The Value of Ideas in Today's Economy

We are beginning to see the value that ideas are taking in the global economy. And it is consistent with what I have felt their value was for the last few decades. I have spent my time working on ideas as I believe they are the only thing that is of value in the future economy. Physical assets are more or less useless on their own. More than that they are an albatross around your neck that constrain your ability to grow. It isn't worthwhile to own the oil and gas asset unless you have access to the software and services that make the oil and gas asset profitable. That is the logic of the economy that we are heading into. It is also the reason your participation in this user community, and as a service provider, are important to your long term economic health.

Intellectual Property is difficult to develop. It takes a lot of hard work and an immense amount of luck. And I got lucky. Using the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer is a breakthrough that struck me like a lightening bolt. I knew immediately I had something and set out on almost ten years of research to prove it. I still have years to go before this investment provides any value to me, however, I am much closer now than ever before. This is the road that you can chose to travel if you want to develop Intellectual Property that is unique and new in the marketplace. I own the Joint Operating Committee so you'll have to come up with something else, and I wish you all the good luck in the world.

This user community can offer you a different road. The hard slogging might appeal to some but to most it is a no brainer. As a member of the user community and particularly as a service provider you will have a license to access all of the Intellectual Property that is developed here. As a service provider you are able to leverage that Intellectual Property with the services that you provide the industry. The license will provide you with monopoly rights to manage the process that you are responsible for. The license will not be granted to another service provider in your area. I'm thinking there may be a division between the U.S. and Canada, and maybe there won't be. It’s difficult to tell at this early stage. For the purposes of your process you will have the Intellectual Property rights to administer that process exclusively. Therefore your focus will be on how best to manage the process and use the toolset of specialization and the division of labor to make the services as efficient, effective, and profitable for the oil and gas producers.

Not everyone can be a service provider. But they can still be members of the user community. And those members of the user community will be employed by the service providers. And as a result will have been granted a license by People, Ideas & Objects to freely access the Oracle and People, Ideas & Objects software applications. This will enable them to work on the processes that the service providers manage. This may not seem to be too much of a benefit but not everyone in the industry can be members of the user community.

Members of the user community need to be those people who are committed to providing an alternative organization to the profitable oil and gas producer. They are the people with the education, experience, skills and understanding of the industry that is necessary to make the difference in the industry. It is the user community that is taking on an important role in the future of the industry, and they have the power to make change through control of the Intellectual Property that makes up this environment. And that is why we need to do things this way.

It would seem that we have turned down a dark road when we are selecting who can and who can’t be part of the user community. Anyone can join the network on Twitter and work their way into the user community. User community participation is something that can be earned of course. But a person needs to qualify because of the importance of these positions. The 21st century is a completely different world in terms of Intellectual Property than what the previous centuries were. Its important that you have the means in which to operate in that environment.

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

Your Personal Information Systems

“A wealth of information creates a poverty of attention.” Nobel Prize winner Herbert Simon.

I have had some disturbing conversations with some people lately that I think reflect they are heading in the wrong direction. They say they are too overwhelmed by the volumes of information that they are receiving. And as a result they are opting out and focusing only on the relevant things that affect them. “Forget about the fire hose and chose only to look at what I am interested in.” I think this is a dangerous and unnecessary step towards being precluded from what happens in the technology and particularly the economic field. This to me is like saying you will no longer participate in the human race. Creating a secondary class of citizens who are unable, and lack the will to participate in an advanced economy that is soon to be upon us.

I think they have misdiagnosed their problem. I think that instead of being tired of the effort necessary to keep up on all of the necessary information required to participate today, their personal Information Systems are failing. The data and information that they are sorting through is too broad and unorganized. Too basic and requires too much manual effort to discern any value from it. What they need is to use their computers to control the flow of information in a way that they can select what is relevant from a variety of sources and choose the most pertinent and highest quality. What I am saying is not simple, and the effort necessary to “build” such a system takes time and effort, but it desperately needs to be done.

In terms of time I have worked to control the flow of information that I need to keep on top of. My Information System has taken me the better part of ten years to put together and it is quite sophisticated. The range of topics that I need to keep on top of include the oil and gas business, the technology marketplace, Oracle’s technologies, the economy, politics, societies demands to name just a few. And we all know the devil is in the details. The amazing thing is I can maintain this domain of knowledge with as little as one and a half hours per day, and no more than two and a half hours per day. Including weekends. I generally know one to two days before the headlines show up on the nightly news. The value of this in my business is immeasurable. In a few years it will be challenged by the flows of informations growth and the importance of it.

So how is it done. Quality is the first criteria in selection. The problem with quality sources is they don't publish regularly so you need a high volume of quality sources. Secondly seek out people who you generally agree with and have a good understanding of their positions. These can be anybody in the public domain. Like minded people are easily found and easily listened to. The next is take an equal amount of people that you have selected that are like minded, and select people who are those that you are diametrically opposed to. People, that you can't stand to listen to or think they are crazy. And listen to them carefully. Understand their point of view. Subscribe to a diverse source of news agencies on a local, national, continental and international basis. Understand your sources, you’ll be receiving the same information from multiple sources. Video is a priority. Will someone have a video presentation of that story then wait for that video. Otherwise select the source that will give you the best perspective on the story.

There are a variety of tools that are available today. Everyone will have their favorites. I use upwards of ten. I never access this on my iPhone, I can’t fit my world into a four inch screen. Some of it can be used on my iPad but most of it comes through my computer. In fact all of can be run through there the easiest.

I think its important that we keep up to date in the world as we progress in what is going to be an important time for mankind. The Internet Age will be the same as the Industrial Revolution in terms of the impact on people. But we have to participate. Opting out now could have consequences that affect your capabilities in the very near future.

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

How Does a #User #Community Develop?

What we are doing in terms of the user community development is unique and has not been done before. There is no information that I can find on “user community development.” So in many ways we’ll have to invent it here in order to get what we want. And what we want isn't just a user community in the traditional sense. It is to develop an alternative means of organization to the oil and gas industry. One where the members of the user community are also service providers who use the People, Ideas & Object and Oracle software to provide the oil and gas producers with the most profitable means of oil and gas operations.

The service providers remain members of the user community and are actively involved in future developments of the software. As their needs change in their service offerings they will work with People, Ideas & Objects to make the changes in the software as they need them. This is part of the dynamic nature of the user community that is needed in the oil and gas industry. And one of the key reasons why this user community is unique and never attempted before.

The user community has a role that is above and beyond just defining and designing the software that they will use. They in essence will also be running the industry. With the decentralized production model stripping the producer firm down to the C class executives, the earth science and engineering resources, some land and legal, and support staff. That means all of the administrative and accounting resources from the producers will be reallocated to the service providers. In terms of the number of people that would be involved it would be large. When you count accounting, land administration, production and exploration administration and other administration areas being moved to service providers we are talking about a sizeable volume of the industries resources.

It is the processes that are administered under these groups that are being moved to the service providers. Once these processes are reallocated, each of the service providers will have the monopoly rights to administer their process in the industry. Some consideration may need to be given for each region. Assuming the entire industry was using the Preliminary Specification, the service provider would have all of the producers as their client base and be able to focus on the most efficient and effective means of administering their process. All with a software development capability available to them at all times.

It is this alternative means of organization in oil and gas that we are after. The difference in doing things this way vs. today is calculated at $170 billion in opportunity costs for 2012 and 2013. And that is why the bureaucracy will never proceed with these developments. As it has eliminated them in the process of moving to the decentralized production model. Our appeal is to the investment community who need to see a viable alternative available in order to make any change. We have the vision in People, Ideas & Objects Preliminary Specification, and the technology base in Oracle Fusion Applications. Now we need the means in which to operate the industry. And that is the user community and their ability to organize themselves and offer the service provider offerings. You, as a potential member of the user community and as a service provider are a critical component in making all of this real.

And there are rewards that are significant for those that join the user community. During the software development phase we have budgeted $667 million in user community contributions. And the service providers will have the current G&A expenditures of the producers diverted to them when the decentralized production model is operational. Those G&A expenditures on a continental basis are estimated in the range of $40 - 60 billion per year. Therefore a large portion of those expenditures would then become the revenue streams of the service providers.

Its a different kind of user community that we are developing here. One that leads the industry in terms of how its administration is handled, and how its software is developed. But there’s more. The Preliminary Specification doesn’t just solve the administrative issues of the industry. It also solves the operational issues the industry faces. Just as the decentralized production model resolves low commodity prices. The user community therefore will provide leadership and the capability to resolve the administrative and operational issues that the industry faces. That is the importance of developing this user community and the service providers that you can be part of.

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

A Vision of the #User #Community

Fast forward to the time in which you are participating as a service provider in the oil and gas industry. You will be one of the key elements in providing the oil and gas producers with the most profitable means of oil and gas operations. The transition to the decentralized production model has occurred and you provide the Oracle and People, Ideas & Objects software applications, and the services of your team to the industry as a whole in the specialized area you have selected. The revenues in your firm provide you with the ability to build a highly specialized team and offering that is focused on these quality services to the producers. Bringing the work that you do to new levels of capabilities that provide your clients with unheard of value propositions. Such is the road that we are traveling down.

It is the participant, the leader, the member of the user community that is so critical to the effectiveness of providing the oil and gas producer with the most profitable means of oil and gas operations. Without the leadership in the user community none of this will happen and that is why I am spending the time and effort in developing this community. It is critical. If we had all the money for the developments today it would be useless until we had the leadership of the user community in place. That is why we are looking for anyone who our vision in the Preliminary Specification appeals to, to join us and begin organizing ourselves for this new manner of oil and gas operations.

To provide the oil and gas industry with an alternative means of organization is the objective that we need to achieve. The investors need a replacement to the bureaucracy and are as displeased with it as we are. However they have no alternatives to turn to. We can organize that alternative and give them the solution. I have shown how the user community is formed through the Twitter network, then move onto the user community participating in the developments and finally onto the service providers. This won't happen overnight, but we have the time, and we have the time to do it right. We have the developments scheduled for 2019 which gives us an adequate amount of time to organize ourselves for this task of providing an alternative means of organization for the oil and gas industry.

Crazy, I know, but fun, heck yeah! We will have achieved something that needs to be done. And that is to move the industry out of its muddling through strategy to one of a dynamic, innovative, proactive and profitable industry. Something that desperately needs to be done. And we offer more than that. As it stands today we have the vision of the Preliminary Specification. Complete with the decentralized production model. And Oracle Fusion Applications. We are not anyones weak second cousin. We are building on the premier vision and technology bases.

When we add the user community, and particularly the leadership of that user community, to what we already have we will have the solution that is necessary for the 21st century. This is why it is so important to build this community. Having the user community and its leadership will make everything complete. It is the secret sauce. No other ERP system even has user input. And People, Ideas & Objects will be user community based developments, and, user community based developments for the remainder of the century. This isn’t a one off building for the initial development purposes, this is a permanent development. Look at People, Ideas & Objects Revenue Model and you will see that we exist based on changes derived by user community requests. It is the dynamic nature of the user community that we are establishing here and now that will drive the developments, and the industry.

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

Clarification of the #User #Development Phases

We have in People, Ideas & Objects a somewhat complicated and possibly not well communicated process of how the user community will develop over the course of the next few years. This post will hopefully clarify the various phases that I see the users going through in terms of their interaction within the user community and People, Ideas & Objects. The first thing to do is to provide a clear definition of who I see being a member of the user community. And that is anyone within the oil and gas, the oil and gas service industry or any related businesses that have a desire, capability, or idea on how to provide the oil and gas producer with the most profitable means of oil and gas operations.

We hear how technologies are maturing and becoming more disruptive in the marketplace. That is true and for oil and gas the Preliminary Specification is that technology. The common theme is that people will be displaced and rendered unemployed as a result. This has been the common theme throughout the computer age. They say this time its different due to the fact that the maturity of the technologies will have a much broader impact. We see with the $170 billion in opportunity costs the scope of the impact of the technologies, and they are positive.

Nonetheless I believe there will be some displacement. To those that choose to participate in the People, Ideas & Objects developments. They will be able to take the front row seats and be the first to select which areas appeal to them the most. I think the types of work that we will be doing in the future will be different. We will be offloading the storage and processing to the computers. And we will be left with the innovation, the collaborations, the thinking, the decisions, the problem solving, the creative work, the research and the generation of ideas. Sounds to me like a better place than where we stuff another ream of paper in the printer.

There are three phases that the user participant goes through during the years we are following our plan. They are joining our network on Twitter @piobiz, then committing to the user community and participating in the developments, and lastly, if so inclined, establishing a service provider organization to manage a process for the oil and gas producers. These three phases of joining the user community are detailed as follows.

Joining @piobiz today on Twitter will allow users to keep up with other users and communicate with one another. If you use Hootsuite you can participate in conversations with other users. Generally this is a loosely formed network of like minded individuals that can informally participate, or just keep up to date on activities in the user community as it develops. There are no costs and there are no commitments, just participation. If you are concerned about the bureaucracy then set up an anonymous Twitter account.

The second level requires a little bit of effort and commitment from the user participant. This next level requires that you introduce yourself to the general community and sign the user license. I don’t expect anyone having to go to this level for some time as our developments are not scheduled until 2019. Intellectual Property is the glue that binds the user community together and requires the user community participant to sign the user license. Recall in the budget you are paid for your contributions in exchange for your Intellectual Property Rights. We acquire the IP this way through the user community license, which in turn provides you with unencumbered access to all of the Intellectual Property that is contained by myself or People, Ideas & Objects. I then use that IP to assess the oil and gas producers with the fees necessary to support the developers and user communities.

The third tier of the user community is the service provider which is the mature user community participant that signed the user license and participated in some element of the development. They have intimate knowledge of some aspect of the People, Ideas & Objects Preliminary Specification that the oil and gas producers need in order to be the most profitable oil and gas operations. These user community participants may want to then establish themselves as service providers and offer these services under a service provider license. These will be open only to those people who participate in the user community. They can then set up a firm and provide these services, a process or subprocess management, to the oil and gas industry as their client base. These service providers will have as their revenue streams the current G&A expenditures of the producers that will be diverted to them by the decentralized production model. These revenues are currently estimated in the tens of billions of dollars.

This may seem like an unnecessarily slow process that could otherwise be done much quicker. Remember we are plotting a revolution and the establishment of the service providers is critical to the success of the whole project. It may seem slow, but there is much to do so join me today and lets get the word out.

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

Allocation of our Margins

One thing about being in the software business is the healthy nature of the margins that are realized. For example Microsoft Office earns 73% profit margins for Microsoft. That also assumes you are able to attain the point in your business that you actually earn any revenues. The real downside of the software business is that all of your costs, the actual cost of development, is conducted without the benefit of any revenues. So you have to incur the costs of development before you get to the point of earning any revenues. Such is the way of the software business. And with People, Ideas & Objects large scope and scale, and the small market for ERP systems that the oil and gas producers make up, we have implemented a Revenue Model that is fundamentally different than most software companies. That is, we are developing the software with revenues from the producers. As the scope and scale is beyond the capabilities of the investment community.

Nonetheless the lead times to get to the point where the revenues are realized are significant. We are planning to commence developments in 2019 and complete them in 2021. I started working on developing oil and gas systems in May of 1991 and signed my companies first comprehensive development agreement with Oracle in February of 1992. It is coming up to 23 years that I have had this vision of the Preliminary Specification rattling around in my brain. It represents a life’s work and a life’s investment. I don’t count the amount of money that I have invested in this software nightmare, but it is substantial. The point is I am either crazy or I'm right. And I am very satisfied with being crazy.

So it is to the margins of our budget. I have allocated a 25% Intellectual Property Royalty, or $500 million to 1 billion to myself, the owner of the copyright of all of this material. I know this will cause some backlash in the industry, you understand that I am satisfied with my position in life. Alternatively you can start with your own vision as I did in 1991 and enjoy the smooth and glorious ride that offers. Bureaucrats will hold this royalty out as a reason not to proceed. Denying the investors the almost $100 billion in annual opportunity costs that are lost by using their current business model.

There are additional profit margins of 25% totalling $500 million to 1 billion as well. These are the profits of the firm and are distributed as dividends to the shareholders. It is true that I control 100% of the firm and as a result these dividends will end up in my pocket. I provide oil and gas producers with the most profitable means of oil and gas operations. This is a tangible difference in our business model. The question becomes how do I realize this value that I generate for the industry? The shares are worthless. Once the development is done the revenues will fall significantly and define a much smaller capitalization. Do I have to sell the company to realize the value that I earn? The methodology defined above is the means that I choose to monetize my efforts, and is commensurate with the value that I provide to the industry.

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

#Oracle Budget

We now turn to the Oracle end of our budget. Oracle plays a critical part in the People, Ideas & Objects Preliminary Specification. Their Fusion Middleware and Fusion Applications are the foundation of the eleven module Preliminary Specification. We also use Oracle’s database, Java, hardware, services and solutions. One could suggest we are an Oracle shop. However with this level of commitment to these product categories we can secure Oracle’s commitment to provide the oil and gas producer with the most profitable means of oil and gas operations.

Lets start off with something tangible. Hardware is used by People, Ideas & Objects to run the People, Ideas & Objects Preliminary Specification in a cloud computing configuration. Oracle engineers their hardware to run their database and Java technologies at far faster speeds than the competition. Evaluating Oracle on a cost / performance basis is a slam dunk. No one can currently come close to the types of performance that Oracle is able to attain with their hardware and database. This is one of the premier reasons that we have selected Oracle. This is the reason that they are the dominant database technology in the world and will stay that way as long as Larry Ellison remains the head of the firm. Larry Ellison is the Steve Jobs of the corporate world, and Oracle is the Apple. We have therefore budgeted $100 to 200 million in hardware for providing the Preliminary Specification to the oil and gas industry on a cloud computing configuration. This amount of computing power is augmented with additional processing power. With a share of the $25 to 50 million in the services budget being allocated for the use of the Oracle Cloud service for any of our peak computing demand requirements.

The second budget allocation is $5 million for software. This number has no basis in its determination other than it is a best guess as to what the cost will be to acquire the software for the cloud configuration of Oracle Fusion Middleware and Oracle Fusion Applications. There are individual user licenses that are also budgeted and noted below, this is for the one time acquisition costs of the software for development purposes.

There are a number of services that are offered by Oracle that can be accessed through this budget. I mentioned the cloud computing services. There are also Database Administrators, tuning and related services that fall outside of the development domain. These are collected and provided in this budget allocation of $25 to 50 million.

Then we come to the Oracle developers. It has been my experience that you can learn about Oracle technologies through experience, or you can hire their developers to implement that high level of knowledge for you. The ability to hire their developers provides you with the understanding of the technologies at a higher level. One that you would have eventually learned, at substantial cost. I choose the cheap way and have allocated a healthy budget for the inclusion of $150 to 350 million or 450 to 1050 man years of Oracle developers. Undertaking a large development such as People, Ideas & Objects Preliminary Specification and using Oracle Fusion based products demands that we extensively use Oracle developers. They are, in a very significant way, an insurance policy for the oil and gas industry in terms of the overall deliverability of the project.

The last budgeted item is for user licenses during the development for the developers and the members of the user community. These user licenses are for development only. Additional charges will come into play for the runtime use of the application. And the user license charges at that time will be much larger as their will be large portions of the industry using the application, not just the user community and the developers. These licenses include the entire stack of database, Java, Oracle Fusion Middleware, Oracle Fusion Application licenses. These are budgeted at $3,700 per man year for a total of $9 to 18 million.

Oracle brings a unique character to the Preliminary Specification. I am pleased to be providing People, Ideas & Objects applications on their technology. When we add the user community to this we become ever so stronger. We are building an application for the 21st century and now is the time to get involved.

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

#User Defined Software

When does People, Ideas & Objects commit to the user community? How do we prove that we are user based developments? We say that we are user based ERP systems developments, but how do we differentiate ourselves from the marketplace in terms of being user based developments? Is it an important point to be “user community based” in the oil and gas industry? These are some of the questions that I will answer today. And in turn provide the direction and leadership that is necessary for the next phase of what we undertake.

Lets first answer the question “is it an important point to be user community based in the oil and gas industry.” It is critical to have the user provide the developers with the leadership and direction for the systems that they will use, in my opinion. If we look at Apple and Google, both of those systems are developed with heavy user involvement. There is a difference that is both quantifiable and qualifiable. The most important difference to us is the impact that the Preliminary Specification has on the industry. Every individual, producer, service provider, service industry participant, etc are affected. Primarily through the decentralized production model. This demands that the people who are involved in this work today, and those that are involved in it tomorrow are intimately involved in the design and development of these systems. We all know what happens otherwise with the traditional top down approach.

Assume for a moment that we had secured all of the financial resources that were needed for the development of the Preliminary Specification. What would be the first thing that we would do with those funds? It would be to develop the user community. And those financial resources would sit and wait for the day in which they could be used to develop the Preliminary Specification. Until the user community is developed there will be no development work undertaken at People, Ideas & Objects. Therefore the user communities development has to be our number one priority at this point.

To organize ourselves doesn't cost anything and helps us to prepare for the time when the development funds do arrive. It will be at that time that we can begin the actual software developments. As we stand today the bureaucracy is well in control of the situation and they will never participate in the development of People, Ideas & Objects. The CEO and CFO, the investors and many of the people in the industry agree that the bureaucracy needs to be replaced with something in the technology field. The Preliminary Specification is a possible alternative. If the user community for the People, Ideas & Objects developments existed it would make the Preliminary Specification a viable alternative. And that has to be our mission in the short term. To provide an alternative means of organization to the oil and gas industry.

By developing the user community we lose no development time due to the bureaucracies attitude towards us. This is work that we can do without the need for financial resources. Participation is simple, just setup, or use your Twitter account and Follow @piobiz its that simple. Things will happen within that network as a result. Users will be able to communicate with other users. People will be able to keep up to date on all that is happening within that network. And as time passes and the user community grows, the industry will see a viable group of like minded individuals that are capable of providing a means in which to provide the oil and gas producers with the most profitable means of oil and gas operations.

If you are concerned about retaliation from the bureaucracy. A very real concern. Set up an anonymous Twitter account. There is no need for anyone in the user community to take any career risk as a result of joining the network. The purpose of this is to communicate and collaborate around the needs of developing the user community and providing an alternative means of organization to the oil and gas industry. So join me now and lets spread the word to other like minded individuals who know there is a better way.

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

Developer Budget Category

We move on from the User Budget Categories to the Developer Budget Category. In many ways this is a far simpler budget in that it maps directly to the user budget. That is each hour of user community time is matched with one hour of developer time. So the allocation of the time of the developers will follow exactly that of the User Budget Categories that we have already spelled out. The costing of the developers is at the same rate of $185 U.S. as the user community. The main difference is that user community is a third party transaction with an independent business, and the payment to the developers is to salaried personnel. The $185 therefore also includes our overhead for office space, administration, computers, networks and software, etc.

We therefore have the same 1,000 to 2,000 man years of time, or $333 to 667 million budgeted for the developers for the term of the first commercial release. As we will see in the Oracle cost section we have additional developer time of 450 to 1050 man years of their developers joining the development. These are for a variety of reasons that we will discuss when we get to that budget category, however it is reasonable to assume that there will be some mixing and matching between the People, Ideas & Objects developers and Oracle developer categories in the user community.

We have two additional budget line items in the developer budget. The first is “Product Owner” which are positions that are part of the developer team. For the type of development we are conducting these people will represent the user community on the development team. They have broad authority and responsibility and can affect changes to the development. They are the user communities representative on the ground in the development team. They will be selected for their industry experience and knowledge of the specific nature of the module or characteristic of that specific development team. Therefore they will be speaking the same language as the user community. They will be senior in terms of their education and experience and understanding of the oil and gas industry. They will also understand the technology. We have budgeted for 25 product owners, one for each of the development teams. Each product owner is provided with support staff and a discretionary budget. The costs for the anticipated three year term of the initial development is therefore $33.6 million.

The second budgeted line item in the developer budget is for research. This is for oil and gas related research in terms of the work that has and will always be carried out by People, Ideas & Objects. We are a research and software development company. It is the ten years of research that we conducted into the use of the Joint Operating Committee that has brought us to the Preliminary Specification. It doesn’t stop here. As we mentioned yesterday the Preliminary Specification is a framework for solving problems. Expanding our research capabilities will help in providing some leadership and direction in terms of where the Preliminary Specification will need to move to solve future issues. We have therefore designated a budget of $10 million for the three year term of the development to provide for the addition of ten people. And therefore the total budget for the Development Budget Category is in the range of $375 to 710 million.

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

Review of the Decentralized Production Model

It has been a while since we reviewed the decentralized production model and I thought that a quick review for the new year would be timely. Our focus lately has been on the value that People, Ideas & Objects brings to its various stakeholders. With $667 million in development funds to the user community, tens of billions in revenues being established in the service provider sub-industry (this being through a reallocation of the G&A of the producers to the service providers), and the opportunity costs of $170 billion for 2013 and 2014 for the producers themselves. This value generation is the opportunity that is open to each of these communities as a result of implementing the decentralized production model of the Preliminary Specification.

Implementing the decentralized production model will be the first material operational solution that the Preliminary Specification has solved for the oil and gas industry. When we move the compliance and governance frameworks of the hierarchy into alignment with the legal, financial, operational decision making, cultural, communication, strategic and innovation frameworks of the Joint Operating Committee. We achieve a speed, accountability, innovativeness and profitability within our producer organizations and Joint Operating Committees. We are also able to solve the operational issues of the industry. This is the value of the Preliminary Specification, the ability to solve problems. Moving the industry away from its muddling along strategy to that of an innovative, dynamic, proactive and profitable industry.

The decentralized production model starts by stripping the prototypical producer down to the C class executives, the earth science and engineering resources, some land and legal, and support staff. The rest of the producer is reallocated to service providers who are focused on a process or subprocess and are using the entire industry as their client base. These service providers are new organizations created as a result of implementing the Preliminary Specification. And are generally owned and operated by the people who are involved in the user community that defines the Preliminary Specification. The service providers form a sub-industry due to their size. With a revenue stream in the tens of billions of dollars, monies that were previously spent by the producers on General and Administrative expenses.

One of the key differences in the decentralized production model is that the service provider will be charging for their service to the individual Joint Operating Committees that originate the transactions. Whether that is for production, revenue or royalty accounting or any other administrative, accounting or overhead item. The service will be provided to the Joint Operating Committee where the production originated and that is where the service fee will be charged. None of the fees for any of the service providers will be charged to the producer firms, only to the Joint Operating Committees.

As a result when the property is shut-in due to low commodity prices, the field data or activity that triggers the service providers to conduct their services, and bill their fees, are not triggered. Therefore no work is undertaken for that property and no service fees from any of the service providers are sent to the Joint Operating Committee that was shut-in. As a result the producer who has an interest in the property saves the reserves for a time when the commodity prices will provide for a profit, incurs a null operation (no loss, and no profit), and removes the excess production from the commodity marketplace allowing for the markets to remain in balance.

The $170 billion opportunity costs calculated above are based on the producers removing 15% of the natural gas production from the marketplace. And in turn they achieve what they prescribe as market rates of $6.70 / mmbtu on average for the year. The decline in production is possible with the decentralized production model because there is a commensurate decline in the overhead that the producer will realize. If they cut 15% of their production they will cut 15% of their overhead costs. Their financials will appear consistent in any production profile as their overheads are now variable under the decentralized production model. For the service provider it may be that they are faced with a 15% decline in their revenues as a result of low natural gas prices. And this is something that they can budget for.

With over 200 years of natural gas reserves, rationing production based on profitability is the only reasonable methodology. That is what the decentralized production model provides the industry. Any producer who produces natural gas at a loss would be penalized in the capital markets for a lack of production discipline. The alternative is to muddle along for another 200 years.

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