Another security concern.

I wrote earlier about my concern for the security risks associated with the new Zune and web phones, and that includes Apple's new iPhone. These large hard drives with wireless connectivity could be accessing corporate data without anyone knowing. The need to encrypt your network is critical these days, but it is also necessary to store your data in encrypted form. A very difficult task for a company to do. This new threat that I am writing about today will also be mitigated by high level encryption on the network and storage. I recommend Sun Microsystems Elliptical encryption technology.

The other product that has popped up that concerns me is Adobe's Apollo platform. In an attempt to "pick up where Java has left off" they have created a "run-time" that enables web applications to operate also as desktop applications. The manner in which they do this is of course is enabling Apollo to have access to the lower level operating system functions. This is where Java has drawn the line and it is the point where no Java application can access the data and systems of a client machine. Apollo takes this security precaution, throws into the garbage, and offers any user a tool that will enable anyone to provide web and desktop applications without knowing what is really going on. Behind the GUI application, another part of the same application may be copying data, destroying data or what ever it is they may want. It literally has nothing to stop the user from being entertained or distracted while it goes on its merry way through your client machine and network.

The key to solving this problem is to not download the "run-time" Difficult when you have many users. The "run-time" is necessary to run the "p" code that the applications will be distributed as. "p" code is not full binaries, but also not software code. As a result the user can not look at the code and determine what it's actually doing. Without the "runtime" when a web site uses some Apollo functionality, it will be unable to morph itself down into to the operating system level, disabling the feature of the website.

The other problem with this is the popularity that this platform will have. The demonstration that I saw was of an eBay Apollo application and included credit card numbers and access to the file systems. The users need to get the work done, and more and more that is all that the they are concerned about, and hence they will use what works, irrespective of the consequences of what they don't know or don't understand. The only people that I think are going to be interested in writing applications for Apollo are the ones who are currently writing viruses. The Apollo "run-time" doesn't let them in, it invites them in. No software vendor that is concerned with the security and reliability of the client systems will write to the Apollo "run-time", therefore it may simply be a matter of selection that the users are disallowed the use or download the Apollo "run-time". But then again, a good virus writer could probably install the "run-time" for the user.

Technorati Tags: Genesys, Security, Capabilities, Data

Hydrogen isn't it.

That is of course just one man's opinion. Thankfully the scientific community has taken up President's Bush's challenge on alternative energy sources. This video is also a continuation of the MIT Energy Research Council announced earlier and is a part of the excellent series on the challenges of energy.

The problems are derived from the energy security point of view. This video provides an understanding of the challenges that are faced in using hydrogen as an alternative energy source. This Professor stands out as being one of the recognized leaders in physics and electronic engineering and has a great delivery. As with many of the videos presenters, she identifies the problems that we face in terms of the global energy challenge from her own particular point of view. The growth in populations that are increasing their standard of living, China and India to name a few, are where the demand is increasing. Professor Dresselhaus mentions that this demand is not linear. Noting also that the U.S. consumption does not change necessarily with respect to the GDP increases.

As we are aware, the higher quality fossil fuels, are mostly located in the difficult areas of the globe. The use of coal by the U.S. and China are probably going to continue and may increase as demand for energy increases and the supply becomes more constrained. It is also projected that fossil fuels will supply 30% of the energy in the future, down from 80%, however I find that to be a surprising reduction. Some interesting points in the discussion include hydrogen provides twice the "power" of gas.

Professor Dresselhaus talk is mostly on working with hydrogen, and particularly the storage challenge it provides, and how Nano Structures provide a fresh look at these hydrogen issues. What is required in order to use hydrogen is a variety of catalysts to produce it, to store it and then to use it. The Nano Structures change the properties of catalysts. This provide three benefits during the catalysts phase. They increase the volume of hydrogen storage, they reduce the storage temperature requirements, and "borazene" gets trapped. Professor Dresselhaus also notes that gold is a catalyst in nano application even though gold is not normally a catalyst for hydrogen. She also draws a parallel to the benefits that Moore's law has provided in terms of computer processing capability. This she notes is this scope of benefit that is necessary to solve the worlds demand for energy in the future.

Hydrogen is a transmission agent of energy that were inspired by fuel cells. The use of hydrogen today is specific to its application and the U.S. produces 9 million Tonnes per year. The source of this hydrogen is from hydrocarbons and therefore limits its upward growth opportunities. What is needed is to extract the hydrogen from water which requires a catalyst and hence is very costly and difficult to do, particularly at what would be expected as commercial volumes.

Many of the areas that progress is beginning to be made seem to be more on the energy demand side of the equation. Light can be provided for half of the energy demands by using LED's and Photonics. The demand side is the area where most of the scientific advances are of benefit at this point in time. Professor Dresselhaus stresses again that the most critical issue here is the storage of hydrogen, noting that Hydrogen needs five times the storage size of gasoline. Hydrogen molecules are separated quite far apart. What is needed is a Nano particle as a binding agent to reduce the storage requirements. One binding agent Ammonia was shown to be benign and inert as a storage medium.

One can clearly see the issues that storage of hydrogen makes. The costs of these materials, the energy they consume themselves and their safety has prioritized the science community to focus on these first and foremost. One opportunity Professor Dresselhaus notes is the recent discovery in sunlight conversion multiples. Soon the output of solar cell could increase from its current 12 -13% efficiency, and with nano technologies, this can be brought up to a 30% efficiency. Professor Dresselhaus noted that an ideal application of solar may be in the production and storage of Hydrogen, this would reduce the hydrocarbon footprint of production. And a surprising comment that all of these scientific findings have been discovered since the Presidents 2003 announcement of a new energy initiative.

Technorati Tags: Genesys, MIT-Video, Science, Alternatives

SAP is SaaS (Software as a Service)

This just in from Professor Nicholas Carr. The CEO of SAP has changed his tune as too what the better software business model is. Well, we should all welcome SAP to the SaaS party, and since they are announcing a future development product, complete with its own code name "A1S" our warmest wishes to the latest and greatest of the vaporware vendors. There is also an explicit comment that the "users define their software requirements." In response to Carr's writing Vinnie Mirchandani writes that SAP is selling the SSDD.

Since SAP wants to re-tool to accommodate the new user requirements we should give them the opportunity. The point that I wanted to make here is that SAP is now in the same boat as this projects efforts are. The only difference is that SAP wants the oil and gas producer to get closer to its customers, (?) and we want to build software to expressly support the JOC, the natural form or organization for oil and gas.

So here are the energy industries options. IBM has sold out of the business, SAP is in a comprehensive rewrite due to a shift to a new (unknown to them) architecture, Oracle is rewriting their application, and we can only assume they are not employing the user since there are no Oracle Energy bats around. And there is this choice that I write about here. One that is unconstrained by the venture capitalists or capital markets, one that is unconstrained by existing code requirements, one that is based on solid research.

I guess what this really means is that SAP NetWeaver didn't work out. Exactly how many more chances does SAP have left?

Technorati Tags: Genesys, Software, Strategy, Development, Capabilities

What its all about, the user.

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

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

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

The Future of the Web

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

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

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

End user tools

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

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

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

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

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

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

The semantic web

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

Search capability

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

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

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

Always on.

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

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

Always everywhere

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

A different context, a different perspective.

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

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

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

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

Technorati Tags: Genesys, User, Vision

A new tool.

Marissa Mayer of Google just announced "gapminder" for a preview look. What an unbelievable tool. The world will not be seen through the data elements, but through tools like gapminder. The address to this demo is...

http://tools.google.com/gapminder/

Technorati Tags: Genesys, Ideas, Innovation, Attention-Economy, Data

Project status.

On Sunday I mentioned this project was in a state of flux due to the actions of the major producers CIO's decision not to proceed. Well Popeye is back with what might be a better opportunity. Being isolated from the industry for the things I said has a tendency for me not to keep up to date. I had completely lost my window on the competition. The sale of IBM's Qbyte application, and the announced 2009 termination of support services provides an excellent market for this project to fill. If I exclude the major producers from the population of Qbyte clients, I still arrive at over 135 companies that need a solution.

Therefore a marketing approach will be developed to make this project appealing to those 135 producers. I want to spend some time revisiting the project and particularly the budget. My assumptions in preparing the last budget was for a relatively stable technology industry. Clearly with the majority of the firms looking for new systems in the near term, the time frame will be one of high demand on the resources in the technology area of the City. Therefore I will prepare a proposal to them that is based on the many things being discussed here.

Deadlines for the preparation of the proposal will be March 31, 2007 with a May 31, 2007 subscription date. Same application, same vision, same leadership, I'm enthused.

Technorati Tags: Genesys, Development, Summary, Market

Industrial Dynamics, Innovation and Development

May 6 2004

Professor Richard N. Langlois

Competition through institutional form: the Case of the Cluster Tools Standards.

Another excellent paper from Professor Langlois. This paper discusses the history of the Semiconductor manufacturing equipment and how it has evolved, particularly around the intense competitive pressures from Asia. Comparing a high tech industry to a commodity business may bring criticism. I would re-assert what Matthew R. Simmons states that the energy industry is second only to the space industry in terms of the application of science. This paper's analysis focuses on the appropriate split between the firm and market, a similar discussion to what I am carrying out here for oil and gas. A discussion that focuses on the Joint Operating Committee (JOC). Langlois takes this discussion to its ultimate objective, that of course being the organizational structure as a competitive weapon.

"Industrial economists tend to think of competition as occurring between atomic units called "firms." Theorists of organization tend to think about the choice among various kinds of organization structures - what Langlois and Robertson (1995) call "business institutions. But few have thought about the choice of business institution as a competitive weapon." pp. 1

Key to this discussion is the standards used within an industry. Within the energy industry their has been a move to standardize the data elements between producers and suppliers. This has primarily been done through the efforts of the Public Petroleum Data Model (PPDM) I have discussed here before. As a result standards in the energy industry have been established and are used by many of the engineering and geo-technical applications in this industry. This project is committed to the PPDM model as it is both international and most of the remaining work to be done is to resolve conflicts within the industry data elements. In Semiconductor's standardization was available but not used by everyone. Many of the larger "fab" manufacturers were able to establish and use their own methods of production. Through the evolution of the industry this made for some interesting positions being taken within the competitive marketplace. The semiconductor's dynamics of this structure and the changes to the marketplace as a result are interesting from the point of view of the discussion here on energy.

"Rather than a battle of the standards, the current situation might best be thought of as a battle of alternative development paths" the closed system of Applied Materials, with its significant internal economies of scale and scope, and the open modular system of the competitive fringe, driven by external economies of standardization. At this point, the forces favoring the integrated development path are more-or-less evenly balanced against the forces favoring the path of technical standardization. I analyze these forces in terms of the trade-off between the benefits of systemic innovation and systemic coordination on the one hand and the benefits of external economies of scope and modular innovation on the other Although standards have so far kept the competitive fringe in the ballgame, modularity in the industry may ultimately take a different, and somewhat more familiar, form, as some of the larger firms adhering to the standards become broadly capable systems integrators who outsource manufacturing to specialized suppliers of subsystems." pp. 1

As most people are aware the development of the semiconductor industry has been seen as a critical point in the development of nations. Here Langlois brings in a study from Berkeley to lay the groundwork of this discussion.

"In one of the few contemporary academic examinations of this industry, a study by the Berkeley Roundtable on the International Economy concluded that;

"... with regard to both the generation of learning in production and the appropriation of economic returns from such learning, the U.S. semiconductor equipment and device industries are structurally disadvantaged relative to the Japanese. The Japanese have evolved an industrial model that combines higher levels of concentration of both chip and equipment suppliers with quasi-integration between them. whereas the American industry is characterized by levels of concentration that, by comparison, are too low and [by] excessive vertical disintegration (that is, an absence of mechanisms to coordinate their learning and investment processes) (Stowsky, 1989)" pp. 3

Langlois then continues on discussing how the products are made in the semiconductor industry. This discussion is critical as background for the discussion here in the energy industry. I will pick out some of the stronger parts and make application to the energy industry later in this entry. Through analogy Langlois draws a litre of milk to the methods of keeping the semiconductor clean room. Instead of having everything "clean" for processing, and just as you would not refrigerate the entire house to keep the milk cold, the clean rooms were adjusted in size leading to new economies of scale.

"Indeed, there has arisen something of an international division of labor in the industry, partly by default. We can think of the more that 500 process steps in semiconductor fabrication as grouped into three phases akin to the steps in photo developing." pp. 5

"Instead of thinking about refrigerators, think now about dishwashers, and consider the problem of washing a kitchen full of dirty dishes. Using a dishwasher is a batch process; washing by hand is a continuous process. Loading the dishwasher may ultimately have a larger "throughput", but the first clean plate reaches the cupboard more quickly with hand washing. Batch semiconductor processing is like running dishes sequentially though many different dishwashers with many different capabilities. This creates a queuing problem, and the wafers must often sit around in WIP inventories while waiting to form a batch of the appropriate size for the next process step. By contrast, single wafer systems push only a single wafer through at a time (putting aside parallel processing steps), but the progress of that single wafer is not slowed as much waiting for other wafers to be ready." pp. 9

"Introducing a single wafer step into a batch fab instantly creates a bottleneck, of course, since throughput of the fab is limited to the throughput of the single wafer step. The obvious answer is to replicate the bottleneck stage in a parallel processing configuration. The need for parallel processing was the original motivation for common platform cluster tools." pp. 11

"Instead of running the same process in all four chambers, one could instead run different processes, using the wafer handler to moved the wafers from one to the other within a controlled atmosphere. This was the genesis of the integrated cluster tool which represents a genuine move in the direction of single wafer processing. The parallel configuration offers the benefit of redundancy, and can generate higher throughput when downtime is an issue; but as tools become more reliable, the serial configuration - which boasts superior cycles times - gains the advantage. (Lopez and Wood 2003)." pp. 12

"One way to marshal the necessary capabilities is within the boundaries of a single firm large enough to possess and wield all, or at least most of, the competences necessary to produce a cluster tool. Another way is somehow to organize and integrate through contract the competences of a number of distinct firms. The American semiconductor equipment industry uses both of these approaches simultaneously." pp. 12

"Applied (Materials) has quite deliberately chosen the opposite strategy - to develop internally capabilities in all areas of semiconductor fabrication technology. Initially, Applied did contract with firms like Peak Systems for an RTP module and GaSonics for a photoresist stripping module. Both of these arrangement generated contractual problems and were abandoned." pp. 13

This last point, "contractual problems" were earlier discussed here. This is therefore a major demarcation in this analysis of energy in comparison to semiconductor industry. The ability of the market to define the contractual basis within a market system, I have suggested exists in oil and gas. This is the cultural framework of the industry that drives the financial, legal and operational decision making frameworks in oil and gas, and the direct mechanism to operate in oil and gas is the JOC. This is also the point of conflict that I am experiencing with the CIO's of the CAPP CIO committee. The market is attempting to provide a solution, being this discussion, to solve the administrative issues of the industry. Whereas the CIO's focused on the firm are breaking down what they need to such a fine level, that $50,000 is a reasonable level of contractual requirement. Work within the industry needs to be done, and that is consistent with the understanding of Langlois, and the CIO's have failed to see this point. I would refer back to this table to see the makeup of the industry should be from my point of view. With the PPDM standards in this industry, any attempt to build systems that do not recognize the JOC would be a continuation of the forces necessary to micro manage all aspects of the industry by the individual firm. This is the reason that I attribute the CIO's are failing, and will continue to fail until they address these points.

"The emergence of standards."

"The process by which standards emerged in the cluster tool industry is rather different from those of well documented cases like the QWERTY keyboard, the VHS videocassette recorder, the IBM compatible personal computer or the 33 rpm LP record. In all of those cases standards emerged through or competition or "battle of the standards" among alternatives originally offered as proprietary schemes. In cluster tools, however, a single standard emerged immediately out of collective action with a fragmented industry." pp. 14

This last point showing a consistency between the energy and semiconductor industries. For these purposes here, there is only one data standard, PPDM in oil and gas. The value of which is well articulated by Langlois in the following two quotations. I would also add to this discussion of data standards, the copyright that I hold in the development of this research. As I have asserted I will only license one firm to develop the software for these purposes in order to focus the energy industries efforts on the one right solution. Using a shot gun approach to system development will not work with such a high level of technology being employed.

"For the moment, then, both development paths seem to be surviving, and neither is obviously driving out the other. Why? Let us pause to think about the basic economics of closed proprietary systems versus open modular ones. The primary benefits of a closed system lie in the ease of systemic coordination and reorganization. When the nature of the connections among the elements in a system are changing or idiosyncratic to application, a unified organization can more cheaply coordinate and fine tune the connections. The value of such systemic coordination depends on both technological and demand factors. In some respects, and in some technologies , the value of idiosyncratic systemic coordination may be exogenous. In the automobile industry, for example, some degree of "integrality" may be inherent in the nature of the product (Helper and McDuffie 2002) Moreover as Christensen and his coauthors have argued, an integrated organization is better able to fine-tune product characteristics to achieve greater functionality in an environment in which users eagerly demand such functionality. (Christensen, Verlinden, and Westerman 20002)" pp. 18

These are the benefits that accrue to the energy industry as a result of one software solution being built here. The focus is not diluted through the needs of venture capitalists and competition among rivals. The focus is on providing the best software solution possible to the industry in the manner that the industry defines. Langlois then shows the benefits of an open modular system. This open modular system is what I am proposing for the "market" of the energy industry. An "open" market comprised of many Joint Operating Committees.

"On the other side of the ledger, an open modular system can more effectively direct capabilities toward improving the modules themselves (Langlois and Robertson 1992). Such a system harnesses the division of labor and the division of knowledge, allowing organizational units to focus narrowly and thus deeply; at the same time, it magnifies the number of potential module innovators, and thus can often take advantage of capabilities well beyond those even a large unitary organization could marshal. In this way, an open modular system "breaks the boundaries of the firm." There are both static and dynamic benefits. At any point in time, a user can "mix and match" components from a wider variety of sources to fine-tune the system to his or her taste, and thus reach a higher level of utility or tailored functionality than pre-packaged system could offer. In the semiconductor equipment industry, this is called "best of breed."" pp. 19

"More important perhaps are the dynamic benefits. Over time, an open modular system can lead to rapid trial and error learning and thus evolve faster that a closed system." pp. 19

This is how I foresee the energy industry developing greater focus and capabilities based on innovation. The organizational structure of the JOC provides the ability to deal with the market as it needs. The market evolving essentially in response to the producers needs. This needs to be defined and built within a software structure that is the purpose of this blog. When we add compliance to the mix, I fail to see how the energy industry could continue on without the re-organization happening first, and of course that won't happen until such time as this software is operational.

Technorati Tags: Genesys, Langlois, Capabilities, Firm, PPDM, Research, Organization

"Waging the War of Ideas"

This historical and valuable book is freely down loadable from the Institute of Economic Affairs (IEA). The IEA is a think tank devoted to the ideas of Frederick von Hayek, the Nobel Prize winning economist that is the father of most economic thought in the world today. The influence of Hayek is as strong as Keynes and only began to receive public support through the policies of Thatcher and Reagan in the 1980's. The IEA has gone on to start over 100 other "think tanks" such as Canada's own renowned Fraser Institute. Spreading the ideas of Professor Frederick von Hayek far and wide.

This book chronicles the genesis of the ideas of Hayek from the publication of "The Road to Serfdom" to today. The parties and participants provide a rich history, an easy read and worthwhile review for all. The book is also a call to action for anyone to keep their eyes and ears tuned to the return of a socialist mindset and its insidious destruction of individual freedoms.

The main point of the book provides an interesting contrast to today's business environment. Although the business and political (or economic) domains are different, they share many similar faults. Today I see many of the CIO's of producer organizations taking the planning of economic action to a ridiculous level. Command and control is prevalent in the mindset of most of the CIO's in the producer companies. I would draw the parallel between what Hayek et al were battling governments for the rights and freedoms of individuals over the last 60 years. Two similar battles between the market and firms in business today. Therefore the lessons learned by Hayek et al, may provide some pertinent knowledge in how to deal with these issues today.

Specifically the bureaucracy has complete control of all aspects of the marketplace. As I have written here before, this mindset is justifying itself by way of the fact that the market has failed to provide the oil and gas producer with the appropriate number of drilling rigs, resources, systems and tools etc. This thinking has all but eliminated the market from their conscious thought of the firm and has lead to a serious decline in the performance of the industry, particularly in consideration of the market demands for energy. The appropriate division between market and firm being along the lines of the discussion as represented in this table.

Here are some of the more precise points that I would draw a parallel too. Starting off in Chapter 2 "Waging the war of ideas: Why there are no shortcuts."

"The Key strategic insights from these writings can be summarised as follows: pp. 35

"Practical people who concern themselves solely with current day-to-day problems tend to lose sight of, and therefore influence on, the long run. This is because of their lack of idealism. In a paradoxical way the principled, steadfast ideologue has far greater long-term influence than the practical man concerned with the minutiae of today's problems." pp. 36

"Over the long run, it is a battle of ideas, and it is the intellectual - the journalist, novelist, filmmaker and so on, who translates and transmits the ideas of the scholars to the broader public - who is critically important. He is the filter who decides what we hear, when we hear it, and how we hear it." pp. 36

"The main lesson which the true liberal must learn from the success of socialists is that it was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion which is daily making possible what only recently seemed utterly remote." pp. 36

"Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our liveliest minds, the prospects of freedom are indeed dark. But if we can regain that belief in the power of ideas which was the mark of liberalism at its best, the battle is not lost. The intellectual revival of liberalism is already under way in many parts of the world. Will it be in time?" pp. 37

"To summarize Hayek's message: Keep liberal thought vibrant and relevant; recognize the importance of history; be principled and steadfast; avoid special interests; eschew politics and instead search fro leverage; recognise the critical role of the intellectual; and be Utopian and believe in the power of ideas." pp. 37

The consequence of my ideas is the reality of what my life has become. The scope and scale of the task ahead is ominous and yet my situation concerns me little. In the short time that these ideas have existed (May 2004, almost three years ago) I have clearly aligned myself against the vested interests (the CIO's) of the producer groups. I have also found that my thinking is aligned with those who are responsible for the producers long term health, and those that Sarbane's Oxely identified, the CEO and CFO's. Those that have opposed these ideas are the ones that should have embraced them and made them into reality. The marketplace of offerings from the competition to this software development is the equivalent of the city of Nagasaki after World War II. Nothing exists to provide the producer companies with a reasonable opportunity to function as a firm or as a market today, or in the near future. Talk of the competitive advantages of the various IT strategies does not even exist.

The market leader, IBM, with 70% market share, sold their application in a final capitulation of their frustration in dealing with these CIO's. The chosen solutions of Oracle and SAP, the ones recommended by the CIO's are now admitted to be inappropriate for the oil and gas industry. The CIO's, and particularly those that attend the Canadian Association of Petroleum Producers (CAPP) CIO committee, have micro-managed each component of the technology marketplace for their own interests, not of the firms. This task has been such an enormous effort that it has left them with the inability to see the future and provide leadership and guidance. They have betrayed their leaders and led them down the garden path of destruction by not providing the necessary systems to deal with the changes in the markets. Irrespective of the demands for ERP, the marketplace will be difficult to satisfy with so many companies seeking solutions with so little time and resources. The CIO's animosity towards the ideas articulated here have blinded them from their own ultimate demise. Absolute power corrupts absolutely. Hayek has more on this topic.

"As long as we are not duped into believing either that the battle is won, or that we can now employ shortcuts, the future for a society (markets) of free and responsible individuals is indeed bright."

Hayek had many insights and lived a difficult life as a result of the consequences of his ideas. These insights provide some value in this instance.

• "Pro-market ideas had failed to remain relevant and inspiring, thus opening the door to anti-market forces." (Double Check).
• "Peoples' knowledge of history plays a much greater role in the development of their political philosophy than we normally think." (Check).
• "Practical men and women concerned with the minutiae of today's events tend to lose sight of long-term considerations." (Double Check).
• "Be alert to special interests, especially those that, while claiming to be pro-free enterprise in general, always want to make exceptions in their own areas of expertise." (Double Check).
• "The outcome of today's politics is already set, so look for leverage for tomorrow as a scholar or intellectual." (Check).
• "The intellectual is the gatekeeper of ideas."
• "The best pro-market people become businessmen, engineers, doctors and so on; the best anti-market people become intellectuals and scholars."
• "Be Utopian and believe in the power of ideas. (Check)."

"...the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist... Soon or late, it is ideas, not vested interest, which are dangerous for good or evil." pp. 63

Needless to say the Tailor's (CIO's) of the emperors (CEO's and CFO's) clothes had turned thumbs down on the prospect of this development going forward. Providing their leaders with nothing for the future but blind hope. The opportunity to deal with this project on a go forward basis has been rejected by them, and now the ability for them to work in this environment will be difficult if not impossible on a go forward basis. The writing is on the wall from my point of view. I have detailed the issue as I see it here in these writings, and offered a constructive solution. The CIO's have had their opportunity, now its time for others to take their place. This will go down as one of the greatest failures in the city of Calgary.

As for me I will continue to write as the opportunities are provided. I will seek employment outside of the oil and gas industry and seek other businesses that may be considered progressive in their forward thinking, ones that will not cower at the thought of something new, logical and unique. I will also attempt to appeal to other clusters of the oil and gas industry and attempt to provide similar services to those that were summarily rejected by the Canadian producers. The future in the energy industry has never been brighter, nor more challenging.

Technorati Tags: Genesys, organization, development, failure

Engineering Systems Solutions to Real World Challenges: An Overview

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

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

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

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

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

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

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

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

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

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

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

Technorati Tags: Genesys, Innovation, Perez

The globalization of the Software industry: Perspectives and Opportunities for developed and developing countries

The title of this entry will take you to ideas.repec.org to download this interesting working paper.

Authors;

Ashish Arora
Heinz School, Carnegie Mellon University, Pittsburgh

Alfonso Gambardella
Sant' Anna School of Advanced Studies, Pisa, Italy

A quick review of this document reveals that the focus of the research is on developing countries software industries. Not really on topic with the research being done on organizations, however, it has provided some interesting academic support for the purpose of this project. Speaking in the conclusion of this document the authors note some interesting points of view that we may not have realized or found in our regular research travels.

The set of quotations are:

Some authors have argued that software is to the knowledge based economy what capital goods were to manufacturing - an input source whose importance for productivity and innovation was far greater than was reflected in revenues or share of GDP. Software does supply basic inputs to virtually every industrial sector. pp. 30

There may be some advantages to hav(ing) a domestic software sector which could tailor software to local requirements at lower costs. pp. 31

The software industry can act as an exemplar of a new business model that features flatter organizations, individual incentives, competition, and export orientation, particularly for other sectors that rely upon skilled workers. pp. 32

The study reviewed India, Ireland, and Israel (What it refers to as the three I's), China and Brazil against the American, German and Japan industries. A very good read for the purpose of better understanding the impacts of globalization on the software industry.

In terms of the three quotations, neither of these points, that I am aware of had been mentioned before. Yet these show clearly why the oil and gas industry must proceed with this project. Software is an effective tool for them to exercise new and innovative methods of finding and producing oil. Yet, I hear nothing with respect to the industry willingness or desire to proceed.

Technorati Tags: Genesys, Organization, Software, Strategy, Reference