Why Sun Microsystems is our vendor.

This may be possibly one of the most important technology announcements ever made. (Click on the title of this entry for the article.) If it's not the biggest, I can assure you that it is the largest that I've seen and probably ever will. This announcement tells the current bunch running IT the party is over. Pack your bags your out the guard is changing.

Information Week reports Sun's CEO Jonathon Schwartz states Sun's vision and strategy are now focused on providing support to the start up software firm. In doing so Schwartz expressly calls his current key partner Oracle, the competition.

Schwartz said Sun is repositioning itself as a disruptive software supplier, using freely downloadable open source code to initiate relationships with developers in young Internet companies. With MySQL in its arsenal, Sun has become "an arms dealer" for the next generation of those companies, said Rich Green, the vendor's executive VP for software.

But Sun may find itself offending some communities even as it builds new ones. Oracle is an old partner that has sponsored Solaris sales to customers that want to run the Oracle database. By offering free or low-cost MySQL subscriptions, Sun is now a threat to Oracle's database cash cow. "MySQL will work fine alongside Oracle," Schwartz said in response to an InformationWeek question, "but I prefer to focus on acquiring new customers, not on the competition."

This hurts Oracle. Oracle could see the Open Source writing on the wall and launched a massive takeover of established software vendors. Sun has driven database sales for Oracle for many years. Oracle is now forced to hang its hat on the old generation technologies as the key to their sales growth.

I have documented the two constraints of a software vendor in this blog before. The constraints of code and customers motivate the "established" software vendor to sell the status quo. Change becomes unspeakable in terms of innovation or progress. Old generation software companies had to die in order for change to occur. This has been reflected in IBM's jettison of Qbyte a few years ago. So how does a software vendor compete in this new generation?

As you can imagine the business model has to change, or should I say has changed. Open Source software shows the way. The code base is never settled. It is in a constant state of development. Go to any open source project and you can select any version of the software that you like. The bleeding edge, the alpha, the beta and a few versions of the supported code base in "stable" condition. Innovation doesn't stop, how could the code? The customers demand that the software be reliable and operate as promised in their firm. Any variation needs to be addressed with very specific processes. And no two companies are ever the same. This is where the constant development model meets the reality of the installation and the software User becomes the key in the Open Source community.

To many people in the oil and gas industry, dealing with a start-up on such a large-scale project is not something they thought they would have to do. But how else can you approach such a difficult task as is faced by the energy industry as a whole. Can you continue to live with software that was conceived in Germany for manufacturers? If you believe you can then you know who to call.

Sun's Schwartz has legitimized People, Ideas & Objects as the key to the future generation of IT enabled oil and gas producers. And completely de-legitimized the non Open Source vendor. And in the process has told the Emperor he has no clothes. In my books that is a big announcement.

Technorati Tags: People's, Sun, Open-Source, Software,

Yesterday's thinking.

Cambridge Energy Research Associates (CERA) are having their annual conference in Texas this week. The CERA / IHS line that a tidal wave of petroleum is about to hit the consumer continues without much basis in fact or reality. Its been too many years of this monotonic claim of theirs to consider the message as valid.

Irrespective of CERA's message, there are those that suggest more spending is needed. I think more spending has been tried by Chevron and others, and also proven invalid. Doing more and more is rarely the right choice. Change is certainly in the air, it is important to note this point in time is an opportunity for new thinking and actions to take place.

As Einstein stated, today's problems are not solved by today's thinking. I think it is reasonable to assume that the earth sciences and engineering disciplines have increased in complexity. As the bar is raised substantially for successful oil and gas exploration and production. Eventually the structured hierarchy, which is inefficiently efficient, will prove to be inadequate to meet the needs of the science and the industry. What is needed is new forms of organization where the science can develop within the organizations, and be used effectively to produce more oil and gas. This challenge has been the key issue that has driven the writings in this blog. The research to determine if the Joint Operating Committee can fulfill this role is proven, at least academically.

The management, and most importantly the system's like SAP and Oracle, have been developed in the old "banking" type thinking of the energy industry. Invest a dollar today, and you'll receive a 10% return on almost a guaranteed basis. This thinking is a product of the excessively low oil and gas prices of the 1980's and 1990's. The business today is more science oriented then the banking orientation can comprehend. The systems that were developed in the past are designed to accommodate the governance and compliance of the SEC, Tax and Royalty regimes. Neither SAP or Oracle recognize the existence of the Joint Operating Committee. Yet the JOC is the legal, financial, organizational decision making and cultural way of the business on a global basis. If we moved the compliance and governance of the bureaucracy to the the four frameworks of the JOC this science and innovation mindset of the industry will be accommodated.

But there are more benefits to be had. With the systems that are available in today's marketplace. And the current population of oil and gas workers. We can organize in ways that have been proven time and again to increase productivity. Adam Smith's Division of Labor is based on his re-organization of a pin making shop. Smith's reorganization of the pin factory rendered 240 times the volume of pin production. Division of labor is also known as the primary method of how economies grow. Further division of labor holds the greatest opportunity for the industry to deal with the age and retirement of the workforce.

The times that we now live in are too complex to move to a new organization without the proper preparations being made. Key to those preparations are the software developments that are built to accommodate these changes. Change must first be implemented in the software, or any unprepared change will be relegated to manual systems. I am in the process of publishing the eleven draft module specifications of the People, Ideas & Objects application. This application is under development here to incorporate these ideas and opportunities.

Ludwig von Mises noted the industrial revolution was the solution to the problem of over-population. We are faced with these same problems today, and I would suggest the Information Technology Revolution will only begin when it is deemed to be the solution to the problem of over-population. For oil and gas, please join me here.

Technorati Tags: People's, Development, People, Science,

New Module's in People, Ideas & Objects Specification

I have been working on the draft specification of the Petroleum Lease Marketplace Module, which may be finished in as little as one month. A number of ideas were generated by the specification process, and two new modules have been added to the specification. Also, by designating the Accounting Voucher as a module in itself, the specification now includes eleven unique modules.

Recall that all these modules recognize the Joint Operating Committee (JOC) as the cornerstone of the business of oil and gas. These modules adopt the culture that exists today in oil and gas. And reflect what is in the legal, financial, cultural and operational decision making frameworks. These eleven module specifications embrace and extend these four frameworks of the Joint Operating Committee.

The original eight modules were specified and detailed in these blog entries here.

The two new modules that have not been mentioned before are named appropriately "Analytics & Statistics Module" and "Performance Evaluation Module". Just as many may think "what's the difference?" I would answer that the two modules reside in the differing domains of the Firm and JOC. Just as the Research & Capabilities Module and Knowledge & Learning Module are designated to the Firm and JOC. Since my next blog entry will be "A quick summary of where we are at" I will only introduce these three new modules here and follow up with the next posting.

Technorati Tags: People's, Modularity, Software, Development

Chevron's Reserves

CNN reports that Chevron Texaco's 2007 reserve replacement ratio was only 15% of production. This in spite of $12.2 billion in capital expenditures. Profits of $18.7 billion were attributed to higher prices.

I published my thesis in May 2004. It was based on the hypothesis that "The corporate hierarchical organizational structure is an impediment to progress and most particularly, innovation." and to "Determine if the Industry Standard Joint Operating Committee, modified with today’s information technologies, provides an oil and gas concern with the opportunity for advanced innovative-ness.” Based on the Chevron, BP, Shell and Exxon 2007 annual reports, I believe this hypothesis has now been proven correct. And the industry business model is fundamentally flawed and terminal.

For the past two years I have been writing about these theories and asking "what if" the industry did move toward using the Joint Operating Committee as the key organizational construct? And "how" would these changes affect the industry. From this analysis I have been able to publish the modular breakdown of the People's, Ideas & Objects application, and what is necessary to make this application function for the oil and gas industry.

Amongst the most important needs is the financial resources of the industry to support the users and developers of this application. If now is not the time, when? I would like to think that the work that I did over the past 4 years provides some value for the industry. Particularly from the point of view of giving them a head start on solving their reserve replacement ratios.

Technorati Tags: People's, Call-to-Action, Firm, Failure

I'm not getting this...

BP reports a decline in earnings, and the result is a 5% reduction of their workforce? We saw Shell announce smaller layoffs, but is this how the remnants of the seven sisters will deal with the current energy problems? What will happen next year?

Technorati Tags: People's, Failure, Peak-Oil

Succeeding at open-source innovation.

An interview with Mozilla Chairman Mitchell Baker.

McKinsey remains very topical with the work that is being done here. In this interview, Mitchell Baker reflects on the successful innovation she has experienced at Mozilla. A Lawyer by training she has been involved with Netscape / AOL / Mozilla for over 10 years.

The interview begins with the focus on Mozilla's participation model. With a staff of 120 and an army of volunteers, each group contributes to the code base, Ms. Baker credits both elements as critical and key to Mozilla's success.

McKinsey asks, "How do you motivate people to contribute to Mozilla, especially after ten years?" Ms. Baker notes the evolution of the browser, its dark side of pop-ups, spam and spyware and the greater conflict that Microsoft brought to the browser arena. And the elimination of gate-keepers in accessing the Internet. If not for Mozilla, Microsoft may have intimidated browser vendors to the point of extinction. These are the reasons that many have joined the Mozilla community and contributed. And;

Second, our product makes a giant difference in the lives of our volunteers, and they take ownership of it. I don't know if you could build this degree of motivation for something that really didn't change people's lives, something that they weren't emotionally committed to. But the number of people who feel that Firefox is partly theirs is very high.

I know this emotional commitment exists within the oil and gas User community.

I want to highlight these comments of Ms. Baker's and draw a parallel to the community that is being built here. No one individual knows all there is about oil and gas. To build a comprehensive system as I have described here needs the diverse and robust community to define it and build the software. I can't think how that can be done without the Users of the software emotionally involved in the manner that Ms. Baker speaks about her volunteers. And as I have stated before, this community has to be financially supported by the oil and gas industry. Both developers and Users need to be, and will be, compensated for their time and efforts.

In answering the McKinsey question "What has been the biggest surprise in the time you've been working at Mozilla? "Ms. Baker states;

That we had exactly what was needed at exactly the right moment. You often see this in start-ups that burst onto the scene and grow dramatically. There's a lot of hard work and smarts, but also some piece of timing is right. Those things, you can't control; you need to be ready.

I hope that I would not be considered presumptuous in stating that I think we are ready. Join me here.

Technorati Tags: People's, McKinsey, Open-Source, Governance

It's important to remember.

We have happened upon a time where there is much to be concerned about. Whether it is China, Britain, Australia or South Africa; Oil, Natural Gas, Coal or Gold, many problems are arising that are swiftly affecting the way of life that we have come accustomed to. James Slessinger was the first Energy Secretary in the US and is prescient in his statement that there are only two modes in energy, complacency and fear. As we move from one mode to the other we need to remember a few important points that I have commented on here before.

First as Albert Einstein famously said, "We can't solve problems by using the same kind of thinking we used when we created them." Or, we need to use new and innovative thinking in order to approach a solution to today's problems. That is what I've attempted to do here in this blog and software developments.

Secondly, Professor Carlota Perez has shown us the direction we are heading is towards a much better place. Her long wave economic theories have been written about extensively in this blog. I think her ideas provide sound comfort to the systemic unwinding of these energy market failures.

If we only focus on the problem, and the problem of energy supply shortages is possibly the biggest problem we have ever faced, we will be caught up in an emotional and viscous downward spiral. That is the last thing we need. Please join me here.

Technorati Tags: People's, Energy, Development

President Bush in Saudi Arabia

The President's trip to the Middle East gave him the opportunity to ask the Saudi King if he would consider increasing their oil production. The Presidents response was honest and candid and reflected the seriousness of the times that we now find ourselves in. In an exclusive ABC News interview he stated;

"If they don't have a lot of additional oil to put on the market, it is hard to ask somebody to do something they may not be able to do."

In a related story an official of BP Energy was quoted as saying that oil demand would peak before supply. If that is what passes for intelligent discussion at BP. The world is in much more dire of a situation than I thought. BP should be absolutely ashamed of itself.

Anyone, in my opinion, with 10 or more years of oil and gas experience will know intuitively the peak oil situation. Companies like BP appear to choose to lie about it. When this problem becomes "real" and the world in turn asks you what you did about it, you can turn and say you helped to build the systems solution that is documented in this blog. Join me here.

Technorati Tags: Peak-Oil, People's

MySQL it is.

Sun Microsystems today announced the acquisition of MySQL database. Therefore this project will move to that database platform. The reasons are fairly straight forward and include;

• MySQL has the Open Source community fully engaged in its development.
• MySQL has a feature rich offering proven in both the critical web and enterprise marketplaces.
• Sun is committed to Open Source. Java with MySQL offers opportunities for further integration.

I also am in receipt of a recommendation from one of the readers regarding the GlassFish Server. Apparently there is a version of GlassFish that is designed for light weight deployments. Named the HK2 (Hundred KiloByte Kernel) it was suggested that this could provide some significant opportunities for the developers to use HK2 on the client side with embedded MySQL.

I have revised the Draft Security & Access Control Module Specification to reflect these changes. The revised specification includes these changes reflected in blue text, and the V2 of the specification is downloadable on the wiki.

Technorati Tags: People's, Sun, Security, Development

A test of Hayek's theory of spontaneous order.

I have referenced Professor Russell Roberts on this blog before. He is an economics Professor at George Mason University, and a Fellow at Stanford's Hoover Institute. His best work is available freely through his blog Cafe Hayek, and podcast EconTalk. I highly recommend subscribing to both feeds.

One of the concepts that Hayek developed was "Spontaneous Order". In the last month this blog has morphed from somewhat of an academic exercise of extending the thinking of my thesis, to a project that is actively searching for funds, Users and Developers. Over the past year the number of people who subscribed to this blog grew slowly into a handsome audience.

Since I published the call for action in December, it is clear this community was waiting for me to exercise this change. That I may have been limiting the response is obvious to me now. The numbers of people who share an interest in these writings continues to increase. And I can now see that Hayek's concept of spontaneous order is possible. Professor Roberts provides clarity on the interaction of "spontaneous order."

When we talk about spontaneous order, the adjective is trying to capture the fact that no one is in charge, controlling the economic system - the order we see around us is spontaneous, organic, emergent, rather than controlled, directed or managed.

and

But I've been thinking lately about a different sense of the word spontaneous. It's the ability of the modern economy to deal with our spontaneity as economic actors, or, it's how order re-emerges in the face of our spontaneity as economic actors.

and

What happens when there's an unanticipated, essentially spontaneous change of behavior?

What should spontaneous order mean to Users and Developers? Action! Action not only in proceeding with the development of this software, but also learning what could be done. Action on behalf of the producers to sponsor this development, action on behalf of the Developers to get involved and action for the User groups to form and move forward.

Technorati Tags: People's, Hayek, User