Big shake out at Petrotechnical Open Software Corp. (February 1998)

POSC is losing its initial sponsor fundingwhich will be phased out and replaced by a new fee structure. Project selection andfinancing is also revised in a three tier structure of maintenance, joint industryprojects and private 'Joint Industry' projects which may not enter the public domain.

A new business plan and radical changes in fee structure were announced at the Petrotechnical Open Software Corporation (POSC) Member Meeting held in London this month. POSC's initial oil company sponsors were paying $500,000 US to support POSC. This is to be scaled down significantly over the next two years. In 1998, a year of transition, sponsors and the top membership category will be required to pay a total of $300,000 each. In the following year, the top rate for POSC membership will fall to $125,000 and the sponsor category will be eliminated. From then on all members of POSC will have the same rights and pay membership fees on the same sliding scale. At the other end of this scale, the $1,000 per annum fee charged to companies and consultants with revenues less than $1,000,000 per annum is eliminated. From now on, consultants will be required to pay a $5,000 annual fee. The counterpart of the new funding scheme is to be increased democracy in the running of POSC, with all board members voted by all the membership.

Bertrand du Castel (Schlumberger) one of POSC's directors at large described the initiative as an attempt to "align commercial aims with funding model". Du Castel further described the need to "keep to the original ideal of POSC but with a perpetual sustainable membership based on a funding model corresponding to value received". Concomitant with the new funding, there are significant changes in the way projects are selected and financed. POSC's $5 million annual budget is now divided into three tiers :

The first involves the maintenance of existing standards such as Epicentre. POSC's copious information program and meetings will also be funded from this category whose growth is to be controlled by POSC management.

The second tier - new common projects - involves research projects whose results are open to all members. POSC membership will define projects of common interest and set mid to long-term objectives. These projects will be funded by interested members and the results may migrate to tier 1 after approval by POSC membership.

Tier three covers projects that benefit from direct funding from groups of members, and whose results will not necessarily be put into the public domain. These Joint Industry Projects (JIP) may even be revenue generating and will not necessarily migrate to other POSC tiers.

Another facet of the new business plan is that POSC will increasingly have to look for its own projects, acting as a consultant for its members - or possibly third parties. This may lead to some complex situations where POSC is actually competing against its own membership. Some see the elimination of the lowest category membership fee as part and parcel of these changes. The demography of POSC has changed a lot over the years and it is now dominated numerically by software companies (none of the initial sponsors were vendors). If some of the smaller outfits find it hard to come up with the extra $4,000 - or even harder to finance the special projects that might be of interest to them, then there probably would be few tears shed by their larger brethren.