systems, management and administration. And as we move forward the Users will become the leaders of this new service industry.

It is clear to me that the Users must be the lead in the development of this application. They're the only ones that collectively know how the industry operates. To preclude them from development would render this software quality down to that of SAP's and Oracle's. But there's more then just that. In the future what will the role of these users be in the oil and gas? What I'm getting at here is that People, Ideas & Objects application is the beginnings of a new User-driven technical support industry. Where the Users build their own software, manage and administer the day to day in oil and gas, and provide these critical resources as part of their service offering.

The current focus is not likely to change, and the earth scientists and engineers are off busy with their reserves, land, and production problems. They will need this new service industry to rely on, and will willingly pay for it. The number of people employed is very small for an industry that is in the ballpark of $4.5 trillion in revenue. Over the lifetime of the oil and gas business, the General & Administrative costs have been around 5% of the total. Is it reasonable to assume that this new industry we are talking about is a $225 billion in revenue? I think so, join me here.

Technorati Tags: People's, User, Vision, Productivity,

Google IPv6 2008 Conference

IPv6 is a cornerstone of the People, Ideas & Objects technical vision, and a critical component of the Draft Security & Access Control Module specification, and for that matter the entire People, Ideas & Objects application. Google held a 2008 IPv6 Conference and have posted several videos of it on YouTube. (Here, here and here.) The last video of the series provides a question and answer forum that is moderated by Google Vice-President Vint Cerf. Vint Cerf is the individual at arpanet that decided on the 32 bit addressing space in IPv4. Additional representation from Google and Cisco and many other vendors discuss some of the issues, opportunities and desires of this future technology.

An interesting comment about the Apple product line was made by one of the commenter's. Noting that Apple was implementing an inside / outside type of thinking that is inconsistent with the IPv6 protocol's. All Apple hardware and software are IPv6 capable until the user turns it off. As a result you are able to use the technology, for yourself, with the full advantages of IPv6. IPv6 is about peer to peer networking and the elimination of the client-server mindset. Apple's products provide a work around where you can view the screen on your home computer at your work, or anywhere you may be in the world. This is done through making a gateway out of their wireless, and hence making the commenter's point temporarily valid.

The second video has the Cisco Technology Product Manager Patrick Grossetete stating "There is no reason to make an application that doesn't use both IPv4 and IPv6 today." It is my opinion that most of the applications operating within the oil and gas industry are not IPv6, and I can say this as most of the applications currently in oil and gas are unaware that their is a network outside of the Intranet in which the operate.

Why is IPv6 a cornerstone of the People, Ideas & Objects technical vision? IPv6 enables 2 to the power of 128 addressing, enabling every device made and ever to be made to have its own static IP address. Enabling the device to be monitored and controlled. Innovation of earth sciences and engineering disciplines are sciences that deal with time, pressure and temperature. Things that can therefore be controlled and monitored. What better way for an industry to have to make this change then through a dedicated software development capability, such as People, Ideas & Objects is offering.

Technorati Tags: People's, Vision, Change, Development,

A user vision.

This next week I want to continue to discuss what a successful software application needs in terms of its user involvement. Without extensive user involvement you end up with applications like SAP. This next week, I hope to explain a lot of what, where, why, who, when and how a user will work in the development of this software application. I also want to appeal to the people that want to do something about the current slow pace of recognition of this looming Peak Oil crisis. Those people that know we have to change, but also know that change has to be planned, and software built before we make any changes to the organization. If we ignore the fact that software defines the organization, any changes not supported in the software will render us to use manual systems.

I will start this week with a summary of the overall user vision of this application that will be built here at People, Ideas & Objects. With that in mind lets begin by stating some of the ways that I see that work may soon be carried out in the oil and gas industry.

...Mandatory attendance at the office for working hours has quietly faded into the background with not much management friction, or heavy pushing from those that have benefited from the elimination of long commutes. Anytime there is a meeting, they appear to be sporadic events that just seem to happen, and most of them being virtual. Face to face meetings almost never happen at the office but at a restaurant or Starbucks. The times where an office is required is usually for large groups using conference and meeting rooms. The downside of this is that work may happen at any time of the day, but most of it easily schedule-able within your calendar.On-line use of the systems developed by People Ideas & Objects helps to collaborate with all of the people that are gainfully employed in the industry and have access through the system. The management, administration and commercial areas of the industry are managed through the applications interface. Years ago you may have been doing production accounting related work which required you to report the production from one facility. Now most of that work has been automated and your job has evolved to where your specialization requires that you interact with any and all producers / owners with production from the sandstone formations of the early Cretaceous period, your teams specialty. Your last "job" was in production accounting doing administrative work and your current role has 20% of those elements but on a much larger scale and volume of data. The engineering and systems related elements of your work make it unique and diverse, depending heavily on your background, education and training. Oddly enough the math and statistics courses you took are the skills that are most heavily relied upon during the day.

Working mostly in the U.S. and Western Canada, your contacts are mostly virtual and you frequently collaborate with your clients, the partners / investor in the energy assets, and the members of your team. Your primary responsibility is the validity of the systems algorithms used within the People, Ideas & Objects systems for the facilities in your specialty. Ensuring they are consistent with the agreements requirements for production, revenue and cost allocation. You are joined by many of your teammates who work with you to ensure the processes you are responsible for are operating correctly. Your team consists of yourself, an engineer, and a software developer, and you have reviewed a proposed methodology of production allocation based on the co-mingling of production from the Cardium zone. A proposal from another investor group that needs to process their production through a facility your investors own. This has been contentious with the work attempting to strike an agreement for the methodology of the production distribution.Your work largely consists of a number of processes that validate much of the automated processes of reporting for the facilities. Data and information that you work with mostly consists of a variety of graphs, charts and statistics that summarize and highlight the areas of concern and / or opportunity. Your toolbox also consists of many forms of rich media where audio and video presentations and documentations are used to discern the desire of the clients, and enable your team to learn about the new and innovative ways that the facilities are changing. Your report to your clients regarding the new production from the outside group will consist of a summary of the historical production history and net income. And, what could be expected from the facility on a go forward basis if there were no changes. These pro-forma reports are compared against a number of scenarios that the new investor group has expressed interest in, and deemed acceptable. These different scenarios have been used to calculate the differences from the most recent reserves information. It is your recommendation to the ownership group that hired you that the economic externalities have predominately fallen in their favor and they should proceed with alternate B. Adoption of the teams' proposal is made and the new production begins to be processed. You and your team work to have the system amended to reflect the new changes, and your processes updated to reflect the new agreement. You then move on to your next assignment where your team has been asked to evaluate the effectiveness of a CO2 capture and injection scheme for another ownership group.

The key points I wanted to highlight is the lack of fixed office locations, the hyper-specialization of a team's work, and the time of day in which the work was done. How the rich media would be used to communicate concepts quicker and more effectively then with text, and the statistical and graphical representation of data was necessary to eliminate the overwhelming volumes of data. Also how the team was comprised of cross-functional teammates with their own specific skill set. And lastly how they moved from different ownership groups based on their specialization of certain categories of hydrocarbon bearing zones.

I will try to add more to this vision in this next week, but I think that most people would generally agree that it is plausible that these types of activities would take the industry to the next level of performance. Those of us that know the bureaucracies are "sleep walking" through this looming crisis can see the value in developing this software. This next week I will take the opportunity to consolidate the discussion of modules, transactions and boundaries of the firm, and specify exactly what I foresee a user will define what will be done in this development. Lastly, I want this week to be the beginning of an appeal to the community of like-minded thinkers at the Oil Drum, Association for the Study of Peak Oil and the Energy Bulletin.

Technorati Tags: Gensey, User, Vision

Another perspective

The keynote address at the 2007 Influence Conference was presented by ICANN CEO Paul Twomey. ICANN (Internet Corporation for Assigned Names and Numbers) is defined on their website as;

ICANN is responsible for the global coordination of the Internet's system of unique identifiers. These include domain names (like .org, .museum and country codes like .UK), as well as the addresses used in a variety of Internet protocols. Computers use these identifiers to reach each other over the Internet. Careful management of these resources is vital to the Internet's operation, so ICANN's global stake-holders meet regularly to develop policies that ensure the Internet's ongoing security and stability.

ICANN's role is interesting due its focus of being the naming conventions and their assignment. More or less a quasi street light architect / traffic cop. A rather limited role, however, as noted in his keynote; he sought out to provide a number of answers to some important questions regarding the future of the Internet.

Here is a comprehensive summary of Twomey's comments during his keynote.

"While it’s difficult to be definitive about the future, here are some things I think we can expect:"

• Usage of the Internet will be limited only by access to electricity. As many as 3 billion people may be able to enjoy a truly global Internet.
• Many, perhaps most, will access the Internet by using mobile devices.
• We’ll see a very significant increase in broadband access (over 100 mb/sec indeed up to 1 gigabit per second). Many developing countries such as Morocco, China and Malaysia are adopting accelerated broadband distribution programs to deliver the Internet to their citizens.
• A machine-to-machine Internet will overtake today’s person-to-person Internet.
• We will see billions of Internet-enabled appliances at home, at work, in the car, and in the pocket.
• Third parties will use the Internet to monitor all sorts of activities and utilities — from washing machines to cars to electricity meters.
• Geo-location and geo-indexed systems will be much more common and emergency services will be more precisely dispatched.
• There will be significant improvement in spoken interaction with Internet-based systems.
• We will see an even wider array of delivery methods for intellectual property (movies, sound tracks, books, and so on) than is available today. VoIP will be prevalent and SIP may be the principal protocol means by which calls are set up. Voice communication will be essentially free, except perhaps for calls that terminate on traditional PSTN devices including mobiles.
• Almost no industry will be offline since most will rely on the Internet for customer interaction, customer discovery, sales, service, advertising, and similar activities.
• Group interaction and collaborative support tools — including distributed games — will be very common.
• And last but certainly not least, internationalized domain names and new gTLDs will open up the Internet to much more multilingual content.

"What will you be able to do in the future that you can’t do now? Here are a few examples:"

• Manage your appliances and home security systems through online systems.
• Use your mobile phones as remote controllers.
• Download videos, music, and books as an everyday practice. Video on demand will focus on watching previously downloaded video rather than watching streaming, real-time video. This is really just an obvious extrapolation of the iPod/TiVo paradigm.
• You will be able to talk to the Internet itself to search for information and interact with various devices — and it will respond.
• Search systems will be more precise because meta-tagging of information will have become more common. This is part of the semantic web movement.
• Maintenance histories of products that can be serviced will be keyed to radio frequency IDs or bar codes associated with the devices. This is one potential use of Internet Protocol version 6, or IPv6, which is the natural extension of the original IPv4.

"What will the technical underpinnings of the Internet look like by then?"

• Terabit per second local networking will be available as backbones for local networks.
• The domain name system will operate in multiple language scripts. Again, a result of deploying IDNs and new gTLDs.
• IPv6 will be widely deployed, once the technical and financial issues have been worked out.
• Better confidentiality and authenticity will be provided through the use of a public key crypto. This will provide more authentication all along the network.
• Much more inter-device interaction will be common, incorporating position location, sensor networks, and local radio communications.
• Spam, phishing, and various forms of denial of service attacks will continue a cold war-style arms race with defenses and better authentication techniques.
• Operating systems will continue to be troublesome sources of vulnerability.

There should be no confusion: broadband speeds required to participate in the internet in 10 years time will be measured in the 100s of megabits per second. Indeed network planners in South Korea are now moving households to 1 gigabit connections today.

Why is the appropriate approach to broadband so important? It is because the Internet will continue to represent a massive and accelerating force for the reduction of transaction costs across the global economy, and a force for unprecedented innovation in the delivery of private and public services.

Clearly we see many of these same opportunities for companies and people. The last point I have highlighted in italics is clear recognition that the direction that this blog and software development proposal are consistent with others perspective and vision. Transaction costs are best handled in markets. Markets, due to their (primarily) contractual nature, increase transaction costs. Information Technologies reduce transaction cost friction to their lowest level. People, Ideas and Objects will bring these technologies to the energy industry.

Technorati Tags: Genesys, Ideas, Vision

They're here...

Sun Microsystems Sunspots and Intel Motes.

To help in understanding the impact of the technologies that are to be introduced through this software development project, I have created a vision of why certain technologies will have a dramatic effect on the people operating in the energy industry. This vision encapsulates four key technologies, Objects, IPv6, Asynchronous Process Management and Wireless. I have written in detail about these technologies here, here, here and here. These four technologies enable a proliferation of devices to be connected to the Internet for data capture and remote control. What could be developed in these devices is limited to the imagination of the people that are involved in the oil and gas industry. A world with these types of devices needs to be approached differently in order to capture the volume of data, information and control that will be available.

It is this vision that is captured in Sun Microsystems "SunSpots" programmable, experimental gadgets to test and implement in new and innovative ways. From my point of view this is the beginning of the ability to develop new and interesting devices that will help increase people's and producers productivity.

We've created a platform that greatly simplifies development and experimentation with small wireless devices, and we've opened it up to the development community, said Roger Meike, research director for Project Sun SPOT. There will be tremendous opportunities to apply and expand this technology in all sorts of new and exciting ways.

Why would these SunSpots and Motes be used in oil and gas? Time, physics, pressure, location, and temperature just to name a few classifications of the many possible reasons. Soon these devices will be certified for RoHS (Restriction of Hazardous Substances) compliance. How many of these types of devices will be embedded in the operational day to day of an oil and gas producer? How many of these remote devices will be involved in the process of commerce, or more specifically the beginning, middle or end of a transaction? How will the limited human resources involved in the industry manage with this level of data and information? And who will be the first to employ these devices in a commercial setting, the producer, investor or user of the software development capability that I write about in this blog?

Technorati Tags: Genesys, Sun, Vision, Capabilities

Energies importance.

I have a very interesting paper that is being published today. The paper is entitled

"Special Report: On the Precipice: Energy Security and Economic Stability on the Edge."

By Daniel L. Davis

July 17, 2007 (Click on the title of this entry to downlaod the .pdf)

This paper is unique in that it is written by someone who only has an interest from the point of view of how the lack of energy may affect people. Being that he is a Major in the U.S. military provides him with really little first hand knowledge of the energy industry. What prompted him to start researching and writing this paper is unknown, but it he does a spectacular job in framing his concerns, concerns that should be shared by all. In the final part of his paper, Major Davis reflects on many of the governmental failures that have occurred in the 21st century. How these failures reflect that in today's environment there is little in terms of warnings, and if you choose to ignore the warnings, the results can be catastrophic.

I will highlight the key points in Major Davis' paper and tomorrow will have a quick report on the National Petroleum Committee's report.

"That's why it is so critical that we recognize the potential scale of the problem today and take immediate action. As pointed out by Dr. Hirsch, if we begin taking action before the onset of the peak, the damage done and the pain incurred will be mitigated; if we fail to act until production at the wellhead announces the decline has begun, the pain endured will be markedly worse, and the risk of global instability will increase to a dangerous level. Dr. Hirsch clarified the scope of the problem in remarkably clear but sober terms in his February 2005 report when he wrote: p. 17

Mitigation will require an intense effort over decades. This inescapable conclusion is based on the time required to replace vast numbers of liquid fuel consuming vehicles and the time required to build substantial number of substitute fuel production facilities. Our scenarios analysis shows: p. 17

• Waiting until world oil production peaks before taking crash program action would leave the world with a significant liquid fuel deficit for more than two decades.
  
• Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
  
• Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding world liquid fuels shortfall for the forecast period.
  

The obvious conclusion from this analysis is that with adequate, timely mitigation, the economic costs to the world can be minimized. If mitigation were to be too little, too late, world supply / demand will be achieved through massive demand destruction (shortages), which would translate to significant economic hardship. There will be no quick fixes, Even crash programs will require more than a decade to yield substantial relief." p. 17

"If we are hit with a peak flat footed, having taken none of the mitigating measures recommended in the Hirsch reports, the cost to the United States will be extraordinary by any measure." p. 17

"The Logic for Action"

"No serious scientist, geologist or economist believes that the cheap crude oil upon which our society runs will last forever; all believe it will someday end. Since it is clear that an effective transition will be measured in decades, given that all agree the world has pumped approximately on trillion barrels of oil from the ground thus far, it is an imperative that we begin immediately to analyze, conceive, and then implement a plan to transition to alternatives before being forced to do so as a result of a supply in terminal decline." p. 17

"Impediments to Action"

"In a telephone interview Dr. Campbell made a point to clarify an important fact covering his projection of a 2010 peak: "There's only on thing I can tell you with certainty regarding my assessment: it's probably wrong! The question is, by how much. He explained that because there exists no globally enforceable single standard for reporting individual reserves, each nation and / or oil company is free to choose their own definitions of what they report, and to report whatever numbers supports their economic or political purposes." pp. 17 - 18

"Compulsion for Action"

"After playing out three disruption related scenarios, the group arrived at two key conclusion. In the 2005 report summary Dr. Gates wrote:" p. 20

"First, the economic and national security risks of our dependence on oil - and especially on foreign oil - have reached unprecedented levels. The threat is real and urgent, requiring immediate and sustained attention at the highest levels of government.

Second, if we wait until a crisis occurs to act, the nation will have to few, if any, effective short term remedies. To protect ourselves, we must transcend the narrow interests that have historically stood in the way of a coherent oil security strategy and implement policies that will meaningfully address both the supply and demand aspects of our current oil dilemma." p. 20

"This study was not conducted by some fringe group or obscure participants: it was carried out by individuals with premier levels of education and direct experience serving the government at the highest levels. And yet, despite their stark warnings of our country's vulnerability to reductions in oil supply and their clarion call to action, two years after the publication of this report nothing has been done. Whether the drop in supply comes as a consequence of disruption above ground or as a result of declining supplies below ground, the result on the global economy is the same. It is beyond question that immediate action to mitigates this vulnerability is require. But as hard as it might be to imagine, the threat to the economy may not be the greatest danger we face." p. 20

Dr. Gates of course being the president of Texas A & M, one of the premier engineering schools in the world, and is now Secretary of Defence.

"Unexpected Danger"

"But there is one other significant issue to take into consideration when contemplating the impact of a terminal decline in fossil fuels: the danger to food production." p. 20

"But in fact, without petroleum, we would only be able to produce a fraction of today's crop yields." p. 20

"The report begins by explaining that from the settlement of the US until the 19th Century, virtually all increases to crop production came as the result of increasing the cropland used. But of the quadrupling production since then, it states:" pp. 20 - 21

"As manufacturing developed, production of chemical fertilizers like super phosphates and, later, urea and anhydrous ammonia replaced most fertilizers produced from recycled wastes. Commercial fertilizers provided low cost nutrient to help realize the yield potential of new crop varieties and hybrids (Ibach and Williams,1971). Since 1960, yields per unit of land area for major crops have increased dramatically. For example, average corn yield has increased from 55 bushels per acre in 1960 to 139 bushels in 1994 and average wheat yield from 26 to 38 bushels per acre. If nutrients were not applied, today's crops would rapidly deplete the soil's store of nutrients and yields would plummet." p. 21

"The nutrients cited in the foregoing are almost all petroleum derived. The importance of those inputs was made even more clear in an updated version of the USDA publication in 2003." p. 21

"Large shifts occurred in particular inputs over 1948 - 96. Although intermediate inputs (fertilizers, pesticides, energy, feed, seed, and livestock) as a groups increased 1.42 percent per year over the period energy inputs increased less than 0.9 percent while pesticides increased at nearly 5 percent per year. Synthetic pesticides were just beginning to be used in the late 1940's, but adoption occurred rapidly, and by the early 1970's most acres in major crops were being treated. total pounds of pesticides applied peaked in the early 1980's, and have been relatively stable since then." p. 21

"It is crucial to note that energy inputs increases almost one percent per year, and pesticides increases an average of 5% per year for the 48 years of the study. What would happen if those inputs were suddenly curtailed one to two percent per year? What about a decade later when they were reduced 10 - 20%? 40 - 50%? The 1996 report explicitly stated that if the inputs were not applied, "yields would plummet." When we likewise consider the compounding issues like the impact of decreasing fuel supply to power the irrigation pumps - or fuel for the tractors and combines, the for transport rigs, the delivery trucks, and other declining - fuel supplies issues - it becomes clear that food production would become severely crimped by declining oil production. To further compound the situation, while the production of crude oil declines, the population will continue to rise." p. 21

"Population Effects"

"Consider that from the year zero until 1850 the global population increased from about 300 million to 1.5 billion – an average increase of about 65 million per century.59 From 1850 to 2006, the increase was from 1.5 billion to 6.5 billion – an average of 32 million per year. But in just the 12 years from 1987 to 1998, the population increased from five to six billion for an average of 83 million per year, or 18 million more than previously increased in a century."

"As seen on the below graph,60 the global explosion of population since 1900 has roughly tracked the rise of the oil age, and since the mid 1980s, has exactly mirrored the growth in crude production. Why are these facts significant when discussing peak oil? Because far and away the primary driver for the “Green Revolution” have been its petroleum-based inputs; without these inputs it would be impossible to generate the volume of produce per acre of ground we currently enjoy. If petroleum inputs decline, so too will the ability to produce food, and at a correlation comparable with the ascension." pp. 21 - 22

"Next, notice the graph below depicting the oil depletion curve presented by Dr. A.M. Samsam Bakhtiari, former senior executive at the National Iranian Oil Company, at the International Oil Conference in Copenhagen, Denmark on December 10th, 2003.62 Particularly note the barrels of oil projected for the year 2020 – approximately 55mbd. Now look back up at the World Oil Production and Population graph, and read down the right hand column and find 55mbd, which last occurred in 1985. Next read over to the left hand side of the graph to ascertain what the population was the last time the world saw production of 55mbd: approximately 4.75 billion. Again, note that from 1985 through 2006 the line of population increase and million barrels per day of oil production have been virtually identical. Now lets look forward again to the year 2020." p. 23

"Dr. Bakhtiari projects global production of 55mbd in 2020. Looking back to the UN population projection for the same year we find the expected population is 7.5 billion people – three billion more people to feed as the last time the world produced this amount of oil. I chose this model to demonstrate (though there are many others with similar projections) because of the location of the peak: the year 2006. When one considers that in 2003 Dr. Bakhtiari predicted that the peak would occur in 2006 and at approximately 83mbd – and then combined with the fact that since June of 2004 global production has plateaued at approximately 85mbd63 (more on that in a subsequent section) – his projections of future production must also be given serious consideration." p. 23

"While these facts portend a dire future, a bit of encouragement might be in order: man’s capacity to solve challenging problems. As has been the case since the dawn of mankind, when faced with overwhelming problems, man is capable of great feats: there’s nothing like the prospect of one’s death to focus the mind. There is little doubt that when the reality of the decline of oil begins to soak into the public consciousness, the best efforts of our finest minds, national governments, and billions of dollars of investment will materialize and mitigating solutions will be found. However, even the good news is tempered: the longer we wait to begin that intensive effort and significant investment, the narrower the gap between discovery of the problem and the onset of its consequences." p. 25

"The IEA now expects demand for oil to rise by 1.7 m barrels a day this year compared to last year – an increase of about two per cent.”69 But as shown on the above graph, there has been no increase for almost three years." p. 26

"Less than a month later another Financial Times article reported that a combination of tightening supplies and faster-than-expected depletion in existing fields was causing alarm among many in the oil industry. “In its starkest warning yet on the world’s fuel outlook, the International Energy Agency said ‘oil looks extremely tight in five years time’ and there are ‘prospects of even tighter natural gas markets at the turn of the decade’. The IEA said that supply was falling faster than expected in mature areas, such as the North Sea or Mexico, while projects in new provinces such as the Russian Far East, faced long delays. Meanwhile consumption is accelerating on strong economic growth in emerging countries.”69.4 If demand is increasing faster than expected, supplies are being used up quicker than predicted, and existing oil fields are depleting faster than predicted, it is possible the peak of oil may already have been reached." pp. 26 - 27

"The oil majors (ExxonMobil, Shell, Texaco, etc) do not have to view this process as antagonistic to their interests – though they presently do." p. 29

"Conclusion"

"The consistent factor in all the above was the inability of Government officials at all levels to properly assess the seriousness of the issue when time was available to take appropriate action. Had FEMA Director Michael Brown realized the magnitude of the problems associated with a Category 4 hurricane plunging into New Orleans, he would have mobilized his assets much earlier, in larger volume, and more quickly after the storm than he did; Had George Tenet really believed that Al Qaeda was preparing an attack within the United States, he would not have remained silent when Condoleezza Rice allegedly ignored his warnings; had Donald Rumsfeld listened to those that predicted the US would not be welcomed in 2003 Iraq as liberators but rather opposed as occupiers, he would have put a great deal more effort into Phase IV planning and an entirely different outcome might have played out." p. 30

"But in all cases, key officials grossly underestimated the gravity of the impending problem, even when credible information was given them that argued to the contrary. We are in just such a situation now." p . 32

"Presently there is sufficient information available warning that a problem exists, but too little detailed information upon which decision-makers could act. It is critical, therefore, that the recommendations to conduct detailed analysis previously cited be initiated immediately. We must have the most qualified experts in various fields ascertain the consequences that would occur if the global supply of crude oil began to decline as a result of depletion. Only if our leaders – and the American people – are armed with facts and information can we make the rational decisions necessary to prepare for what lies ahead." p. 32

"It is a documented fact that we failed in adequately preparing for the September 11 attacks; we failed in adequately preparing for the Katrina hurricane; we failed in our appreciation of the difficulty of post-war Iraq: we can not fail to prepare for post-peak oil." p. 32

"In closing, I include the following quotes from two reports issued this year; the first from the latest of the three Hirsch Reports, and the second from the GAO. Both of these reports will be useful to the post-peak commission that will be formed to determine how we so badly missed the warning signs before the onset of the peak. These two reports will be used as evidence that reports were conducted, measures recommended, but no action taken:" p. 32

"Hirsch 2007: It is our sincere hope that readers will look beyond the conflicting forecasts and focus on the consequences of underestimating the enormity of the peak oil problem. Effective mitigation means taking decisive action well before the problem is obvious." p. 32

"GAO 2007: While public and private responses to an anticipated peak could mitigate the consequences significantly, federal agencies currently have no coordinated or well-defined strategy either to reduce uncertainty about the timing of a peak or to mitigate its consequences. This lack of a strategy makes it difficult to gauge the appropriate level of effort or resources to commit to alternatives to oil and puts the nation unnecessarily at risk."p. 32

This leads me to think that if Major Davis can see these points, how come Daniel Yergin can't?

Technorati Tags: Genesys, Failure, Peak-Oil, Yergin, Call-to-action, Vision

Enterprise search and security.

In the User Vision I noted the ability to search the domain of the user. A far easier thing to say then it is to do. Consider for a moment the number of companies within the industry. Consider the number of Joint Operating Committee's (JOC's) they participate in, and then consider the number of users that will be involved in preparing and using corporate data. Access to the user's domain when they may fulfill different roles in different JOC's for different client companies, one begins to see the issue regarding their ability to search for their information.

The idea that search and security would be linked would have seemed oxymoronic a few years ago. How could search maintain and build upon the security of a Service Oriented Architecture (SOA) such as the one being written about in this blog. Firstly the top priority of any development and operation of any application of this type is the quality, integrity and security of the data that is being used by producers and users. At the same time search will become an indispensable competitive tool for any oil and gas producer. Access through extensive, state of the art search technologies is a critical requirement for the oil and gas producer and user. Another critical issue is the users expectation of near single shot relevancy being provided by search giant Google. A little review of the features of the technological architecture as it is proposed here is as follows.

Authorized access will be granted to users through the world wide web. Recall that the use of a private network using IPv6 provides enhanced security that is inherent in the protocol. The producers will also access their applications from the Grid that is owned and operated as a service by Sun Microsystem. Hosting of the Genesys application by Sun provides a level of third party reliability and security that is necessary for the application. Genesys will focus on research and development of systems, not compete with Sun on infrastructure.

Each producer will have a virtualized Solaris environment on the Grid, Ingress Open Source Database Instance, and Genesys Application Server all operating side by side with other producers, possibly on the same processor. This will provide, and it stands to reason that firewall and other security requirements are already in place, each producer will access their, and only their application and data. In addition each virtualized environment will have a Google Enterprise Search Appliance maintaining the access, control list, search security, and search index's. Information about Google's Enterprise Search Appliance can be found here, and their Enterprise blog here. Information on Sun's virtualization of Solaris is here.

Deciding between money, time, and / or quality, as with any system development you are entitled to two of these objectives at the expense of the third. In the case of search security, and security in general time and quality will be at the expense of money. Although the Solaris user and Ingress user accounts are free as they are open source, they do command large fees for services of operation, the Google Search Appliance is also relatively expensive.

I found a website and consulting firm that has dedicated themselves to enterprise search and security. Idea Engineering have a newsletter that provides the necessary discussion of many of the issues companies will need to address in the future. I am highlighting a series of articles they wrote in a series of newsletters that provide value for the readers here. The series of articles are here, here and here.

A couple of the assumptions that I am operating under should be stated explicitly. We have design freedom in terms of how the application is built. Secondly, we have the cost of 1 Million Instruction Per Second (MIPS) of processing power is now $0.01 (processor costs only), enabling intense, yet affordable processing capability. Think encryption, virtualization of each producer each employee, heavy and multiple indexing algorithms and access control lists, processing demand will be very high. Add the unique perspectives that are part of this blog like Military Command Structures, Single Sign On (SSO) which is a necessary feature.

Lastly the manner that I see this application being built is through the ultimate users. What I would like to see happen is that a discussion around these points fill in some of the detail and ferret out the finer points and issues. It is the users application and their involvement is being called on for this critical issue.

Technorati Tags: Genesys, User, Vision, Data, Search, Security

What its all about, the user.

The title of this entry will take you to Professor Andrew McAfee's recent entry on Enterprise 2.0. Downloading a .pdf entitled "The Future of the Web." In the document Professor McAfee makes the comment

"You can bank on a ten fold improvement in the cost and capability of collaboration technologies over the next five years. What will your organization do with that?" pp. 2

A very good question, and one that should be foremost in the minds of most Users today. This entry is an attempt to provide a User Vision that can help in defining the answer to this and other difficult questions about the work of the User.

The Future of the Web

In preparing what will become a new proposal to the 135 producers, I am noting very limited differences in the applications requirements. The dropping of heavy oil from a mining point of view is the largest and most significant change. I can't help but think that something is missing from the proposal. The "thing" being an overall vision that this project has. I have attempted to develop an overall vision in the past six months, but I have not been able to quantify and qualify it. The problem this presents is I am missing the most important component of how I see the "User", as they are mostly described in this project. Both in terms of how they are involved in the day to day of the building of this software and how this software impacts the users day to day needs. Therefore this entry is to present a user vision of this project, and as a precursor to making an overall vision. When combined with the technical vision that I have put up here, these two visions should help to understand better where I think we are heading. The final vision will contain many of these specific visions.

I have presented a Technical Vision based on IPv6, Java Objects, Wireless and Asynchronous processing. The Technical Vision helps to identify the development needs and the engineering and geological possibilities. This User Vision will provide an understanding of how I foresee the Engineers, Geologists, Administrative and Management staff do their jobs and participate in developing great software. First I will need to provide some understanding of how a few technologies will be implemented and how the users will interact with them. The technologies are the "semantic web", "enterprise search" and "end-user" tools.

It is easiest to see the end user tools that will be developed within this application. A few variations exist and are good examples of what users will interact with the Genesys system. Firstly these are analytical tools that are provided to the user based on their understanding of the organization, its assets and the data provided. Genesys is a system that provides the back end processing and transaction management to run a company with interests in several JOC's. What should be a standard level of processing and reporting would be provided, however, the ad-hoc query and special interactions that users will want to determine at any time will be developed. These are provided through end user tools that will be derivative of the thinking that these four tools provide. The four tools are Swivel.com, Yahoo Pipes, Teqlo and Trendalyzer.

End user tools

Swivel
"A place where curious people explore all kinds of data." Upload your data and compare it and graph it to a variety of other data sets. Swivel is providing users with tools specifically to do those tasks, and to collaborate with people of other data sets.

Yahoo Pipes
One of my favorites, a place where you can automate some of the web for you. Expect many tools to be developed and provided of this calibre and quality. Google does this by publishing their API's (Application Programming Interfaces) to those that can use them.

Teqlo
"A Mashup Platform for everyone else", a similar tool to Yahoo Pipes but more powerful. The problem with teqlo is too many of what I call Ajax memory leaks (runaway processes) and too many requests for passwords and personal information that should not ever be given out.

Google Trendalyzer
As I indicated on Friday Marissa Mayer of Google announced Gapminder had been acquired by them for their Trendalyzer tool. Looking at raw data will become a rare exception. Analysis and tools such as these have to be put into the hands of the users so that they can interpret and develop meaning from them. This point is well put across by Ms. Mayer's comment.

Gathering data and creating useful statistics is an arduous job that often goes unrecognized. We hope to provide the resources necessary to bring such work to its deserved wider audience by improving and expanding Trendalyzer and making it freely available to any and all users capable of thinking outside the X and Y axes.

I would encourage readers to have a good look at each one of these tools and get an idea for what a productive user will be able to do with the data, transaction processing, and statutory reporting taken care of, as is proposed here in Genesys.

The semantic web

The semantic web as an interface. The next component of technology for helping to understand the user vision is the semantic web. This will be by composing simple queries to the web in much the same way a Google search currently provides. The difference will be the syntax that is followed and the results. The syntax is "subject, predicate, object". Further research is recommended for readers of the W3C website. It is a difficult concept to understand in a quick manner, and W3C does nothing to make it easy. However, data sets can be further described by associating names, labels or attributes, which is the correct term. Once these data sets have their attributes, the syntax can be used to discern meaning (the semantic part of this) that could be quickly adopted into something like Trendalyzer. The User could then apply some of their engineering, geological or management science too.

Search capability

The best description that I can come up with to describe search is that it is the closest thing to artificial intelligence that we now know. Artificial intelligence (AI) is not robots or computers that are equivalent to humans in their thinking. AI is the variety of tools that help people expand their scope of knowledge and understanding. Google does this extremely well. To conduct only a simple search with infrastructure requires massive computing power to index, store, retrieve and report. These types of tools will become more prevalent to the User as AI becomes better Google'sunderstood.

The User of this proposed software will conduct a variety of searches on the data they have access too. The access too is the difficult part when we think of 1,000's of users accessing 100,000 joint operating committees owned by 1,000's of producer companies. It is fair to assume that the domain of each user will be mutually exclusive to all other users. How then can a single user access the data they have privileges for in a manner that maintains the security and access control necessary. This is a tough aspect of this system but it can be done. Google provides their Enterprise Search tools which are a combination of hardware and software, and ultimately their algorithms would work against these data sets. Their are many other companies that provide these types of searches and are specializing in this area. A simple Google search will provide the understanding that this is a big area of concern and of research by very specialized people.

The domain of a user may spread across several producers, several JOC's, and over certain time frames. The user needs accurate data and the means to extract the information that they know exists but do not need to compile a series of reports and key the values into a spreadsheet. Most users have been doing this for the better part of a decade. The problem with this is spreadsheets are notoriously buggy and have limited access and value. Even Sarbane's Oxley notes the difficulty that spreadsheets provide. Nonetheless, how the user is to impute any value from the work they do, they will need access to the data at some certain level. With the Military Command structure being built within this project, the access to certain types of data needs to be assured as to be authorized by the right representatives of the firm. All in all a very difficult task to do. The alternative is to regress to paper and control access to the file cabinets.

Always on.

This term was used to refer to the cable modems and DSL being available at all times. Not having to dial in like a conventional modem over telephone lines. Now it means something far more sinister. Always on will mean that Users are always available. Not my or most people's idea of progress but we need to understand the technology brings the problems and the solutions. In this instance the RSS feeds and Asynchronous Process Management contained within the Genesys technical vision. These two provide the user with the ability to approach their work in a more timely and appropriate manner. The screaming fire drills of when the general ledger has to be closed will become bad nightmares for most accountants. The sense of urgency for timeliness and accuracy will still exist, however, the need to drop everything and do this, and only this, will be removed from the mindset of the user.

I like to think of this blog as a good example of this latter point. My thoughts are with me at any and hopefully all times. I have readers reading this blog from all corners of the world. (Utterly fantastic!) It doesn't matter when I post, it doesn't matter when they read the post. My thoughts and the communication of those thoughts are the driving concern from my point of view. These writings will not interrupt the readers at an inappropriate time and disrupt what their doing, they will be able to approach the writing when they have the appropriate time and motivation to review them. An asynchronous time machine if you will. In order for these systems to provide value, the ability to operate asynchronously, like this blog is considered and described to be here. I think systems of all types need to quickly adopt this type of thinking. Business does not occur on a 9 to 5 basis, bureaucracies do.

Always everywhere

One of the inherent benefits of IPv6 is the ability to register every device with its own unique Internet address. If your at a Laptop computer that is registered with the Genesys application and have authorized and authenticated yourself, then access to the system, data and information will be made available to you on that Laptop no matter where you are physically. The probability that it is not you accessing your computer is too remote for the security concerns. The same would go for your phone and whatever device may be developed to connect you to the the rest of the world. The IPv6 address is unique and secure, the system can send you information and you can ask the system from those points. If your accessing the system from a public computer terminal, your access may be deprecated in some form to ensure that no access to data or information is without the highest level of security.

A different context, a different perspective.

How much of the work that people are doing is driven by the needs of the bureaucracy or external compliance. Granted the accounting requirements are a necessary aspect of the firm. But the ability to deal with the majority of the compliance should be a natural fall out of the way that business is conducted. If you drilled a well and it discovered previously unknown commercial quantities of hydrocarbons, then the results of the drilling activity more or less dictate the compliance requirements. Why not have the compliance to the regulations be handled automatically as a fallout to the entire process.

Imagine for a moment that the accounting and tracking of information as it is produced is managed by the software. You execute a drilling contract that dictates and governs the transactions between the two firms in the market place. If we are to accelerate the activity level of the oil and gas explorers and producers are we going to need to proportionately increase the accountants, lawyers and landmen? More will have to be done by each individual. Today I think that most people have difficulty in understanding how they fit within the organization and the activities they conduct provide value to the firm. What kind of job is that? A job that is so removed from the productive process such that the individual can't see the impact their efforts make on the success / failure of the firm? How are we going to achieve the demands of the marketplace for energy in the next thirty years? We need to conduct more operations in shorter time spans with faster activity levels. Adam Smith established the division of labor was the key to increasing the economic output, how are more people going to be involved in the same process in order to achieve that increased or enhanced through put.

If we then compile the headings of these sections, we can see the User Vision that is a starting point for the user to understand the purpose and direction of these developments.

The very near future of the energy industry will see Users have the tools, data and information they need to conduct their work. Increasingly these Users will participate in the development of the systems and tools they need to innovate, anywhere, anytime and to increase the productive capacity of the producers and JOC's that employ them.

Technorati Tags: Genesys, User, Vision

Engineering Systems Solutions to Real World Challenges: An Overview

This video is the first of an MIT / IBM "meta" 4 part lecture series. The purpose was cited as being that real case studies are needed to acquire the "context" from the marketplace. I am tempted to say nothing to see here, please move along. But this video's presenters are so lost they are unable to see things clearly. The video almost becomes a must view to determine what / why companies fail. The two presenters are from IBM and they are;

Ms. Linda Sanford, IBM Senior Vice President, Enterprise on Demand Transformation & Information Technology.
Dr. Irving Wladawsky-Berger, Visiting Professor of Engineering Systems, and Vice President of Technical Strategy and Innovation at IBM. (Pictured)

Both of these senior executives appeared to have the future of technology all figured out. The presentation focused on innovation and the technologies used by their company to sustain them through the near death experience that IBM incurred during the 1990's. Now that IBM has survived, that somehow alleviates them from ever having to face a near death experience again.

Some of the things that were said by the presenters were true, however, they did not seem to really understand them. They were more selling something that they did not understand or care for. Such statements as "the consumer and customer are knowledgeable and know what they want." This statement is true, just as the Buffalo ran off the cliff were well aware of the threat that was chasing them, the need to follow along should be based on a thorough understanding of the marketplace. Leadership is the key criteria that industries and Buffalo need today. Following along with platitudes and surveys will only tell you so much of the story. It is also, in my opinion, highly necessary to plug in to the academic thinking that is abundant and valuable to those that use it. The presenters believe that academia is the "last to know" and "the client business partners were where the rubber hits the road" and therefore have no desire to team with academia.

The business problem that I think IBM sees, and as Ms. Sanford frequently refers to, is how the 340,000 IBM employees / consultants keep active. Clearly selling at IBM has become a pyramid scheme that I would think most consumers of their products and services would see through. Keeping 340,000 individuals involved in the client business will soon lead to a size-ably smaller staff for IBM, hence eliminating its main business problem.

In contrast I find that the presentations made by the people at Sun Microsystems provide an understanding of where they are and where they are going. The products and services are clearly in line with their vision and they are able to articulate that clearly. I would say that Sun has the bull by the horns in terms of what the technology make up is, and where the future of computing lies. IBM hasn't got a clue.

One of the most interesting things in this video is the questions from the audience. The audience seems to be seeing much of the same "out of touch" nature of the two IBM'ers, and are asking rather pointed questions that the presenters don't catch on to. Instead they answer the question in a somewhat pious manner. An audience participant asks the question, how is it that IBM will survive and be relevant tomorrow. The answer seemed to be the survival from the near death experience taught them many things and therefore, it wouldn't happen again.

Another audience question touched on Professor Carlotta Perez' theories toward change and asked directly how does IBM jump from one wave, to another. The questioner pointedly asking what it is that makes IBM think that they will be able to manage without having the academic influences in the future. And how could a firms future death experience be avoided, without the ability to understand where the next innovation comes from. Explicitly asking how would IBM find the innovation without the influence of the academic community? Still no response from the presenters that they understood the questions.

The point that I would make regarding this is that the people who have survived IBM are now eligible, based on the age of the two presenters, for retirement. And are going through the motions to keep the company active until their pensions are fully vested. Literally, this is the only reasonable conclusion that you can see in this sad and otherwise useless video.

Professor Wladawsky-Berger stated with regard to Linux, when the market says "it's time for you to go," was the justification in eliminating AIX from the market space. Time will favor this approach for IBM. Eventually each product and service will be told by the marketplace "it is time for you to go", and they will pick up their pencils and have a healthy retirement. In thinking this, I am presented with a blog entry by Endless Innovation noting that Professor Wladawsky-Berger has indeed announced his retirement from IBM.

The presenters state they are very sensitive to the marketplace and are on course to survive. "The job of smart people is to find comets that will wipe you out and prepare the firm for the threat." IBM appear to me to be the threat to themselves. I guess the news is that IBM no longer has any smart people in the 340,000 strong base of employees, either figuratively or literally.

Technorati Tags: Genesys, Innovation, Perez