American Oil and Gas Reporter - January 2012 - 120

Tech Trends 2012
Horizontal drilling technology and 3D seismic analysis have opened doors to
new possibilities in the oil and gas industry
and altered the country's energy landscape.
The cloud will, in turn, increase the efficiency of energy companies by lessening
the burden of technology, and allowing
the industry to focus on finding and producing oil and gas reserves. It will level
the playing field by making information
and processes available to small independent producers as technology is offered
on a pay-for-usage basis.
Whether a business is upstream or
downstream in the process of bringing
oil and gas to market, from exploration,
drilling and production to field services,
cloud-based computing will change the
way the business operates. The cloud is
not simply adding new features to cell
phones and storing data somewhere "out
there." It is the standardization of where
data are stored, how they are accessed,
and how companies interact.
Speaking at the Microsoft Global Energy Forum in Houston last year, Steve
Ballmer, Microsoft's chief executive officer, said, "It is the new architecture for
how software gets built, and it is the
notion of pushing it into the Internet in a
way that is accessible across company
boundaries, out to individuals."
The primary players who provide the

platform on which cloud services are
built are among the biggest names in
technology because they have the enormous resources required to compete on a
global scale. These include Microsoft's
Windows Azure™, Amazon's EC2™,
and Google's App Engine™. When it
comes to cloud platforms, economies of
scale rule as these companies apply their
highly skilled and vast resources to operate
the largest data centers in the world.
Infrastructure Benefits
There are many enterprise applications
on the market today that are only accessible
to larger companies because of the substantial infrastructure required to license
and maintain the software and operate
them. With cloud-based technology services,
these enterprise applications can be replaced
by Web-based systems at a fraction of the
cost, much less capital investment, and a
significantly reduced footprint in system
administrative personnel. These services
also facilitate wider availability to users,
and from a technological standpoint, make
it less costly to integrate information from
one corporate entity with another.
The cloud's impact on a company's
bottom line and technology infrastructure
is immediate. An exploration, drilling
and production company no longer needs
capital investment for server infrastructure,

Cloud computing increases corporate efficiencies by lessening the burden of technology,
allowing oil and gas companies to focus on finding and producing reserves. It levels the
playing field by making information and processes available to smaller independent producers since technology is offered on a pay-for-usage basis.

120 THE AMERICAN OIL & GAS REPORTER

disaster recovery and collaboration software. It now can utilize readily available
cloud services and only pay per user
rather than shelling out large server license
and support fees upfront. Many of the
services on the market provide more capability and access than what companies
can run in house. Unlike other cost-saving
measures in the information technology
industry that have resulted in U.S. jobs
being shipped overseas, the cloud simply
means that current roles in IT will be redefined.
Large companies that already have invested heavily in enterprise software will
continue using those services, but they
will be forced soon to advance to the
latest technology or risk losing their place
in the market they helped to create. Those
entities likely will proceed with a gradual
transition to cloud services, ending with
a combination of public and private cloud
environments. Most services today are
found in the public realm, but private
clouds are making their way into larger
organizations that seek the benefits of
cloud technology with the control and
security of keeping everything in house.
In 10 years, legacy enterprise applications
will prove to be as expensive and cumbersome to manage as mainframe applications are today.
Imagine that an IT developer has an
idea for a new technology for drillers, so
he starts his own company and has to decide whether the platform should be built
on the cloud. A year ago, he would have
had no choice but to spend significant
time and money to obtain server licenses
and server equipment, rent a secure data
center to store the servers, set up network
connections to those servers, pay for Web
hosting, and so on. By operating on the
cloud, this developer will find that his
time to market is faster since he does not
need to scale up testing analysis environments that involve complex data sets and
data models composed of reservoir and
seismic data. The data and computing
power are essentially queued up any time
customers require them and are only a
few mouse clicks away.
Seamless Integration
The leading companies in the industry
are those that see how new information
can be created by combining services.
Cloud service providers are only beginning
to find ways to share information and add

American Oil and Gas Reporter - January 2012

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