Understanding Cloud and Grid Computing in Enterprise Environments
And Analyzing the Technology Impacts to the Energy Industry
To say that today’s society is dependent on technology is an understatement. Advances in technology have cured disease, provided food for thousands and connected people across states, nations and continents in new and exciting ways. With each technological step forward new doors are opened that provide opportunities thought previously unobtainable. Those who intelligently embrace technology are rewarded; those who don’t are left behind to fade into obsolescence. The energy industry is no stranger to technology, and the most successful energy corporations that exists today leverage technology heavily to improve operational efficiency, forecast and mitigate risks and provide greater transparency to shareholders, boards and regulating entities.
As critical as technology is to continued success, it is not always a proven formula. Not every concept, widget or platform is readily adopted and able to produce positive results, which makes the question of “what’s legit, and what’s just hype” one of the prevalent factors in making intelligent technological decisions. Taking the wrong technological direction can be a very costly mistake that is difficult to recover from. Choosing the wrong smart-phone, or buying the wrong laptop, while inconvenient, is nothing compared to the capital and competitive losses suffered by corporations that make the wrong decisions on enterprise platforms and infrastructure.
In today’s technology market, two new buzzwords are swarming about the heads of technology officers everywhere: Cloud and Grid Computing. If these concepts are not familiar yet, they certainly will be over the course of the next year. Neither of the concepts are exactly new, but advances in software security and a better ‘dollars-to-processing power’ ratio for hardware are certainly making them viable and attractive. The adoption and packaging of these technology concepts by innovative firms such as IBM and Google have brought them center stage and have forward-thinking companies scratching their chins.
What exactly are Cloud and Grid computing?
Cloud computing is really an old concept with a new name that provides an alternate model of computing in which “processing, storage, networking and applications are accessed as services over networks—public, via the Internet; or private, via intranets [IBM http://www.ibm.com].” Sound familiar? It should. Companies have leveraged hosted solutions and company intranets for years to solve business challenges, and the concept is rather straight forward: you put your data into a “cloud,” which makes it accessible anywhere, at any time. Google Apps and Salesforce.com are both excellent examples of companies providing full-featured software as a service via the World Wide Web (figure 1). The obvious benefit of Cloud Computing is the way in which services, applications and data are made into easily consumable components available across organizations regardless of geographic location.
Grid Computing is another aged computing methodology that has been re-branded and marketed as the next big thing. Grid Computing takes the same approach as distributed computing models and goes a step further. Distributed computing models have generally been implemented within secure, private networks across clustered application servers that perform specific, focused computational tasks. Grid Computing expands the scope and flexibility of the computations as well as the geographical footprint of the server clusters, or nodes, responsible for computing. Quite simply, Grid Computing expands parallel computing power to make full use of the computational cycles you have available across all available nodes—a node being a server or workstation plugged into the Grid (figure 2).
The technology opens the door for the implementation of large computational farms capable of providing processing power for hire. The Search for Extra-Terrestrial Intelligence (SETI) project has made use of untapped processing cycles on personal computers by providing a small application to interested volunteers called SETI@home. SETI@home will make use of idle personal computers to analyze radio signals for signs of extra-terrestrial intelligence, and depicts the model that Grid Computing conforms to. Anyone with interest can download the simple, lightweight software package, install it on their personal computer, and help SETI crunch numbers while idle.
Both technologies have existed, albeit on a smaller scale, within enterprise environments for some time, but the operational road-blocks that have kept them out of wide-spread use have only recently been removed. For instance, the hindrance to general acceptance of Cloud Computing has been security and available bandwidth. The idea of maintaining sensitive data within a hosted solution is terrifying for most organizations, and providing timely access to the data is just as much of a concern; however, the advanced security features made available within enterprise development platforms and the ever-improving accessibility of broadband networks have made the concept an easier pill to swallow.
The emergence of these technologies have given birth to a smattering of software companies across varying industries that offer full-featured software as a hosted service rather than the traditional, locally installed methods. This is good for all parties, as the total cost of ownership of business solutions for consumers have dropped, and software companies are realizing the benefits of residual, reoccurring revenue and an overall reduction in support overhead. Of course, these technologies are not a one-size-fits-all solution, and the pro’s and con’s must be weighed before implementing a Cloud or Grid Computing solution, but the knee-jerk roar of “no” answers that were once heard echoing out of technology offices today have subsided to quiet pondering.
Does Cloud and Grid Computing Have a Place in the Energy Industry?
The very short answer to whether Grid or Cloud Computing has a place within the energy industry is quite simply, “yes,” and vendors are beginning to offer services and solutions that make use of these advanced technologies.
There are many un-solved business challenges which, given careful thought and planning, could be remedied by implementing a Grid or Cloud Computing platform. The most obvious challenge to highlight as a probable candidate for Grid Computing would be the computation of market data to derive risk and trading analytics for diverse and complex energy portfolios.
Valuing portfolios and simulating forward markets are data intensive functions that can take hours, and even days, to complete dependent on the size of the portfolio being analyzed. Grid Computing offers an exciting new approach to traditional n-tier Commodity Trading and Risk Management solutions, which have relied on expensive, dedicated application servers to crunch and provide business-critical data to traders, schedulers and risk analysts alike. Instead of proprietary server clusters solely dedicated to a specific solution, Grid Computing can make use of idle computational cycles across multiple solution domains by intelligently throttling and distributing tasks across all available nodes with the grid. This could change the overall strategy employed by commodity trading firms in regards to systems selection and implementation.
While Grid Computing boosts processing power and efficiency, Cloud Computing boosts data collaboration and accessibility. Multi-national trading operations with joint strategies could benefit from Cloud Computing solutions to promote date re-use and make accessible market sensitive data and services. For example, computed data from a North American trading operation can be quickly and securely shared with partner companies operating in the United Kingdom, or else where, through the “Cloud.“
As stated previously, neither of these concept are new, but the coupling of this technology with inexpensive bandwidth and rapid application development via interpreted languages, adds significant flexibility to organizations who continuously struggle with their traditional system infrastructures. Energy trading organizations stand to benefit heavily from the advancements made in Cloud and Grid Computing by increasing systems efficiency and accessibility while reducing infrastructure and support over-head, which is considered ‘just the cost of doing business today.’ Just as the personal computer replaced the mainframes of old, the companies who embrace these technology concepts today will be seen as the innovators who helped usher in a new era of computing.
About the Author
Anthony Hill has over 10 years of experience architecting, developing and implementing energy-based software tools and platforms for energy trading organizations. His strong technical background and passion for the commodity trading business has made Anthony an effective project manager and a highly skilled and valuable business analyst and consultant within the industry. Anthony Hill is the Director of Energy Solutions for Principal Energy Group and has leveraged his previous successes to aid clients in making strong technology decisions within the energy and commodity trading industries. For more information or to ask a question, contact Anthony Hill at Anthony.Hill@principaleg.com, or visit our website at http://www.principaleg.com.