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Energy industry: Who will win in the cloud?

Energy companies are looking to cloud computing. The question is which will be leaders and which will play catch-up.

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Most oil and gas companies are already evaluating the risks and benefits of the cloud, and some have taken major steps towards virtualising their internal infrastructures. But the majority have yet to implement the full-scale automation or self-service provisioning that can help to harness the full benefits of the cloud.

As this trend gains momentum and scale, Accenture believes that cloud computing will combine with mobile technology and powerful analytics to change the game in the energy industry across five key dimensions.

Cloud and Data
Today, energy companies have to manage and make sense of an unprecedented and ever-expanding mass of ‘big data’. Cloud computing provides companies with access to transformational, new real-time data and analytical capabilities, underpinned by supercomputing power and massive storage capacity. This enables them to unleash the value locked up in financial and operations data across their organisations and allows them to undertake specific data-heavy activities, such as detailed analysis of seismic information
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For example, Shell Oil is using cloud services to manage and analyse the massive amounts of geological data produced by the super-sensitive seismic sensors that it installed recently under a collaborative agreement with Hewlett-Packard. The sensors enable the company to detect and extract oil from wells that were formerly believed to have run dry, or in locations where previous investigations suggested that no oil was present.

Cloud and Collaboration
In major capital projects, energy companies need to manage ever-larger, more complex and more geographically diverse ecosystems of partners, suppliers, subcontractors and employees.

With cloud computing, companies gain integrated global access to information - anytime, anywhere - bringing them the ability to share data and collaborate more effectively in real time.

For example, Tullow Oil, has deployed the cloud computing-based YouSendIt Corporate Suite across its business, which enables employees to securely exchange very large files containing maps, oil-well data, CAD drawings, images, graphics and other crucial information without overloading the email system.

Cloud and Production Operations
Intensifying global competition combined with volatile and uncertain economic, regulatory and market conditions, means that energy companies have to generate higher performance and greater operational agility at lower cost.

Cloud-based, as-a-service infrastructure, applications, platforms and business processes enable companies to control costs more flexibly and transparently, while also proving greater scalability and agility via pay-per-use access to an emerging generation of market-leading capabilities.

Over-time, as an expanding array of specialised industry services, like 4D modelling, migrate into the cloud, cloud orchestrators will aggregate bundles of cloud services for energy companies on a managed service basis to create an industry-tailored cloud environment.

Accenture is currently working with a global energy firm based in Europe to virtualise its infrastructure using a private cloud. This firm has a particular interest in using cloud for testing and development environments, having found that it allows it to shave the time taken to create an environment from one month, to four hours. The virtual environment also is one-fifth of the cost.

Cloud and Customer Engagement
As competition for retail and business customers intensifies, energy companies are striving to build deeper customer relationships and brand value.
Energy companies will make growing use of cloud-based customer relationship management and social media, including building ‘green’ branding and becoming more actively involved in the blogosphere, to engage with activists.

As an example, Accenture used cloud computing to create a social media platform for the Green Guardians team in the Shell Eco-marathon Challenge, which involved students from around the world designing, building and testing vehicles that travel farther using less energy. The cloud contributed to reduced costs and enhanced functionality of the platform, enabling it to handle peak traffic over the three days of the race.

Cloud and Next-Generation Energy, Environment and Health
Energy companies are navigating their transition to the next-generation energy mix, which will include lower-carbon alternatives and renewables, and will be accompanied by a greater focus on protecting the environment.

Cloud computing can help navigate this journey by allowing companies to track and manage their environmental impact, and monitor ever-more complex equipment remotely in real time.

For example, cloud-based data-management can completely replace existing stand-alone data systems and reporting tools to provide a comprehensive integrated solution to one of the hydrofracking industry’s most vexing problems - the centralisation and management of complex data pertaining to contaminated water, groundwater, soil and air.

As energy companies start to move more activities into the cloud, Accenture’s experience shows that there are three steps that business and IT leaders should be taking now to start getting value from cloud today and prepare for major advances in capabilities tomorrow.

Firstly, asses the company’s cloud readiness and define the strategy. Secondly, launch targeted pilots to prove the benefits of cloud. And finally, put key building blocks in place to support future progress, such as upgrading security models to reflect the new IT environment, start moving infrastructure to the cloud and consider the new IT skills that will be required.

Cloud computing presents major opportunities for energy companies. When combined with mobile technology and analytics, it stands to change the game in the industry. However, to succeed in this technology-driven game, energy companies need to commit to an on-going journey to cloud enablement. They should start that journey today, or they will find themselves struggling to compete with cloud-powered competitors.

Posted by Richard Holsman, managing director for Accenture’s energy technology business

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