In this Q&A, Robert Cohen -- economist, Economic Strategy Institute fellow and Cohen Communications Group president -- discusses some of his studies looking at how Grid computing, SOA and Web services have transformed the industrial landscape. In particular, Cohen discusses how grids have affected the automotive sector -- a topic on which he presented at EGEE'06. 

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GRIDtoday: Could you explain to our readers your background as an economist and president of Cohen Communications Group?

ROBERT COHEN: As an economist, I am primarily interested in the how Grid computing is changing business behavior. I try to quantify the benefits of grids, as well as SOAs and Web services. I also examine the way individual industries are adopting grids and SOAs.


Gt: As area director for Industry Applications for the Open Grid Forum, how important is it to bring experts and business leaders into play and "spread the word" on Grid computing?

COHEN: I think it is extraordinarily important. We just had two workshops at the Open Grid Forum meeting in Washington, and I think having users talk to standards developers and vendors is the best way to create bridges between these groups and to address issues that could speed adoption when they are resolved.


Gt: Based on your studies, what has been the most significant impact of grids on firms operating in the United States?

COHEN: Very significant changes in the time to bring products to market, thus having a significant impact on costs, as well as productivity. Nobel Prize winner Wassily Leontief demonstrated that during the mid 1980s, gains in productivity in semiconductors contributed nearly half of productivity gains in the economy. I think grids, SOAs and Web services, when they result in virtualized products, have the ability to mirror such tremendous gains in productivity.


Gt: Have you noted any important similarities and differences between the adoption of Grid computing in the United States, Europe and Japan, or in other sectors you have analyzed?

COHEN: Yes, when industries compete in global markets, the pattern of their adoption of grids in the United States, Europe and Japan is very similar, and forecasts for future growth of enterprise grids and partner grids are almost the same. What this shows is that grids are a competitive weapon. If you don't use grids, SOAs and Web services to maintain and establish a position as a global competitor, you are toast or will be soon.


Gt: Your studies have been among the first to examine the impact of Grid computing and Web services on corporate costs and productivity. What are the main benefits for business?

COHEN: Businesses can speed products to market by shortening the development cycle. As a new study of European adoption shows, grids and SOAs have let European automakers cut the time to develop new products, let them develop many more different products than they used to, and do so at lower cost. Auto firms have developed "virtual products." They can model down to the level of welds and bolts. They can literally see every detail in the making of the car and simulate all types of analyses on their grids. This means they can also design the tools to produce the car and model the parts of the car that will provide the greatest challenge for maintenance once the cars are in use. This a complete change in the way firms make cars and it is pushing auto firms to connect their design and simulation groups in "collaborative environments" to get even greater benefits from "virtual products."


Gt: Over the next year, you plan to make additional studies of Grid adoption in Europe and China. What particular sectors and aspects will you be investigating and analyzing?

COHEN: I plan to interview firms in more European industries and to look at how grids will impact the future growth of infrastructure. I plan to do a study of China and its early adopter industries in the future.


Gt: At the EGEE’06 conference you spoke about Grid in the automotive sector. What are the main conclusions of your presentation?

COHEN: Virtualized products are revolutionizing the way auto firms build cars. In some cases, auto firms are expecting to save nearly 50 percent of design and development costs over the 2005-2008 time period due to the use of virtualized products that are made possible by using grids and SOAs. This is revolutionizing the auto industry almost more than the introduction of production lines.


Gt: How would you explain these similarities and differences?

COHEN: I think auto firms have been using grids for eight to 10 years and they have really figured out how they can exploit their economic benefits, when linked to SOAs and Web services. This will result in a significant expansion in the use of grids over the next few years. Economic change is rife in the auto industry, as the troubles at GM and Ford show, but the more technologically sophisticated firms are the ones that are prospering.


Gt: In your opinion, what will be main trends for the deployment of Grid in industry over the next few years and what will be the most significant impact?

COHEN: I think many industries are beginning to use grids and SOAs to generate their core profits. As this becomes more evident, business processes could change in a wider range of industries beyond autos, aerospace, semiconductors and finance where they have been most noticeable. This could result in dramatic improvements in productivity as well as firms using the global economy as their base for design and product development.

About Robert Cohen

Dr. Robert Cohen is an economist and fellow at the Economic Strategy Institute (ESI) and the president of Cohen Communications Group. He has specialized in analysing the economic impacts of new telecom and computing technologies. His recent work has focused on the impact of Grid computing on industries in North Carolina, the United States, Japan and Europe. Cohen also is the area director of Industry Applications for the Open Grid Forum (OGF). He has been an active participant in the OGF’s Program Committee for Enterprise Grid conferences and organized the first focus sessions on Grids and telecommunications. Cohen’s studies of the impact of Grid computing and Web services have been among the first to examine the impact of these technologies on corporate costs and productivity. He was economic adviser to the President's National Advisory Commission on Semiconductors under the first President Bush.