Grid Computing and Utility Computing – Are They the

Future?

Dr. Robert B. CohenPresident, Cohen Communications Group, New York

City and Fellow, Economic Strategy Institute, Washington, D.C.

North Carolina Digital Government Summit, September 13, 2004Hilton North Raleigh,

Raleigh, NC 27609

The full report discussed, “Grid Computing: Projected Impact on North Carolina’s Economy & Broadband Use through 2010,” is at http://www.e-nc.org

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Why Should States be Interested in Grid computing?

State economic development will be impacted by firms and universities using grids. These impacts are not being integrated into state economic strategies and policies.

States need to improve their own use of IT resources and the cost of providing services States face a range of IT efficiency issues including the use of

multiple computer networks for different agencies and multiple CIOs to manage different compute and data resources

This morass of computing and networking needs to be managed more efficiently and at lower cost

More services should be provided to people online and more sophisticated analysis of state issues is needed

Grid computing can address all of these issues If states could gain the same efficiencies as firms, they could save

roughly 10%-15% of operating costs by 2010!

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Agenda1. Summary of economic gains and benefits

of grids from North Carolina study.2. Industries using grids and the importance

of early adoption.3. Issues to consider, including stovepipe

structures for data storage and cultural attitudes that need to be addressed.

4. State experiences with grids-How states can use grids

5. Recommendations/Steps for policymakers to consider.

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Main Finding of North Carolina Study Given: 1) adequate access to broadband infrastructure

and 2) a sufficient IT workforce, The deployment of high performance grid computing and Web

services applications would contribute significant gains to North Carolina’s economy over 2010 baseline growth forecasts

Therefore, State economic policy makers will need to prepare to meet these needs or they may stifle the adoption of grids.

States that understand the opportunity could gain more benefits than other states - They can use clusters of skills to attract new industries, they can

train workers for the new opportunities and they can get ahead of the transformation of their economy!

Some states, like North Carolina are already trying to do this.

States can also use grids for state computer and data networking and achieve substantial economies.

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The Significant Gains to North Carolina’s Economy by 2010

An additional $10.1 billion in output - 2% over forecast An additional 1.5 percent in aggregate labor productivity -

1.5% over forecast An additional $7.2 billion in personal income - 3% over

forecast An additional 24,000 new jobs, the net result of 55,700

new jobs created from increased industrial growth and 31,700 jobs lost due to the adoption of new grid and Web services technologies and downsizing

An additional $1.2 billion in expenditures for communications services, with 80 to 90 percent of the new spending devoted to the purchase of broadband access

These gains will have a major impact on the state economy!

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Why Clusters and Grids Are Important

Cluster computing and grids change the economics of doing complex computations since they lower costs so dramatically. Cluster software lets firms use interconnected small computers to do

work that previously required a large supercomputer. Grids connect different clusters across a corporate firewall. Web services are software that supports sharing of incompatible data.

When firms use clusters or grids, they can complete compute-intensive tasks in hours that previously required days. This helps firms save costs -- less compute time is needed, as well as

less time from programmers and software developers. They also benefit from getting results faster, so that products can get to

market sooner. These cluster/grid users become more productive “growth centers”

because they are more efficient and more competitive. These firms are more dynamic. They spark growth in the state!

State governments can achieve many similar gains if they use grids.

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Early Grid Adopters Drive Growth

A few industries drive adoption of clusters and grids: autos, drugs, financial services, aerospace and health care. These industries are already using clusters and web services (see

the auto industry that follows) to improve their ability to do research and develop products.

They plan to increase their use of clusters even more in the coming years.

They will begin to use grids in the 2004-2006 time frame, linking compute activities in different locations.

This ramp-up of grid use will have a dramatic impact on broadband demand; some firms expect broadband use will grow 25-30%/yr!

Firms in these industries will also press their suppliers to become “networked” and to do much of their business on the Internet.

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Definitions of Clusters and Grids

Clusters connect many computers and allow computations to run in parallel.

Data grids connect storage centers using communications links.

Enterprise grids connect clusters in a number of centers in the firm and permit decentralized control of the grid.

Partner grids let suppliers or collaborators connect to an enterprise grid.

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Broadband and the Growth of Clusters and Grids

Initially, firms deploy clusters in a specific business area, such as drug discovery. They then begin to expand the use of clusters in different departments.

Later, firms want to link centers where complex computing takes place to tap into the compute power of the entire firm -- an enterprise grid -- or to link data centers -- a data grid.

This requires linking offices using broadband connections Auto, drug and health service firms are already setting up

grids to support complex computing operations. These broadband links will grow as firms send more data over

the Internet.

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Broadband Demand: The Main Drivers are Early Grid Adopters

Impact of Grid Computing and Web Services on Purchases of Communications Services by US Auto

and Pharma Industry

0.0

500.0

1000.0

1500.0

2000.0

2002 2005 2008 2010

Mill

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Pharmaceutical IndPurchases ofCommunicationsServices - BaselineCohen Forecast ofPharma Ind Purchasesof CommunicationsServices

Auto Industry Purchasesof CommunicationsServices - BaselineForecastCohen Forecast of AutoInd Purchases ofCommunicationsServices

Source:unpublished data from Robert Cohen, “Grid Computing: Projected Impact on North Carolina’s Economy and Broadband Use through 2010,” Rural Internet Access Authority, September 2003. Report is available at http://www.e-nc.org.

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Which Industries Gain Jobs?

Industry Rank

Percentage Change in

Employment

Total Gain in Employment in Thousands of

Jobs

41 Office equipment 1 15.7% 0.340 Computers 2 9.3% 0.747 Communication equipment 3 8.1% 0.565 Communications services 4 7.6% 2.778 Computer & data processing 5 7.3% 4.337 Metalworking machinery 6 6.6% 0.830 Furniture 7 5.9% 5.277 Professional services 8 4.7% 6.4

Investments to deploy clusters and grids that North Carolina’s firms use will result in new job growth in the industries that receive this new spending. Higher disposable incomes spark additional consumer spending, so the furniture industry gains. Industries that deploy clusters, grids and Web services achieve considerable efficiencies. In part, this is because these technologies make workers more productive -- they produce more than they did without the new technologies.

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North Carolina’s Grid Efforts

Prior to 03: NC Research and Education Network (90s) and NC BioGrid Testbed (2002)

03/04: Creating MCNC Enterprise Grid - with clusters, core components for NC Grid

04/05: NC Grid a statewide partnership for grid education, enabling 1St mover applications

06: Creating “Grid Service Provider” w/co-location services

Using Advanced Technology Group to investigate & drive integration of new & emerging tech into MCNC infrastructure

Grid Tech Evaluation Ctr - takes grid to implementation, production and deployment

Source: Wolfgang Gentzsch, Managing Director, Grid Computing and Networking Services, MCNC, “MCNC-GCNS The North Carolina Partner for Grid Infrastructure Services for Education, Research, Government, and Industry,” August 2004

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The NC State-Wide Grid Roadmap

6/04: “Do-Grid-Yourself” Workshop 7/04: Phase 1, Awareness

Creation 7/04 – 12/04: Deliver/ Connect

Grid Appliance Clusters to University Partners

8/04: Develop “Do-Grid-Yourself” Training Course

9/04: Start Quad A Project 10/04: Start Deliver Grid Training

to Partner Unisvs 12/04 – 06/05: Work with Grid

User to Port Applications 03/05: Build Access Grid Node 06/05: 1st NC Statewide Grid

WorkshopSource: Wolfgang Gentzsch, Managing Director, Grid Computing and Networking Services, MCNC, “MCNC-GCNS The North Carolina Partner for Grid Infrastructure Services for Education, Research, Government, and Industry,” August 2004

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Colorado’s Effort in Grids: CoGrid

Major focus on state government, university and business users: 20% of CoGrid capacity reserved for businesses

Provide scientists, students with grid access State Government:

1. Real-time simulation of wildfire propagation to assist firefighters

2. Statewide hydrology models for improved water management

3. Wildlife population and disease propagation modeling

4. Advanced urban transportation modeling. Local Government: model the transportation impact of a

proposed new development.

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Ohio and Grids: Cluster Ohio

State funding for clusters at large universities and for researchers to create clusters with older machines

Build robust fiber network with wavelength speed for grid computing

Seeking funding for state DataGrid to distribute datasets around state, support disaster recovery at major universities

Private corporations can use excess compute capacity as a utility grid

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Grids will Change How State Economies Grow

Firms using clusters and grids will begin to use them to change their business processes -- the way they organize and run their businesses. This should bring about a dramatic change in the way we

now see business done. Different skills will rise to the fore. Computer literate

work forces that can easily use Internet applications will benefit the most from the new era of “connected” business. Firms without such skills will have a difficult time.

States with clusters of these new skills will do well and be better able to compete in the global economy.

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Ways that States and Cities can Use Grids to Cut Costs, Improve Services

To share resources within a state or region, so that agencies around a state could use the compute and data storage resources the state already has or accounting systems that the state has used This could create multi-county or multi-city groups to deal with

accounting or government resource management issues

To let water authorities share remote monitoring and management across a region

To model floods and their impact on specific elevations To identify where unforeseen flooding may occur after a hurricane

To share Emergency Room skills and supplement information available on a patient in an emergency situation. I want to thank Jane Patterson of the North Carolina Rural Center for suggesting many of these ideas.

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Future Growth is Tied to Grids and Broadband Use

The NC study finds that if a state wants to compete in the economy of the future, it will need to: 1. Develop new computer and Internet skills in its workforce and

the ability to work with broadband applications. Develop institutions that build these new skills in the workforce.

2. Help firms that are grid users to maximize their contribution to the state and local economy. Identify supplier firms to these industries that can also capture many benefits.

3. Insure that the state has a well-deployed broadband infrastructure so firms can interconnect to their branches, partners or subcontractors without difficulty. Create institutions to promote upgrading the state’s communications infrastructure.

4. Pay special attention to traditional industries that are part of supply chains for Wal-Mart and Gap, but may be limited by Internet skills and slow connections to the Internet.

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Steps Policymakers Should Take to Promote Grids

Focus efforts on collaboration, the use of excess compute capacity, that don’t require additional spending on infrastructure. Support innovative strategies for collaboration, for innovations --

make tax payments, drivers’ licenses, government service information interactive using portals

Develop roadmaps for implementing these innovations Create operational efficiencies, where fiscal savings can

be created in state and local governments - coordination of resource use, etc.

Develop coalitions of business owners and state CIOs to address how to leverage the benefits of grids.