The oil and gas industry has been enduring an extended period of low prices and the outlook for 2016 doesn’t look very promising as a return to $100 per barrel oil prices seems nowhere on the horizon. While traditionally, market slowdown is accompanied by talk of downsizing and other cost-cutting measures, strategic investments that drive productivity and efficiency could be an effective alternative that controls operational costs by optimising existing resources.
It is against this backdrop that the role of IT has become increasingly prominent. Market research, conducted by reputed firm Booz Allen Hamilton in collaboration with IDC, identified five key technology trends in 2016 that will drive innovation in the oil and gas industry. They range from increasing security postures to conducting advanced analytics of Big Data in order to identify opportunities to drive down overhead costs. However, before companies can leverage these trends, they must first invest in creating or enhancing the fundamental platform upon which such technologies are deployed and managed.
The shortcomings of the distributed IT approach
One of the defining characteristics of oil and gas organisations is the distributed nature of their operations, which in most cases includes offshore rigs and geographically remote locations. Traditionally, the mission-critical IT applications, such as ERP systems and collaboration tools, needed by workers at these remote locations to carry out their day-to-day functions, have been made available by deploying IT technologies such as servers, storage, and security devices at the locations themselves.
Since the majority of the IT-skilled workers are based in headquarters, these remote infrastructures are often a challenge to manage. Providing support for routine server maintenance, data backups, and storage allocation can get unwieldy for the novice – and the fact that these sites are directly contributing to generating revenue makes them critical to the business. It is not uncommon for oil and gas companies to have to deal with backup windows that exceed 24 hours, a duration which is often further extended when the process must be paused to free-up bandwidth for daily operations. As illustrated in the research cited previously, CIOs in the energy industry realise that without consistent infrastructure and operational procedures for remote IT, business-critical data is certainly at risk due to the nature of the environment, and subject to costly downtime.
Benefits of consolidation and the ‘zero-branch IT’ fix
Driven by providing less infrastructure and reducing IT complexity in the branch and data centre, convergence has been one of the key trends empowering IT over the past five years. Done right, convergence promises less hardware, reduced cost of equipment and power, as well as lower demands on IT staff resources.
For the oil and gas industry in particular, a software-defined edge infrastructure can enable zero IT at remote locations such as oil rigs by virtualising and consolidating 100% of data and servers from these sites into the more secure onshore central data centre, or even the public cloud. The reason this approach is ideal for this particular industry is because addressing any IT issues on a remote drilling rig typically involves flying experts out – an expensive process that can lead to significant delays and downtime. With the zero-branch IT approach, all the remote infrastructure can be replaced by a single appliance, so there is little or no infrastructure at the branch.
In short, with IT consolidation, organisations can benefit from higher reliability, seamless backup, and instantaneous recovery, all at reduced cost, as IT teams no longer need to maintain costly servers and storage at branch locations. For oil and gas companies, this also eliminates the costs associated with having to contract third-party IT support for their remote locations.
Consolidation as a platform for future innovations
According to GE, smart sensors and Big Data analytics could help oil companies extract an additional 80bn barrels of oil around the world in about three years. However, data consolidation is key to a successful Big Data strategy.
In any large enterprise today, we typically see data being generated at a vast number of independent branches. Unless all this is collated at a centralised location, running meaningful analytics will present an uphill challenge.
By consolidating IT back into a central data centre, data storage also becomes centralised. This not only enhances security, but also makes it possible for organisations to have all the information they need at one single location, which is a prerequisite for meaningful Big Data analytics.
IT consolidation considerations
While the case for consolidation seems rather straightforward, it is necessary to bear in mind that consolidation can only be considered successful when applications and data can be accessed at branches and remote locations without any degradation in performance. However, when applications and data are actually hosted in central data centers and made available to the branches, it can lead to slow-running applications, which result in a degraded user experience and decreased productivity.
Unfortunately, because it is characterised by geographically remote sites, the oil and gas sector has been particularly prone to slow applications and data availability issues, which make remote workers less productive.
A comprehensive IT consolidation strategy must, therefore, account for performance challenges. Luckily, leading consolidation solutions today, such as Riverbed’s SteelFusion, include integrated WAN optimisation technologies that enable oil and gas companies to overcome the bandwidth and performance challenges that they typically face at their offshore sites.
WAN optimisation converged with intelligent storage-caching and virtualisation technology make SteelFusion an ideal solution for delivering applications in the most remote locations imaginable. For example, an oil rig at sea may only be reachable by slower and unreliable satellite VSAT (very small apeture terminal) links, so relying solely on the WAN could cause catastrophic business results. Locations such as these can clearly benefit from centralising data for security purposes while simultaneously accessing applications required to get work done on the rig without any performance penalty.
As low oil prices look set to extend well into 2016, industry players must now commit to innovation in order to operate in the most efficient and cost-effective manner possible. IT consolidation and the zero-branch IT approach not only bring about immediate cost reduction benefits, but also provide the platform for future innovation. This ensures that oil and gas companies not only make it through these tough times, but also emerge stronger and more agile.
About the author: Taj Elkhayat is the regional vice president for Middle East and Africa at Riverbed Technology.
