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Posts Tagged ‘IT operations’

This week I attended the 2010 Digital Energy Workshop here in Houston. It is an event sponsored by the Society of Petroleum Engineers, Gulf Coast Section and a number of vendors to the energy industry. The intent of the workshop is to address the technologies and issues driving the evolution in the use of digital technologies in the E&P industry. As an old manufacturing guy, I have my own preconceived notions about the state of this evolution. In the manufacturing world we had to address the same issues a couple of decades ago. The process manufacturing world lives on slimmer margins. The E&P world has not had to face that reality until recently, and not that much even then.

The focus of this industry has been on optimizing drilling and maximizing recovery from a field (35% is a reasonable number). As such, there is quite a bit of material and work focusing on reservoir modeling, geological tools and the operations of the drilling process, such as directional drilling. But when we talk about what we call digital energy we are talking about the integration of data from downhole sources, operational data and business data in such a way that organizational silos are not constraints to business improvement. Good decisions are made faster than ever before. Since the Houston area is one of the primary centers for this industry this event attracts vendors who see digital energy as a major business opportunity.

Major industry vendors like Halliburton, Baker Hughes, Schlumberger, ABB and Microsoft were major sponsors. Other, smaller firms like OSIsoft, Merrick Systems, Business Fundamentals Group, MicroStrategy and Performix were also sponsors. While this list of vendors is not as large as it will be in the future, it does contain some major corporations with a major commitment to digital energy offerings. Microsoft and Merrick Systems were the only two with booths at the show. I suspect that it won’t be too long until we see SAP, Oracle, Emerson and Honeywell at this event. All of them have a story to tell to the E&P market.

I heard a few comments about OPC-UA vs. WITSML. Both are communications standards but differ in focus. OPC-Unified Architecture is intended to provide just that, a unified architecture for control equipment and instrumentation which allows the equipment from vendors that adopt the standard to work together automatically. This offers the customer lower costs and greater flexibility when they build their control systems. WITSML is somewhat similar but much more focused on the specific needs of the E&P industry. The point of the comparison is whether or not a more generalized standard is better than one focused on one industry. This sounds like a future blog post to me so I won’t pursue it here.

The various presentations we heard varied from high level overviews of what is digital energy and what’s next to specific case studies of individual projects. What struck me was the similarity to events I attended in my manufacturing past. Those past events, like this one, reflected an industry waking up to new possibilities and technologies. The fact that this was only a one day conference is consistent with the new but growing interest in the topic. The presentations from this conference will be posted in a few days and they, in turn, will also become fodder for my blog posts.

Another interesting point that struck me is that the Gulf of Mexico now has a lot of fiber optic cables connecting the platforms. This means that the bandwidth available for platforms to connect to their on-shore operations centers is dramatically greater, allowing many more options than for those which continue to rely on low bandwidth satellite connections. Conversely, many on-shore fields are still limited to cellular or satellite connectivity. The ramifications of this seem to me to be worth yet another future blog post. Integrated operations of a geographically disperse collection of equipment using different connection pipes (bandwidth) using standardized applications is an intriguing concept.

Finally, one last observation was the literature review that the organizers did. Initially that seems like a dry topic (well, actually it was still a dry topic at the end). What stood out to me was the number of case studies that reported notable savings. Each study was a little different but, collectively, the direction was the same. This industry is starting to understand how to make and save money with this technology. As the number of these types of case studies increases, the number of use cases available to software developers and hardware manufacturers increases as well. That implies rapid growth in product features and diversity. It’s all good.

As you can see, there will be more posts from me on these topics in the future. Stay tuned…

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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:

• Data/Process Location & Isolation
  
  • Security, privacy & ownership
    
• Regulatory, Compliance & Policies
  
  • Limits, e-discovery, investigations
    
• Portability between Providers
  
  • Lack of standards, vendor lock-in
    
• Provider Trust Management
  
  • Transparency to provider operations
  • Immature vendors and certifications
    
• Uncertain Failure Remediation
  
  • SLA guarantees, redundancy
    
• Integration and Process Integrity across the cloud
  
  • Technical & Support issues
    
• Bandwidth & Latency
  
  • 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…

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This post is both a continuation of the theme I started in the IT Maturity in E&P post and some observations from this week’s Offshore Technology Conference (OTC) here in Houston. My goal was simple. I wanted to know what the industry vendors were offering regarding “digital energy”. This phrase is synonymous with other phrases like “digital oil field” and “intelligent oil field”, as just two examples. The idea is the same for all of these phrases. They refer to the more aggressive usage of all digital technologies in the energy industry. I like “digital energy” mainly because it is a more inclusive phrase so it’s the one I’ll use from now on.

First, a little information on the OTC. It is a very large show (approximately 60,000 attendees over 4 days) which primarily focuses on all aspects of oil exploration and production in the Gulf of Mexico, North Sea and Arctic locations. Information technology is not a primary focus but is definitely represented. That means that many of the vendors with a story to tell regarding digital energy aren’t spending much effort talking about it here in presentations. You can hear more about their plans if you talk to them at their booths on the exhibit floor. Most of the focus in the booths on all things “digital” revolves around control systems and techniques for day to day operation of an offshore rig. Companies like Emerson, Honeywell and Yokogawa are some of the main players here.

The concept of digital energy can be subdivided into improved exploration and drilling (subsurface) technology, improved process control of individual production facilities and improved orchestration of multiple production facilities. With the exception of the subsurface domain, the others are very similar to other process manufacturing domains. I believe the photo of the offshore platform complex provides some useful insight. This platform is divided into smaller, connected platforms. One for drilling and others for production (the flare stack is just another process step in production). Both the production operation on individual platforms and the orchestration of production from multiple platforms are less evolved subjects in the E&P world. While both domains have existed from the beginning of the oil industry, it has just been in the last decade or so that those subjects have gained serious attention. In both areas, E&P can gain much from a closer examination of the process industry.

Companies like Schlumberger and Halliburton are addressing these areas and had something to talk about at the OTC. In my opinion, both are moving in the right direction but are several years away from a complete vision. Unfortunately, due to schedule congestion, I was unable to walk the exhibit floors as thoroughly as I would have liked. There may have been others there with a story to tell in digital energy. If anyone feels that I left out some vendor that should have been included, please post a comment with their name and a URL.

At the bottom of this post is a graphic showing various types of offshore platforms and some typical seabed equipment. This is actually a poster and clicking on the it will take you to their website for a copy of your own. This graphic is here for those not familiar with the subject of offshore drilling. It provides a useful overview of the complexity of operations that must be managed. Remember that in this diagram the sea floor is well lit and fairly shallow. In real life the sea floor is pitch black and several thousand feet down. The work is primarily done by robots. Fortunately, the digital energy domains I focus on reside on or near the surface and in land based control rooms. The operators in the North Sea have been developers and early adopters of shore-based control rooms. A good example of them is Statoil out of Norway.

In conclusion, it’s safe to say that at the OTC digital energy meant mature process control of offshore platforms and a maturing vision for everything else. I will be interested to see what changes by next year.

That’s it for this post. Thanks for stopping by.

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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…

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The purpose of this post is to address the issue of the security of cloud based applications from the perspective of the CIO of a midsize company. His focus would be primarily on prudent cost reduction opportunities. I will not attempt to provide an in depth technical discussion here. I will provide some useful links to such discussions. However, I don’t think a midmarket CIO, or CXO, would be well served by loosing himself in the technical details at this point. It’s all evolving too fast.

As I researched this topic I was initially amazed at the amount of information. After I thought about it for awhile I realized that this was a hot and rapidly evolving topic, so this volume of information is to be expected (and I’m contributing to it myself with this blog post). My research has been fairly extensive but not exhaustive. I could have easily made this a white paper taking months. It will also be dated fairly quickly. Like I said, this subject is changing quickly.

The first item of business is a definition of some useful terms. I will standardize on the definitions provided by NIST (National Institute of Standards and Technology). The link to those definitions is here and a link to a cloud computing overview is here. I like the NIST definition: “Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” The other document at this site is a 92 page PowerPoint presentation. I think it is useful but lacks sufficient material in the speaker’s notes.

I am a big fan of Gartner’s Hype Cycle diagrams. Over the years I have found them to be a good way of representing the expectations we have of technology. I have included an overview below. A link to the Gartner site is here.

Every technology category is typically represented by a point on the curve. That point is color coded to indicate how fast it is moving through the cycle. If you want more details on this I encourage you to go to their site and sign up for their free registration. In Figure 1 I overlaid a red line on that section of the curve where I believe cloud computing is today based on Gartner’s predictions as well as other sources. We are clearly at or near a peak of enthusiasm and expectations for a new technology.

Figure 1 – Cloud computing expectations

One concern that I have is that when I have talked to people in midsize or small companies making a decision on how to use cloud computing all I hear about is the opportunity for cost reduction. That opportunity is real but the decision is not just about cost reduction. It’s also about risk exposure and that means security concerns. One document that details those risks is from ENISA (European Network and Information Security Agency). Its link is here. Be warned, this document is not for the faint of heart. It is large and detailed but does offer a comprehensive list of risks. Another less detailed source of cloud security insight is provided in an InfoWorld article on a Gartner report. Its link is here.

One thing to remember is that using cloud computing usually means virtualized applications made available over the internet. A useful but detailed discussion of virtualization can be found here. There are several types of virtualization risks such as attacks on the hypervisor, attacks on automated provisioning and problems in digital forensics due to mobile locations of virtual machines. Detailing each of these examples generate a significant amount of information and is beyond the scope of this post.

We should also briefly touch on the major players providing cloud based infrastructure and development environments. The three big names in these areas are the Google App Engine, the Amazon Elastic Compute Cloud (EC2) and Microsoft’s new Azure Platform. For these offerings, you rely on either secure data center operation or the security capabilities of their development tools. Cloud computing is new to most developers as well. Their skills in using these tools are still maturing, including security.

It would be easy to discuss various risks almost indefinitely. However, that wouldn’t address the main concern of making an informed decision on what to do with cloud computing now. As you can see from Figure 1, I placed a red line over the region of the curve which represents the earliest time for mainstream adoption. The period between where cloud computing is today and mainstream adoption starts is a time for trying out this technology. I recommend a trial that doesn’t involve sensitive company data but is non-trivial. Such a trial will provide insight into the management of cloud based infrastructure, applications and working with cloud vendors. It will provide an opportunity to gain experience in relative safety.

For example, I am part of the Google Wave beta program. If interested, check out this link or the Google site. In addition to that, I am working with Itensil on a new product which leverages Google Wave with its other existing products for collaborative, wiki-based consulting project work. For me it’s a great opportunity to learn more about using cloud computing to do something relevant for my business. That work could eventually lead to a significant competitive differentiator. For a business IT alignment consultant, it’s putting my money where my mouth is and aligning some cloud IT to my own business.

For a blog post, this one is long. As a discussion of the security of cloud based computing, it just scratches the surface. The recession has accelerated the adoption of cloud computing and the recovery will accelerate its adoption further. Midsize and smaller companies will be most of the early adopters of cloud technology along with a few large corporations. Security concerns will be the throttle that regulates the speed of adoption. As cloud security is resolved I think we are in for some very transformational times.

Thanks for stopping by and stay tuned for more…

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