MCNC starts grid rollout:

RESEARCH TRIANGLE PARK — Grid computing coupled with the increased adoption of web services and more pervasive access to broadband networks could give North Carolina’s economy a substantial boost by 2010.

The technology also offers a glimmer of hope for two of the state’s traditional industry leaders — textiles and furniture, which have been hammered in recent years by overseas competition.

For example, adoption of electronic transactions in textiles “alone would account for increase in output of $3 billion.” Furniture ($630 million) and apparel ($320 million) also would increase. “The importance of this industry to North Carolina’s economy and the fact that a rather small incremental investment in communications infrastructure and software would account for such a change is striking,”

Those are among the conclusions of a new study into the potential of grid computing released today by the Rural Internet Access Authority.

“Several key structural changes in North Carolina’s economy can be expected as a result of the adoption of cluster and grid computing and web services technologies,” the report says. It concludes that “the impact of the adoption of cluster and grid computing and web services will ripple through multiple sectors, contributing to shifts in the state’s industry mix.”

The state can expect to add more than 24,000 jobs and $10.1 billion in economic output above and beyond already predicted growth by 2010, the report adds.

But it includes two key caveats, which was italicized for emphasis: “– given adequate access to broadband infrastructure and sufficient IT workforce.”

The five key forecasts are:

  • Additional $10.1 billion in output
  • Additional 1.5 percent in aggregate labor productivity
  • Additional $7.2 billion in personal income
  • Additional 24,000 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
  • 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
  • New infrastructure is ‘crucial’

    Dr. Robert Cohen, a consultant and economist with an extensive background in the high tech sector, prepared the study for the RIAA, which also is known as e-NC. The findings of Cohen’s study are to be discussed at a grid computing conference today in RTP. The two-day event, hosted by MCNC, concludes with a discussion of Cohen’s 98-page report by a number of state and industry officials.

    “The availability of new infrastructure is crucial to the adoption of these new technologies because, while firms can deploy grid computing and web services to improve productivity and obtain significant cost savings, they must have broadband connectivity between their own facilities and with those of their suppliers and partners for the benefits to be realized,” Cohen writes. “Any forecasts of the technologies’ impacts must assume that investment in the new technologies will result in a substantial increase in spending on high-speed communications infrastructure, mostly for broadband connections, and that the infrastructure and workforce needed to support that increased demand is available.”

    Grid computing refers to computers linked by software regardless of geography that enables high-performance operations similar to a supercomputer. Clusters of computers already are becoming popular, the study notes. Sphinx Laboratories, a subsidiary of Eli Lilly, already is using a grid for research purposes, Cohen says.

    Web services are middleware applications that enable collaboration over networks regardless of proprietary programs and platforms.

    The entire document will be published online by the RIAA at its web site ( ) on Thursday.

    MCNC is working with various agencies and organizations to build the NC Biogrid as well as a grid linking the University of North Carolina system. MCNC operates the North Carolina Research and Education Network (NCREN), which already services the universities. MCNC recently made the decision to move to computer clusters and grids instead of supercomputing, citing similar performance and reduced costs.

    The RIAA has for the past three years aggressively pursued and implemented plans to spread broadband access throughout the state.

    The ‘ripple’ effect

    The “ripple” effect includes $1.13 billion more spent on software, another $681 million for computers, an additional $575 million spent on professional services, and $432 million more in communications spending. Cohen says these figures are above and beyond forecast growth for 2010.

    Cohen also sees the adoption of grids and web services as “a catalyst for innovation among telecommunications service providers.” They will be pressured “to develop new services and capabilities, including higher levels of performance and security and possible advanced services for customer billing and electronic commerce support.”

    The study puts major emphasis on competitiveness and increases of worker productivity. Cohen says the services will give “firms and the state as a whole a competitive advantage in gaining new businesses and in attracting the sorts of firms that require those new services and capabilities.” More productivity will cut costs, free more money for capital spending and could ignite “a dynamic wave of expansion and business growth.”

    According to Cohen, productivity increases will be substantial at companies that implement cluster grids and enterprise grids. Cluster grids will deliver a 15 percent increase in efficiency by 2005 and nearly 30 percent by 2010. Enterprise grids, which are being adopted at a slower pace than smaller-scale cluster grids, will deliver similar increases in efficiency between 2007 and 2010.

    Cohen also believes a sea change will take place in business practices at firms that embrace grid and web service technology. These offer the opportunity of “sparking qualitative changes in the way the firms run their businesses.”

    A state strategy, he adds, has the potential to enable “its companies to be on the cutting edge.”

    But Cohen stresses more than once that North Carolina’s efforts to spread broadband access across all areas of the state most continue. He also said “greater pressure” will be created by the new technology to create more trained IT workers.

    Other applications

    While grid technology already is being used for research and design purposes and drug screening, Cohen predicts that it will soon embrace several other areas:

  • Managing business operations, such as production lines
  • Game playing and entertainment “because of the ability to share and to scale”
  • Control travel, schedule heating and energy use
  • Enhance homeland security through the “ability to screen pictures, fingerprints, voice prints, reports from a wide range of sources”
  • A driver for grid structure is web services, and Cohen notes that Charlotte-based Bank of America already is “starting a national effort to deploy web services. It believes that using web services to establish free checking on the Internet, based on secure web portals that can be accessed by many customers, saves considerable costs.”

    Cohen identifies five industries as early adopters of grid and web services:

  • Pharmaceuticals
  • Autos
  • Aerospace
  • Financial services
  • Hospitals

    None of the five will show less than 11 percent increases in worker productivity, one result being at least a 4 percent decline in prices.

    However, Cohen’s findings also indicate that those sectors will reduce employment by a combined 25,516.

    Additional spending and demand for services to drive the new tech offerings will produce more jobs in communications services, professional services, computers, communications equipment and software.