Oil and Gas: Into the Cloud?

Abstract

Management Anyone who has watched television lately has seen commercials about amazing things being accomplished in the “cloud.” Advertisements are focused on what the typical consumer can do, such as sharing and editing photos, but benefits of the cloud—lower information technology (IT) costs, less complexity, and speed to launch—have been touted for business as well. The oil and gas industry has been on the forefront of adopting emerging technologies such as high-performance computing. The industry is knowledge intensive and is even experimenting with social networking. The question is whether the industry, given its global nature, need for security, and existing legacy infrastructure, will take to the cloud. IDC Energy Insights defines cloud services as business and consumer products, services, and solutions delivered and consumed in real time over the Internet. The public cloud is a deployment model where the cloud is open to a largely unrestricted universe of potential users. In fact, the public cloud has been a part of the IT landscape for several years, mainly in the form of software as a service. A good example is salesforce. com, which is designed for specific purposes, but not for a single enterprise. Public cloud includes but goes beyond software as a service to IT infrastructure or platform as a service. The private cloud is designed for restricted access to a single enterprise (or extended enterprise). A hybrid cloud combines a private cloud with the use of public cloud, especially when internal private cloud resources are strained. Fig. 1 displays the key attributes of the cloud. The cloud services model, by leveraging all eight of these attributes together, makes business and consumer cloud services easier and cheaper—and often better—to consume than through traditional delivery modes. These attributes are lower costs (for customers and suppliers), speed and simplification of access, speed and fine-tuning provisioning (in line with true demand/usage), greatly increasing the number and variety of available services (thanks to lower development and deployment costs and standards), and improving the potential to integrate. Despite the popularity of the cloud in some applications, cloud computing has still not aggressively penetrated the oil and gas industry relative to the pace of adoption in other industries. According to IDC’s 2010 Vertical Group Survey, 10.3% of oil and gas companies are currently using or implementing cloud computing and 7% have cloud computing on their technology road map (Fig. 2). Forty-two percent of the companies that said they would use the cloud in 2010 were spending less than 5% of their IT budget on cloud.