System security

The first and foremost requirement of the system is to architect and implement high levels of security and reliability into the system. Doing this as the first item is critically important to its reliability, validity and use. This system, the Genesys portal, needs to be highly secure and reliable, but will have the additional attributes of ensuring the integrity of the data, the validity of the person, and many other issues.

First of all this is an open source development project. As we know Linux is open and free, enabling anyone to write any code to the base, however Linux does not get any viruses like the ones that Microsoft, a closed system, is plagued with. The user needs to review the code and understand what is happening in the application if that is necessary. This enables any company or person to achieve higher levels of understanding as well as the security to know their data or information is being managed properly.

The term free in open source does not mean that their is no financial cost. It denotes the freedom of the application to be reviewed and progress as is required. It is free to do what it needs to do. The best way to describe free in this instance is free like a puppy.

Second the application will be hosted on the grid. For me to set up and manage the appropriate servers and network infrastructure for this application would be redundant. A contract will be managed between Genesys and Sun Microsystems to host the application on their grid. This gives users the highest levels of infrastructure quality that exists at any time in the world. As time passes the user will also appreciate that no unauthorized use will occur. That would include myself. Why would I need producer or user related information or data?

As we discussed in previous entries Java was the language that will be used to develop these applications. This provides significant security and reliability value. Genesys will pay the licenses for the use of Java and therefore inherit the current installed base of infrastructure that is available today. I am not aware of any violation of the security architecture that Dr. Gosling implemented as one of the key and initial requirements of the language. This also taps into a significant base of developers that are in Java full time. With the infrastructure and tools that are available today, the development of systems has become very fast and very powerful.

With the open source developer tools provided in the past two to three years, developers have the infrastructure and tools they need to do anything, literally. And at absolutely no cost. This will lead to a revolution in applications in the coming years as these capabilities mature and are released on projects such as Genesys.

Without going into to much detail, these issues are not unique to Genesys and there are many groups that are working on the security issues of other industries applications. This is one of the benefits of Java, as things are discovered they can easily be shared within the Java Community Process and included in any application that uses Java.

Layering security onto closed applications after the fact does not work. We have Microsoft to thank for the proof of that statement. Building applications on top of a secure environment is the only way in which to ensure that the security and reliability are strong enough to provide the user with the data quality and integrity they need today and in the future. That is why the first specification is the security system, or security environment.

My comments regarding Dr. Newton's presentation...

Applying much of what Dr. Newton says in his "Brunel Lecture" to the oil and gas industries joint operating committee, reveals the following points.

Engineering is key in the future. The application of the sciences to the existing commercial problems will be the source of many of the needed innovations. Extraordinary technical challenges are faced by the oil and gas industry as the production in many fields matures, and the demands of growing economies continues to compete for the world's energy resources.

Dr. Newton notes, "User inspired basic research" (The highest quality research.) includes characteristics of:

• small group sizes
  
• are passionate towards shared goals
  
• focus on project level activity
• shared vision
• yet compete for a common goal

This is also an excellent description of the characteristics of the joint operating committee. Is it any surprise that the JOC are populated by engineers? Noting that the engineering and science based technical issues are not the problem, its the:

• policy
• legal
• organizational
• cultural
• social

impediments to the engineering issues. Engineers have to cut through these, the common theme throughout is the Information Technology, measurement and instrumentation.

The joint operating committee is a standalone organizational structure that deals with these explicitly. If the organizational structure of the joint operating committee was recognized through the ERP software these engineering issues could be more effectively approached and resolved.

Having a community form around this blog is the opportunity to develop the systems that support these structures. Dr. Newton notes that a "societal scale information architecture" is required. Stating its all about information and Information technologies.

Solving big, one of, engineering problems is one of the U.S. key competitive advantage. How the oil and gas issues are approached by engineers needs to be revised to enable greater speed and innovation.

Dr. Richard Newton, CITRIS

I reviewed the MIT Video entitled The Brunel Lecture,
Presented by: Dr. A. Richard Newton
Dean of the College of Engineering, and Roy W. Carlson Professor of Engineering, University of California, Berkeley.

During 1999 Dr. Newton lead the foundation for the "Center for Information Technology Research in the Interest of Society" (CITRIS), Institute at Berkeley

CITRIS' mission is:

• "Inventing and applying technologies to the solution of large - scale societal grand challenges."

Dr. Newton starts the presentation by noting the significance of a comment made by Greg Papadopoulous, CTO Sun Microsystems

"If the 20th century was the century of big science, then the 21st century must be the century of the engineer - the global challenges we all face simply demands it."

CITRIS is dedicated to studying the engineering challenges that we face today. Projects that are considered engineering "one offs" conducted by geographically disparate groups requiring high levels of reliability. The institute is composed of 4 California campuses of Berkeley, Davis, Merced, and Santa Cruz

I highly recommend readers review this video, requires RealPlayer, viewing time is approximately 1 hour, 10 minutes.

MIT video on innovation...

The title of this entry will provide you with the URL to a website that MIT has established to distribute videos of much of their intellectual property. The "Democratizing Innovation" by Dr. Eric von Hipple, Professor of Management and Head of the Innovation and Entrepreneurship Group, MIT Sloan School of Management has a number of very interesting perspectives regarding innovation.

Some noteworthy points I found in his discussion are as follows:

Dr. von Hipple defines two types of innovation and categorizes them as follows.

• An innovation is a user innovation when the developer expects to benefit by using the innovation.
  
• A manufacturing innovation is when manufacturing firms expect to benefit by selling it.
  

"Lead users" are users that have needs that "foreshadow general demand in the marketplace". I identified the three audiences that this blog is directed at, the systems users, developers and the oil and gas producers / investors. I perceive each one of these three categories fall into the first classification of Dr. von Hipple's "user innovation", and therefore restate "the developer, user, producer / investor" are the driving need and beneficiary of the Genesys portal.

I extend this thinking beyond the first commercial build of the application, and want to express a critical point. The system will never be static, an example of a constantly evolving web service. It will develop and evolve to meet the most demanding of "user innovations." This blog is building that community.

A second point of Dr. von Hipple is that these users:

• "expect to obtain high benefit from a solution to their needs. Only lead users innovation form the basis of new products and services, usually within the community." Noting that 77% of all innovations are sourced from users.
  

and

• "Three quarters of all manufacturing innovations fail."
  

The final and most satisfying point of Dr. von Hipple is that "user communities replace manufacturers." SAP, Oracle and other "manufacturers can't compete against a community. It, or should I say this system because of its community orientation, will succeed.

This community is the right thing for the future of the energy industry, those that choose to work in this industry and the energy consumers.

Lets go.

That there, is the forest...

I am referring to comments made by Wilf Gobert of Peters & Co in the Calgary Herald on January 12, 2006. Some of the facts that he points out are certainly surprising. I will note these facts first, then discuss the point of this blog entry.

The Canadian Oil and Gas producers are capable of drilling 26,000 new wells during 2006. This is in contrast to the 6,000 to 8,000 wells that the industry drilled in each of the years throughout the 1990's. He also points out that 2003 was the first year in which the Canadian producers were unable to increase their natural gas deliveries.

These are frightening statistics. If we are drilling almost 4 times as many wells and we are not able to increase our production, then something seems to be amiss. Gobert goes on to note the following.

• "But he said the real problem is not cash, but the critical shortage of skilled labour and developing the infrastructure to get commodities out to the markets that are very eager for the products that we produce."

This is the background data to support Gobert's statement, and the headline in the paper that a "Natural gas crisis on horizon: analyst."

Peter's & Company are Canada's largest investment banker. Wilf Gobert has been with the company since the beginning and as vice-chairman would be one of the most powerful individuals in the industry. My opinion would be that his company would be an effective marketer and only reflect what their clients, the producers, are saying. For him to reflect on this point is evidence to me that the industry has finally awaken to the point that we can not, as it stands, do more work.

The newspaper article only states the problem, no detailing of the symptoms or a possible solution. Nor does it note that we are logistically and organizational constrained and provides no further recommendations or how to alleviate the symptoms.

This precise issue was noted in the May 2004 "Plurality" document I published. (Interested readers can email me their address for a free .pdf copy.) In this document I note the bureaucracy was the root cause of this issue and as a result the ability to move and change was limited.

I also noted that the bureaucracy was explicitly supported by the oil and gas ERP software. Stating that "SAP is the bureaucracy." Therefore, to change the organization requires that the software be changed. For industry to undertake to develop these systems for themselves through Genesys.

As the beneficial owner of the copyright for this document I can, and have, monopoly rights to this concept. An excellent summary of copyright law can be provided here. And in summary;

• A copyright provides its holder the right to restrict unauthorized copying and reproduction of an original expression (i.e. literary work, movie, music, painting, software, mask work, etc.) Copyright stands in contrast to other forms of intellectual property, such as patents, which grant a monopoly right to the use of an invention, because it is not a monopoly right to do something, merely a right to prevent others doing it.

I have exercised these rights by providing written notice to Oracle, SAP and IBM that they are not authorized to breach the copyright. This, as is noted in the excerpt does not stop them from proceeding, but I would point out two important points.

1. They are not motivated to breach anyone's intellectual property, as that is in essence of their primary revenue generating assets. (i.e a slippery slope.)
2. You do not want to be dealing with the valid copyright owner to ask permission, after the fact.

Licensing of the copyright is possible and encouraged, there just hasn't been the recognition by industry that the issue exists. Now with the reflection made by Wilf Gobert of Peters & Co, the bureaucracy realizes their focus on the trees and unable to focus on the forest, has let this issue manifest itself. I am now delivering the message that the bureaucracy shoot itself, not the messenger.

Clearly the bureaucracy and competitive software offerings have failed the industry. This failure is now costing the consumers substantially more for their basic energy needs. And placed in jeopardy the future of the industry by focusing on this quarters performance instead of the long term health of the industry.

It is therefore my opinion that they be fired!

"Third Generation Globalization"

The title of this blog is the URL to The Kaufman Foundation. They have published a research report that I found on Fortune's innovation blog site, the research report of interest is down-loadable when clicking on the link "Collaborative Advantage Report".

This research report should be added with the Harvard and McKinsey articles noted in this blog earlier. Kaufman's authors note the generals are usually actively planning for their last War, whereas, the next War is not necessarily well understood.

The main point of the research report is the "weakening of the National and Regional Innovation Systems". The United States is in jeopardy of losing their advantages through the inability to collaborate and create a "world based on the free flow of science and technological brain power".

This issue of the weakening of the science and technology underlying the innovation is a result of a self fulfilling nature of the following four points.

• "The Bandwagon Syndrome", where outsourcing is seen as competitive advantage.
• "The Snowball Effect", where the more outsourcing that is done, leads to greater volumes of outsourcing.
• "The loss of Positive Externalities", where the capability to innovate is slowly eroded by outsourcing.
• "The rapid rise of competing innovation systems", noting the explicit desire of China and India to build centers of innovation excellence, whereas the U.S. systems are ad-hoc, entrepreneurial based.
  

Noting the value of "Collaborative Technology Advantages" the Kaufman research states three goals need to be identified and implemented.

1. Develop national strategies in order to compete with the centers of innovation in China and India.
2. Develop immigration and access policies to allow the inflow of greater collaborative researchers.
   
3. Develop a science and technology based education system that teaches collaborative competencies.
   

I highly recommend you read the report as it dove-tails nicely with much of what is and will be said in this blog. In terms of the need for the oil and gas industry to adopt these recommendation, hopefully this blog will be seen as the first step in the direction that the Kaufman report states.

What's an employee...

With the introduction of the context of time in the prior blog entry, the opportunity to ask 'what's an employee' in this future context seems the most interesting point to discuss. Whether these changes take the full twenty years to develop is debatable. I would suggest the day to day pressures for change are building faster then the capacity to deal with them.

The pressures to perform the duties required of an employer have becomes progressively more difficult each year. The demands on time far exceed the average 40 hour week that was deemed 'standard' in the sixties. The future was supposed to afford the 30 hour work week, and provide a more leisurely life style.

The expectations of a shorter work week was the natural progression of time expectations until the mid eighties, since that time and for a variety of reasons, the thought of a shorter work week is no longer considered in the lexicon of the oil and gas employee. The obvious shortages of employees aged 35 or less only makes this work situation ever more difficult to approach. The market demands for more energy and the increased level of effort necessary for each barrel of oil found and produced are real difficulties that need to be addressed. Where will the human resources come from to deal with these issues.

The frustration of the employee is only made more acute when the performance of the firm is dependent on the dynamics of the business market and ever accelerating business cycles. Loyalty towards the producers is superficial with a tacit understanding by the employees that the pension and other benefits may expire with the next acquisition.

Taking into consideration that China and India have now effectively placed one billion new workers on the global market, the value of physical work will seek an average cost around the globe. There are also fundamentally two different types of work that will be done in the future. Work that enables the computers to do what can be done by computers and work that cannot be done by computers, or physical labor. The queues for these two lines have begun forming, the oil and gas industry needs both, which line will be for you?

There are three distinct audiences for this blog.

• Employees or workers involved in the exploration and production of oil and gas.
  
• Developers working to provide the solutions to enable the employees or workers.
• The oil and gas producers themselves to provide the development resources. (Please note the subtle difference between the oil and gas company and oil and gas producer. Will there be a "company" in this future?)
  

The oil and gas worker, in the very near future, will not drive to the office for the meeting, they will conduct all their business in a manner that the physical location will not be an issue or even relevant. Where the work may be done at any time during the day and will involve the use of the Genesys portal I am discussing here in this blog. The oil and gas worker will not rise to the work of one employer for 10 hours a day, but will log on to these systems throughout their day and ply their skills for as many as 50 different joint operating committees and hundreds of producers.

It is with the active development of these systems, in terms of defining and providing valuable ways and means of doing the job in this computer enabled future. For the Genesys portal that we are discussing here is the future employer of the oil and gas worker, no matter where they are located or what their skills may be. It is the location of the developer to review and improve the open source code, and most importantly, the Genesys portal will be where the investor or producer turns to manage their business.

Those that may have noted the contradictions and conflict in the statements that I have made in this entry, I would point out. Using classic dichotomous thinking, analysis of these contradictions and conflict will point to the solution. These contradictions and conflict also identify the revolution that this blog declared in the "Web 3.0" entry, is very real, primarily because it is about the people.

In 20 years, the bureaucracy...

as represented by the hierarchy, will be;

1. A forgotten remnant of the 20th century.
2. In full command and control of the oil and gas industry.
   

This is the choice that is being made today. The response of the oil and gas industry is to select item #2.

I think that's wrong, and that is the point of this blog.

Who would Henry Ford hire...

One topic of discussion is the effect that information technology and innovation have on the various roles of society, organizations and people. According to Structuration theory by Dr. Anthony Giddens, society, organizations and people all move in lock step with one another. Any distortion in the progress of one over the others will lead to a failure. This theory was further advanced by Dr. Wanda Orlikowski with her application of Structuration to information technologies. Noting that technology was an element of society.

Therefore the progress of society, based on the influence of information technologies, will be faster then organizations or people. However, I think the progress of society, as dictated by the technologies will not exceed the speed at which the people can accept it. The hours worked, the productivity of "some" countries, are creating pressure on people to respond and they are turning to the technology to keep pace. That leaves the organization as the odd man out in this troika we are discussing.

This blog is dedicated to innovation and the application of technology in support of the oil and gas industry standard Joint Operating Committee. Now with Harvard University and McKinsey Consulting having joined the discussion. Stating that the collaborative tools are available to eliminate the hierarchy, (my interpretation of their words) and stating these technologies need to be used in order to sustain any competitive advantage large organizations have, is the final evidence needed to prove this application of Giddens theory of Structuration.

With this preamble regarding structuration, I want to ask, what effect did Henry Ford have on society, organizations and people. Clearly the type of worker that Ford employed after the invention of the assembly line was fundamentally different then what he needed before. The role of the organization was changed with the explicit and radical thinking that included paying his workers better wages, because it was in Ford's best interest as it directly affected the number of people that were capable of purchasing a car.

The optimization of work around the assembly line took the better part of the last century to unfold. A century to develop information technology related innovations will seem like a luxury as the pace of change accelerates and a century of innovations are compressed into what I would suspect to be a decade.

What kind of worker is needed in this networked, virtual world of information technology and innovation. Ideas are not 9 to 5. What more is there, other then the pursuit of ideas, ultimately? Just as Ford today is challenged by its competitors effective use of the assembly line, and is in jeopardy of facing its own demise, what roles need to change, how do people act and react?

Who would Henry Ford hire, and what would he do?

Financial allocation of resources for innovation.

Higher oil and natural gas prices are a reallocation of the financial resources to facilitate the needed innovation. The market demand for energy shows no sizable or foreseeable decrease. Structural competitive advantages, based on energy, are becoming evident for any country involved in the competitive globalized markets. The U.S. is the largest consumer, however, they are also by far the most efficient consumer of energy. Their GNP / barrel of oil is much higher then in any other country. It is these metrics that the countries will need to factor into their competitive landscape.

The money necessary to stimulate the energy production for the future is now being distributed to not only the producers, but also to the suppliers involved in servicing the industry. These financial resources are the fuel for future scientific advances. At the same time, the need to ration the consumption of energy is provided through the regular market mechanisms of supply and demand.

These factors are defining a completely different set of metrics for the industry. In the past, the most efficient producer was the one rewarded with the most profits. Now the producer who can find the most oil and gas will be the one with the most profits.

Is this the same energy industry that SAP began selling software to in the early 1990's? SAP clearly is the bureaucracy when you consider how the explicit recognition of the internal processes is their key competitive advantage. In the future how much of the internal requirements are augmented by the need to deal more intensely with partners, vendors, employees etc.

The point I am trying to make is:

• The market has realized the importance of energy in the global marketplace.
• The market is reallocating the financial resources to those producers that can compete on these different metrics. (Metrics of advancing the sciences and innovations.)
  
• The market is rewarding those producers with higher profits.

Where is the markets response from an ERP software point of view? Is this the same business that it was 5 years ago when SAP was adequate? What vision of the future is being provided to the energy industry from the ERP software vendors?

The global market economies are demanding a response from the energy industry. And they will respond as they have many times before. Where is the demand for new and innovative software solutions designed to support the innovative oil and gas producer? Are the software providers waiting for the phone to ring, or the knock at the door, where is the initiative, where is the software industries response?