1. 2 3Copyright IBM 2007 Life on an Instrumented Planet Colin Harrison IBM Corporate Strategy Member, IBM Academy of Technology Copyright IBM 2008

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3Copyright IBM 2007

Life on an Instrumented Planet

Colin HarrisonIBM Corporate Strategy

Member, IBM Academy of Technology

Copyright IBM 2008

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Agenda

• It’s a brave new world…• …with new challenges• What roles can IT play in this?• The Instrumented Planet• People, Places, and Data• Summary

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Agenda


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In the beginning there was paper…

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Then came information technology….

Institutional• Social Security• Credit card records• Telephone records• Tax records• Bank records (deposits,

loans, transactions, credit history)

• Passport views & visas• Travel records (airlines)• Toll records• Employment records• Traffic violations• Criminal records• Video surveillance

Personal• email• Click histories• Search/query histories• Purchase histories• Download histories• Explicit preferences/profiles• Implicit preferences• Networks (YouTube, Xing….)• Expressions (Blogs, Wikis…)• Intentions

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This also applies to “real-world” information

Environmental• Atmosphere (temperature,

humidity, velocity, pollution, cloud cover, 4D)

• Hydrological (depth, flow, temperature, turbidity, pollution,salinity…, 3-4D)

• Oceanographic (depth, flow, temperature, wave height, surge height, salinity, pollution, tsunami, fisheries…, 3-4D)

• Vegetation (forests, grasslands, deserts, agriculture…, 2-3D)

• Fauna (large mammal tracking…, 3D)

• Infrastructure (structural integrity, performance, congestion…, 3D)

Societal• Financial trading• Commodity trading• Employment• Production• Transportation• Energy consumption (gross &

individual)• Water consumption (gross &

individual)• GHG emissions• Carbon trading• Traffic movement• Supply chains• Inventories

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Process Innovation…

New Insight enabling…

New Data drives…

Data Capture & Control• Move data intelligently• Execute local commands• Run distributed operational logic• Integrate wide range of device

Manage Distributed Device Infrastructure• Discovery of devices and sensors• Remote configuration, updating, “no touch”• Monitoring



Event Processing & Services• Complex event processing• Services such as: Data Aggregation, Geographic

information, Identification and Association, Condition, Monitoring, Command and Permission, Persistence

Data Modeling & Integration• Domain specific information models• Interoperable information framework• Integration with legacy data• Federated data management

Analytics• Domain specific analytic applications• Apply and develop mathematical models• Provide performance dashboards





Business Optimization• Model business processes for optimization• Apply mathematical optimization techniques• Optimize assets and processes

Business Process Services• Event driven SOA processes (i.e. traceability)• Sense & respond dynamics• Enterprise application integration• Align with business strategy

Process Integration• Extend legacy and enable new business

processes• Monitor business processes• Provide information to people• Improve operational logic and business rules





… within a “backplane” of Scalability, Security, Privacy & Standards

New Data, New Insight, New Processes

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Agenda


IBM Research

© 2007 IBM Corporation 11

Energy Prices and Reserves

0

50

100

150

200

250

300

350

1991 1994 1997 2000 2003 2006

Oil (dated Brent)

Gas basket

Coal basket

Weighted average

Index 1991=100

0

10

20

30

40

50

60

70

1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006

Average 1979-85 $30.40

Average 1986-99 $17.86

Average 2000-04 $29.01

Brent equivalent 1973-2006 (money-of-the-day)

0

1,000

2,000

3,000

4,000

5,000

6,000

Oil Gas Coal

R/P Ratio 41 yrs.

R/P Ratio 67 yrs.

R/P Ratio 164 yrs.

Proven Proven

ProvenYet to Find find

Yet to Find find

Yet to Find

UnconventionalUnconventional

Reserv

es &

Resou

rces (

bn

boe)

Reserves/Production (R/P) ratio - If the reserves remaining at the end of any year are divided by the production in that year, the result is the length of time that those remaining reserves would last if production were were to continue at that level.

Oil Gas Coal

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Oil and metal availability is also becoming an issue…

• We or may not have reached “peak oil”• All of the copper in ore, plus all of the copper

currently in use, is required to bring the world to the level of the developed nations for power transmission and construction.

• Platinum risks depletion because it is difficult to recover from catalytic converters and only located in specific sites.

• At present rates of consumption, minerals due to run out within 50 years are copper, lead, mercury, nickel, gallium, tin and zinc.

• Aluminum ore is expected to be depleted in about 250 years

UN 4th Global Environmental Outllook. IHT Oct 25, 2007

Metal stocks and sustainability R. B. Gordon*, M. Bertram and T. E. Graedel, Proceedings National Academy of Science, Jan 2006

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Climate change is unequivocal

• “Slowing or even reversing the existing trends of global warming is the defining challenge of our ages”

• From 1900 to 2005, precipitation increased significantly in eastern parts of North and South America, northern Europe and northern and central Asia but declined in the Sahel, the Mediterranean, southern Africa and parts of southern Asia

• Rate of global average sea level rise has risen from 1.8mm/yr to 3.1mm/yr from 1961 to 1993

Source: 27th Session of the IPCC, November 2007

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Water usage patterns are as unsustainable as our carbon emissions

Source: World Resources Institute, in JP Morgan, “Watching Water”, April 1st 2008 (emphasis added to quote)

“The food and beverage sectors are heavily dependent on water for productions of inputs as well as of final goods. Their water use is so vast that it affects overall water availability in a significant way. We estimate that the combined direct consumption of five food and beverage giants, Nestle, Unilever, Coca-Cola Co, Anheuser-Busch and Danone approached 575 billion liters per year, enough to service the daily water needs of everyone on the planet”Note that this excludes indirect consumption, for example at agribusiness and canning suppliers!!

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Water, energy and carbon are heavily interrelated

Water consumption

Pumping Demand

Energy Demand

Carbon emissions

Water Treatment Demand

+

+

+

-

Potential Energy*

+

+

* Potential energy from water temperature and/or pressure that can be harvested within a plant

+

+

+ = positive driver (eg more water consumption = more pumping demand)

- = negative driver (eg more potential energy = reduced conventional energy demand)

Oil Refining

+

+

Bio-fuel production

Gasoline etc

+-

-

Nuclear Power

+

+ Conventional Power

++

+

(Alternative Power)

-

+

+

Beneficial “green” impact

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Three Hard Truths

• Three Hard Truths*– Global demand for energy is rising– Global energy supply is not rising– Burning fossil fuels is bad for the environment

• For ‘energy’ read also {water, food, minerals, capacity of public infrastructure}

*Source: Royal Dutch Shell Group Strategy

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“We have been here before”

• “Limits to Growth”, 1972– “Oil will run out in 1992”

• Assumptions of exponential growth not fulfilled

• Availability solved through innovation

• Process efficiency improved

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Enterprise, Government,

Individual

How does Climate Change become manifest for our customers?

1. Costs & Other Risks– High & Volatile energy prices– Security of energy supply

concerns– Scarcity of water supply– Scarcity of raw materials– Infrastructure capacity– Threats to competitiveness– Physical risks (extreme weather)– Litigation

2. New Business: Product & Service Opportunities

– Clients “voting with their wallets”– Operational Efficiencies

3. Reputation: Stakeholders Pressures

– Investors (Disclosure)– Brand/Customers (PR, Corp.

Social Responsibility)– Employee / Talent Management

4. Regulation & Legislation

RegulationTo reduce emissions of greenhouse gases such

as the EU Emissions Trading Scheme,

Climate Change Levy, and Building Regulations

ReputationPressure from investors,

employees and consumers about the

environmental and economic consequences

of climate change

New business(Positive Economics)

Developments in markets, knowledge and new technologies, which enable business to cut their carbon emissions

while increasing productivity and finding potential new revenue

opportunities

Costs & Other Risks

(Negative Economics)

Rising costs of energy, transport,

waste disposal and raw materials;

physical risks of global warming

Source: Inspired by Carbon Trust –

Carbon Management White Paper

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Agenda


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Recognition of the Role of IT is Emerging

The Bad News: IT accounts for 2% of global CO2e emissions

The Good News: IT can significantly contribute to control and reduce the 98% of CO2e emissions caused by other activities and industries

Source: Gartner, Green IT, October 12, 2007

21 © 2008 IBM Corporation

Measure & improve transportation usage Reduce traffic congestion Reduce CO2 emissions Increase mass transit usage Reduce energy usage Improve environment

Intelligent TransportationSystems

Intelligent Utility NetworksMeasure & improve energy mgmt Reduce usage, reduce outages Improved grid management

CarbonManagement SolutionsMeasure & reduce carbon emissions Strategy Customer and product Supply chain People IT strategy Property and buildings Information Recycling Waste management End of life services

Applying innovative information technology and services that really matter to businesses, governments, people and the planet

IBM Energy and the Environment Blueprint

AdvancedWater ManagementMeasure & improve water mgmt Flood avoidance Weather event management Improved water quality Reduced water usage

Create &manage efficient IT IT facilities infrastructure efficiency IT operations efficiency Active energy management Monitoring and verification

of efficiency goals Demand-side efficiency

Energy EfficientTechnologies and Services


The Olympic Peninsula GridWise Demonstration Project created a real-time energy marketplace for consumers

150 & 350 KWPower Generator

Application Server

600 HP Water Pump

Thermostat

Space HeaterWater Heater

Meter

LCM

GFA

LCM

Dryer

Energy Market

Port Angeles Water Supply

PNL MSL

Pacific Northwest National Lab Shadow Market

Load Shedding Heat

Storage

PNL Application Web Server

Internet

Additional DR

Control/ Application

Server

Residential Home

Invensys Home Gateway

125 Residential Homes

Invensys Application/ Web Server

IBM: Event Bus & Event-based Programming Model

Three experimental groups plus control group

In time-of-use group, rates paid by consumers differ by time of day and available supply.

In the real-time group, consumers specify temperature set-point and comfort versus economy

Settings become bids in a real-time energy market on 5 minute cycles

In the fixed rate group, payments are calculated as is customary.

Source: D.J. Hammerstrom et. al. Pacific Northwest GridWise Testbed Demonstration Projects, Part 1, Olympic Peninsula Project.; Prepared for US Department of Energy under Contract DE-AC05-76RL0130; Pacific Northwest National Laboratory, Richland, Washington, 99352.


“Greening” Existing “Brown” Increasing Adoption of Green Increase efficiency through

intelligence and optimization Transform energy sources and public

infrastructureIntent

Near-term: Realize current offerings Medium-term: Scaling and realization

Medium-term: Development Long-term: Scaling and realization

Timeframe

Key IBM Opportunity

Areas

Green technologies are not fully developed, marketable, or enabled by existing consumption and supply infrastructures today

Know how in IT to increase scaling of alternate technologies

Rationale Efficiency gains driven by new

economics, information and processes require measurement, analytics and management

Estimated potential for 30% reduction ($1.3T) of energy usage and emissions

Extension of Current Business

−Green Tech. & Services, Green SigmaTM

Growth Platforms

–Smart Infrastructure (e.g., Intelligent Utility Networks, Intelligent Transportation Sys.)

–Modeling & Analytics (e.g., Weather Forecasting, Nuclear Reactor Simulation)

Licensing Intellectual Property−e.g., Photovoltaic, Water Desalination

Growth Platforms−Core Research (e.g., Energy Storage)−Smart Infrastructure (e.g., Micro-

generation Management) −Modeling & Analytics (e.g., Public

Infrastructure Modeling)

IBM’s strategic intent is to increase the efficiency of today’s systems and enable our clients’ “Green” strategies

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Areas for research

• Science– Physics, Nanotechnology, Electrical Engineering– Synthetic Biology– Climate Physics, Hydrology, Seismology

• Math– Multivariate optimization– Machine learning– Simulation

• Systems– Semiconductor Physics, Device Design, Package Design– System Management, Virtualization

• Software– Efficiency – embedded software– “Power-aware” applications– System S – real-world aware computing

• E-Business– “ERP for Utilities”– Instrumented Planet

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Agenda


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Data & analytics for trading, hedging in emissions exchanges

Data & analytics to optimize

energy efficiency

Data & analytics to optimize

carbon footprint trade-offs

Data & analytics on weather impact on

economic/social activity

Information Utility businesses are high-margin businesses; for example, Moody’s has a 60% operating profit margin on annual revenue slightly greater than $1B

Source: Reuters, company 10Ks

Va

lue

/ P

rofi

t

Information Utilities for Finance & Environment

WorldCheckWorldCheck

Information with network effect

value-addInformation with analytic and business process value-add

Information Utility Value Creation Information with

network effect value-add

Information with analytic and business process value-add

Aggregated energy & climate

data service

Carbon footprint ratings for

companies & organizations

Carbon value standard for products &

services

Information Utility Opportunities - Illustrative

Organized Data

Derived Data

Contextual Data

Industry Standard

EquifaxEquifax

Carfax (Polk)Carfax (Polk)

Getty ImagesGetty Images

Stewart InfoServices

Stewart InfoServices

MarkitMarkit

ChoicepointChoicepoint

NavteqNavteq

aQuantiveaQuantive

BloombergBloomberg

IMS HealthIMS Health

Risk MetricsRisk Metrics

Moody’sMoody’s

NielsenNielsen

Fair Isaac(FICO)

Fair Isaac(FICO)

MorningstarMorningstar

Organized Data

Derived Data

Contextual Data

Industry Standard

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Life On An Instrumented Planet

Atmospheric monitorsSatellite imagingRiver & Aquifer monitorsOcean monitorsEnergy productionEnergy consumptionWater productionWater consumptionTraffic flowPublic TransportationPublic InfrastructureSupply Chain OperationsProduction OperationsSmart BuildingsSmart InfrastructureVideo surveillance….

Data Acquisition

& Management

Modeling, Analytics, Machine Learning

Intelligent Earth Systems Platform

Domain Insights

Business, Public & Private

Decision Making

Operational Processes

Process Integration

Business Domain

Expertise

Source Domain

ExpertiseAlgorithmic Expertise

Networking & Data Mgmt

Expertise

Energy Efficient Computational

Platform Expertise

The Bloomberg of Earth Systems

ClientsSensor & Historical

Data

See Bloomberg: http://www.bloomberg.com/index.html?Intro=intro3

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Process Innovation…

New Insight enabling…

New Data drives…





















… within a “backplane” of Scalability, Security, Privacy & Standards

New Data, New Insight, New Processes

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What (business) processes would derive value from real-time, real-world insights or predictions?

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What (business) processes would derive value from real-time, real-world insights or predictions?

• Commodity trading – Partially covered by FSS Information Utilities

• City/Regional Management– Traffic/congestion, water, power, epidemiology– Major weather events

• Transportation– Real-time logistics management, “on demand public

transportation”, dynamic route management for public, fuel/fleet management

• Manufacturing– Supply Chain Management, materials/process optimization

• Retail– Weather-related sales, transportation-related sales

(Hyperlocality)• Consumers

– Personal optimizers for time, energy, and other preferences

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Type of Output Example of Output Example Usage

Est. Value of Output ($)

Secondary results from SCM combined with weather forecast

Change production plan model mix

Manufacturing co. 100ks

Primary results from SCM analysis

Re-schedule shipment of goods from DC x to DC y

Transportation co.

Manufacturing co.

100k

Tertiary results from domain analysis

Congestion prediction by region for next 2 hours

Alert to urban traffic managers & traffic svcs

100

Tertiary results from domain analysis

Recommend re-timing traffic signal patter P to avoid gridlock formation

Alert to urban traffic managers

?

Secondary results from domain analysis

Risk of gridlock is High in region R

Alert to urban transit managers

?

Primary results from domain analysis

2500 vehicles / hour passing sensor J

?

Structured data stream Car reg. N passed sensor J at time T

Drive a road pricing transaction

0.50

ITS Hierarchy of Output Value

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Agenda


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What can Information Technologies do to address the challenges of climate change?

• Find ways to drive efficiency in the use of energy and other resources

• Find ways to extract new sources of energy and other resources

• Find ways to recycle the waste products of consuming energy and other resources

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Making a Difference

• It’s about behavioural change– Changing the light bulbs will not be enough– Need to produce significant changes in behaviour

(democratically) to reduce CO2e– As quickly as possible

• This is not necessarily a worsening of our lifestyle– Many negative aspects to current lifestyle– Major shifts in lifestyle have occurred multiple times

since late 18C– Late 21C will probably pity us for our addiction to

fossil fuels

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A challenge to you, the real-time demographers and sociologists of the early 21C

• How do we induce the needed behavioural changes?

• What incentives work?• What role can access to information play in

inducing such changes?• How do we provide a “user interface” to a low-

carbon lifestyle that is easily understood and adopted?

• We need more than “greenwashing” and shallow motivation

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Agenda


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Summary

• The 21C faces severe global challenges• We can improve our understanding of the planet

by instrumenting the environment• We have instrumented our own behaviours to a

high degree• We can apply intelligence (ICT) to addressing

the challenges we face by employing the new data sources of the Instrumented Planet

• How much of a difference can this make?• The 21C will be different, but not necessarily

worse than the 20C

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Documents

1. 2 3Copyright IBM 2007 Life on an Instrumented Planet Colin Harrison IBM Corporate Strategy Member, IBM Academy of Technology Copyright IBM 2008