IT operations
Microsoft and the Energy Industry
The new issue of Digital Energy Journal (Issue 25) is just out. In it is an article about Microsoft’s new products and directions relevant to the energy industry. With my interests in IT leadership, manufacturing operations and E&P surface operations, I was immediately compelled to read it. Since I have a long history with Microsoft both as a customer and a channel partner I have some well entrenched ideas about how Microsoft fits into the manufacturing and energy world (mostly good with a dash of frustration).
As I read the article, a couple of points jumped out at me. First is the use of the Xbox 360 with the upcoming Kinect user interface device (shown in the image on the right). It is a controller-less device that allows the user to control a game like a Nintendo Wii but without any hand held controllers. This device is primarily intended for the gaming world but has potential for the manufacturing and E&P worlds as well. For example, Halliburton Landmark has just announced a new application called GeoGraphix Discovery 3D. It will build on their GeoGraphix product and make that visualization environment easier to navigate.
What got me excited is the ability to apply an Xbox/PC/Network system to create business visualization environment at an affordable cost. Many of us are old enough to remember when cell phones were big, expensive and had to be installed in your car by a technician. We can also remember what happened to their use when cell phones got cheaper and more portable. Their use grew geometrically as well as their applications. Now consider the large and hugely expensive visualization environments now sold to the E&P industry. Then consider what happens when you can have something acceptably close to the same functionality but on commodity hardware. The cell phone evolution gets replayed for visualization systems.
Now let’s consider what happens when that same commodity visualization environment gets connected to 3-D CAD environments of manufacturing plants and E&P surface operations along with other business applications. Now combine that new mix of tools with a more highly regulated and monitored operational environment. That will happen thanks to incidents like the current BP spill in the Gulf of Mexico and numerous industrial explosions, fires and chemical releases. The best way to image what I’m talking about is through an example.
Let’s image we’re in an ordinary conference room. We’re facing a wall with three large screen monitors in a row. On the middle monitor is a 3-D model of a process manufacturing plant, offshore platform or some other organized industrial collection of pipes, tanks, buildings and equipment. As we walk through this facility we can reach down and touch a piece of equipment as we pass it. When we touch it, its spec sheet and maintenance history are displayed on the screen on the left. If we are concerned about what we see we touch the equipment again with another gesture of our hand and we dictate a note to be attached on that piece of equipment. That note appears on the screen on the right and a flag appears on the equipment shown on the center screen, indicating the need for follow up. All of this data can also be displayed and accessed in a more tradition way on PCs or laptops located elsewhere (or in the same room). This kind of scenario could have applications for the management of these operations to be able to more easily survey and diagnose issues in their facilities. Connecting to a master data management system would allow such a system to be applied to multiple, similar facilities and managed together more easily. Environmental, maintenance and operational data can be displayed together in more intuitive ways. That can lead to the avoidance of future problems of all sorts. This is industrial strength business-IT alignment.
You can use the above example as a base from which to imagine a scenario more specific to your own experiences. Just don’t forget that we’re seeing this using commodity hardware and lower cost software. This puts such a system within reach of mid-sized manufacturers, energy and service companies. That’s a game changer for those mid-size companies.
The second point that jumped out to me in the article was Steve Balmer’s vision of the energy industry’s migration toward cloud computing. He’s probably right but I struggle with that idea when applied to large quantities of data that need to be brought down to a local system for use and analysis. It really depends on how cloud computing standards, security and infrastructure evolve. I have commented on cloud computing issues in the past so I won’t do it again here. If you’re interested, just click on the cloud computing tag in the tag cloud to the right of this post.
In summary, I think that whether you love or hate Microsoft they are one of the very few companies that can provide a sufficiently diverse, integrated set of applications and devices to allow the creation of such architectures at relatively low cost. Let’s hope that Steve Balmer’s vision for the energy industry can become reality and not get bogged down in bureaucracy or drifting priorities along the way.
Thanks for stopping by. Stay tuned for more…
Brokering Clouds
I recently attended an interesting presentation on cloud computing (I’m a sucker for the topic). It was just another perk for being a member of the Houston SIM (Society of Information Management) chapter. The presenter was Gene Phifer, Managing Vice President at Gartner. It covered a history and other background information as well as an interesting perspective from Gartner. I have included a couple of slides here but, unfortunately, I am not able to provide the entire presentation.
While acknowledging the benefits that we have all come to appreciate, he also included a warning of the existing problems. As I have pointed out in previous posts, there is a lot of excitement on the benefits but not enough attention to the risks (they will all eventually be addressed, but not for a while). In my official role as the cloud computing Grinch I want to be sure to draw your attention to the risks associated with those tantalizing benefits. From the Gartner presentation they are:
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Data/Process Location & Isolation
- Security, privacy & ownership
- Security, privacy & ownership
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Regulatory, Compliance & Policies
- Limits, e-discovery, investigations
- Limits, e-discovery, investigations
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Portability between Providers
- Lack of standards, vendor lock-in
- Lack of standards, vendor lock-in
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Provider Trust Management
- Transparency to provider operations
- Immature vendors and certifications
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Uncertain Failure Remediation
- SLA guarantees, redundancy
- SLA guarantees, redundancy
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Integration and Process Integrity across the cloud
- Technical & Support issues
- Technical & Support issues
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Bandwidth & Latency
- Accessing or integrating “clouds”
- Accessing or integrating “clouds”
- Licensing Issues
- Uncertain Financial Models
Now that I have fulfilled my “party pooper” responsibilities I can return to my usual optimistic tone. His presentation went on to highlight the aggressive expansion of both Microsoft and Google into more sophisticated cloud offerings. While Google’s preferences are not surprising, seeing all of Microsoft’s offerings shown on one slide was interesting. While I was aware of each of their cloud based products, seeing them listed together was enlightening. Microsoft is making a real push into cloud computing, which is quite a balancing act for them.
Then the presentation moved into its most interesting phase for me. We started covering the development of cloud applications and assembling them into solutions to business problems. There is now a large selection of application development environments available and covering a broad range of sophistication. The Spectrum of Cloud Computing slide above showed up in this section of the presentation. I like it because it captures the various cloud environments that are possible. It’s easy for the definitions of public, private and hybrid cloud environments to blur. This slide captures the spectrum with a little more granularity and 
clarity.
One point that stood out to me was the idea of cloud brokers. While I’ve heard of cloud brokers before, I hadn’t paid much attention to the concept. It’s actually an intriguing concept once you imagine a future where the cloud-based applications and services are more plentiful, complex and available. The slide on the right is handy for visualizing the attributes of brokers.
There were other slides in the presentation that emphasized how complex these ecosystems will become and the need for brokers will grow. I found a handy resource guide for such brokers as of this moment in time. Its link is here. I found another article on selecting a cloud service broker that is consistent with this presentation. Its link is here.
I am now convinced that the notion of cloud service brokers will become very important to our business. Our target markets are mid-size manufacturers, mid-size manufacturing related service business and independent E&P companies with interest in the notion of Digital Energy. Understanding the cloud service broker universe is now a priority for us. It’s moved way up the priority list. I believe that the risks listed above will provide a useful list of metrics against which to evaluate these brokers. As we get into it, the list may vary a little but this list will provide a good starting point.
Since I am unable to provide you with a copy of the presentation, I would like to provide some alternative. I found a complimentary eWeek article and provide the link here. Stay tuned for future posts on cloud service brokers. They should be interesting.
Thanks for stopping by. See you next time…
Cloud Alignment – Part IV(Privacy)
This post is the last of the series on Cloud Computing addressing the business application of cloud based resources, focusing on midsize companies. It will also include the conclusion for the series which was originally was going to be Part V. The previous posts in this series are:
In this post we’ll focus on a recent report from the World Privacy Forum titled “Privacy in the Clouds: Risks to Privacy and Confidentially from Cloud Computing”. You can pick up a full copy of the report at their website. Recently, I also attended a presentation on cloud computing. The speaker is a Managing VP at Gartner. It was an interesting presentation and will be the subject of a future post. His pitch was very consistent with my earlier posts on the subject and has influenced this post. Agreement with my views just proves that Gartner has some visionary people on staff.
The tone of this report is sober and cautious. It emphasizes the exposure the terms and conditions impose on the customer by their cloud provider(s). I agree with this concern. As I’ve mentioned before, cloud computing is growing faster than it’s maturing. Standards and regulations are catching up but still have far to go. Another valid concern is the physical location of the data. For example, if the data is located on a server in the US it is subject to disclosure to the Federal Government (with a subpoena) under the Patriot Act. Many foreign companies specifically exclude US servers in their cloud contracts for just that reason.
For many midsize companies, the cost benefits are hard to resist. Essentially, a company exchanges the capital costs associated with building a data center for the operating expenses associated with buying computing power as services. That can be intoxicating and result in a smaller company rushing into the arms of immature cloud service providers. Clearly, it is not advisable at this time for companies to put their proprietary intellectual property in the cloud unless it’s a private cloud behind your own firewall. The main concern is the public cloud but that is also the most accessible source of cloud services.
The health care industry has its own issues with HIPAA and is a major issue in this report. The unintended release of health records for any individual to unauthorized use is about as severe a breach of privacy as you can get. There can be some circumstances where the Patriot Act and HIPPA conflict. I’m not a lawyer or politician so I don’t want to even think about that scenario.
One issue that I had not thought about directly is the scenario when a cloud provider goes out of business. There are now thousands of small companies growing up around cloud computing services. As we have seen over and over again in the technology world, a new technology is born, large numbers of companies vie for their piece of the rock, the field gets overcrowded and a “rationalization” occurs where the strongest survive and the weak can go down hard and fast. There may be some contractual language in the service agreements of those weak companies, but trying to determine how the customer’s data was managed during the dying company’s last days may be impossible to determine with confidence.
The WPF website offers these tips for business and government:
- Beware of “ad hoc” cloud computing. Any organization should have standardized rules in place telling employees when and if they may utilize cloud computing and for what data.
- Don’t put anything in the cloud you wouldn’t want a competitor, your government, or another government to see.
- Read the Terms of Service. Then read the Terms of Service again.
- Make sure that you are not violating any law or policy, by putting data in the cloud, and think twice before putting any consumer data in the cloud.
- Consult with your technical, security or corporate governance advisors about the advisability of putting data in the cloud.
These are simple, sensible guidelines to follow in your voyage into cloud computing. Check out their website for more details.
Conclusion
As we’ve seen over this series, cloud computing is here, it’s not going away and it’s going to grow faster than it matures. The promise is compelling and worth exploring, but cautiously. There are public, private and hybrid clouds. Each of which is appropriate for different purposes. Most of us are already using some form of cloud computing (have you every booked a ticket on an airplane, rented a car online or attended a webinar?) It makes sense that we embrace this technology carefully and expend the effort to be informed consumers.
I believe that eventually, most the problems and risks will be addressed to the point where we can sleep at night. That’s going to take a while. Until then, staying on the sidelines is overly cautious. Try out cloud computing on small, low risk projects until you’re comfortable and more knowledgeable. Then use it for where it makes sense.
I hope this series has been of value. Thanks for stopping by.
IT Maturity in E&P
I recently viewed a webinar on Exploration and Production (E&P) Technology Trends (link here ; registration is required). It was hosted by Hart Energy Publishing. The presenters were Halliburton (Landmark) and NetApp. The intent of the presentation was to promote Landmark’s software and services as well as NetApp’s offerings in data storage and data management. While both companies have impressive credentials in their own right, neither are analysts (as in taking subscription money from clients for vendor neutral, informed opinions). The presentation was interesting and credible in supporting their respective offerings. However, I believe that some interesting points were glossed over. I am not implying that they were misleading, just that the points that jumped out at me were not major points for them given their goals for this presentation.
Maturity
They presented the maturity model shown below. I have seen similar ones from analysts like Gartner and Forrester and this one is relatively consistent with those. A little later a Domain Specific – Data Management Maturity Assessment, shown below, was provided. While I find the maturity assessment diagram to be a little vague (the difference between the hexigon, square and circle shapes was never clarified), I assumed that each symbol represented an E&P company. The point the presenters made was that the E&P world needed help in managing and storing their Drilling and Engineering data (Landmark software generates Petabytes of data while NetApp can provide and manage the subsequent storage requirements). From the discussion this diagram it was implied that red is bad, yellow is marginal and green is good although that was not said specifically.
The point that was not mentioned is that the maturity assessment diagram implies that the “surface” domains, i.e., Operations and Business are in marginal or good shape. I believe their data implies something else. Later in the presentation we see the Production Data Management Challenges slide. There are three bullet points shown on that slide. All are big problems. The first two, Fragmented Solutions and Variations in Workflow, are huge. Those of us who have spend years managing operations and business organizations understand just how huge.
Spending
That brings us to another slide. The Data Management (DM) Investments in 1 to 3 Years. I have provided an image of the entire slide as well as a larger image of the graph portion. The larger image is to make the information easier to read and the entire slide is to provide context. In this slide the Landmark data tells us that in the 64 customers surveyed four of the top five budget items over the next three years address business and operations needs.
Conclusion
My point is actually very simple. It’s easy for E&P companies to focus on the downhole stuff. Just don’t loose site of where your competition is placing their bets for the near term. While that downhole technology is vitally important, getting the business and operations technology right can be a game changer too. It’s been the ugly stepchild of the E&P world for years. Now it’s time to let it out of it’s back room and let it join the party.
Observing Communications
I attended a dinner this week which had an interesting presentation. It was the monthly dinner meeting of the Society for Information Management here in Houston. The presentation revolved around the usefulness of IT leadership surveying their customers and doing some amount of statistical analysis on the results to understand customer satisfaction levels. I agree with the speaker that this is very useful and can provide IT leadership with insight on the perceptions of their customers.
The idea of IT leadership maintaining a clear understanding of their customer base is a big deal to me. However, statistics can’t do it all. During my tour of duty in IT leadership, I spent a non-trivial amount of time trying to understand how our customers saw us and our value to them. In my case, I spent more time talking with them directly than doing surveys (a luxury of a mid-size manufacturing company). What I concluded is that many problems are just communications and perception problems. I’m sure you’ve heard that before but it’s really true. In the world of IT operations it really boils down to vocabularies. In many cases, the business customer doesn’t have the IT vocabulary to articulate their problems to the IT support staff trying to help them. Conversely, the IT support staff often doesn’t have the business vocabulary to articulate their thoughts to the business customer. Communications suffer and customer satisfaction can go in the tank.
The customer shouldn’t be required to have an IT vocabulary (although it sure helps a lot). One solution to this dilemma is that the IT support group either needs each IT support person to have both vocabularies (very rare) or have a few “Translators” on staff to translate business speak to IT speak, as shown in the diagram on the right. The effect is that your IT support staff only needs sufficient business vocabulary to communicate with the Translator and the Translator only needs sufficient IT vocabulary to communicate with your IT staff. I would articulate this with a bridge metaphor, like to one implied by the diagram on the right. The simple idea was that half a bridge doesn’t get the job done.
When I added the staff to actually deliver on this idea, the results were dramatic. In larger IT organizations, such staff additions are becoming the norm but in mid-size companies resources are much leaner. Adding semi-technical staff to those IT organizations is a much bigger deal. I suggest to those of you in such organizations is that it’s worth the effort and will pay huge dividends. The idea of complementary skills is addressed in an earlier post called Alignment to the Core. It highlights that there are different frames of mind or paradigms that need to be bridged. The basic idea is that there is the paradigm where it tools (IT hardware and software) is the primary focus and there is the paradigm where the application of the tools (business uses, workflow, etc.) is the focus. As with the bridge metaphor these overlapping paradigms must communicate with each other as well.
As you can tell, I am a big fan of overlapping, complementary skills inventory in IT organizations. It’s the best way to align the IT function with the business requirements and people. I hope I have increased your interest as well.
Thanks for stopping by. Until next time…