With the shift to and the increasing proliferation of cloud computing, developing a cloud strategy becomes crucial for any organization wishing to leverage the opportunities inherent in digitalization.
For many, cloud computing has been an almost unnoticeable transition from local computing to the delivery of computing services over the Internet. Few trends in the IT world, however, has had a more significant impact than the emergence of cloud computing, and the technology is fundamental to increase the effectiveness and benefits of digital transformation.
Moving businesses to the cloud, however, is not done in a heartbeat. It requires thorough planning and rigorous execution. In this article, we will highlight some critical considerations CIOs of E&P companies should be aware of before planning to move to the cloud.
Cloud Computing: An Introduction for E&P CIOs
Cloud computing refers to the on-demand delivery of IT resources over the Internet. It is a catch-all phrase for everything from data processing and data storage to software on servers made available via the Internet. Instead of acquiring and maintaining physical, on-premise data centers and servers, the cloud enables users to access technology services, such as servers, storage, databases, and computing power, from a cloud provider when they need it.
The cloud promises significant time, cost, and flexibility advantages and represents a major shift in how organizations think about their IT resources – including oil and gas companies. For example, consultancy firm Accenture notes that one global oil and gas company is currently transferring their workloads to a cloud solution, expecting to optimize costs by close to 40 percent. Another European natural gas operator has significantly increased its environment availability – from 54 percent to 90 percent – through cloud computing.
1. Choose the Right Deployment Model
Cloud computing takes on various forms, depending on its architecture and deployment model.
- Public cloud: Public cloud solutions are managed and delivered by a third-party vendor via the Internet. The public cloud is ideal if you require scalability in processing power, storage capacity, and user account settings. This type of cloud solution allows you to scale up and down as needed. Public clouds are becoming increasingly popular with E&P companies. Cegal’s GeoCloud is an example of a public cloud solution.
- Private cloud: Private cloud platforms are built on a dedicated infrastructure managed by your internal IT team or by third-party providers. Private clouds give you control in terms of data management and security, making it a viable solution for businesses with strict data compliance obligations. The downside, however, is that all management, maintenance, and updating of data centers are your responsibility.
- Hybrid cloud: For instance, hybrid clouds allow you to store mission-critical applications and data in the private cloud while running heavy workloads, such as graphics-intensive applications, in the public cloud. Cegal’s AgileCloud is an example of a hybrid cloud.
All deployment options – public, private, and hybrid clouds – all provide cost, time, and flexibility benefits, but your business needs should dictate which deployment method you choose for your organization.
2. Choose the Right Service Model
Not only the architecture but also the service model varies in cloud computing. There are three main types of cloud computing which offer different levels of control, flexibility, and management. Whichever model you choose should reflect the needs of your company.
- Infrastructure-as-a-Service (IaaS): The fundamental category of cloud computing. IaaS allows users to rent IT infrastructure from a cloud vendor, such as servers, virtual machines, storage, and network. IaaS provides a high level of flexibility and management control.
- Platform-as-a-Service (PaaS): PaaS refers to cloud computing services that enable users to develop and deploy applications. The underlying infrastructure, such as hardware and operating systems, is managed by the cloud vendor, removing the need for procurement, maintenance, and patching.
- Software-as-a-Service (SaaS): SaaS provides access to software or applications that are deployed in the cloud. The cloud vendor runs, manages, and maintains the software and all the underlying infrastructure. SaaS allows users to focus on how to use the software or the application and not to worry about maintenance or infrastructure management.
3. Consider Local Data Regulations
Many global oil and gas companies face regulatory scrutiny in certain countries with strict requirements for data localization. Some of these countries can impose a blanket ban on the transfer of all data across borders, whereas others impose specific restrictions on the transfer of data in specific sectors.
The best solution is to choose a service provider that is in proximity to your company and close to your operations. If your provider’s services are unavailable in the countries you operate in, you should consider a hybrid cloud setup. Hybrid clouds can leverage existing infrastructure within the countries you operate in and connect it to your existing infrastructure and systems, often solving compliance challenges with data localization.
4. Make Sure Your Applications Are Cloud Compatible
Software applications must be cloud compatible. Moving applications “as is” to the cloud often limits the potential of cost and efficiency synergies related to cloud computing.
This is where the hard work begins. You need to evaluate your existing applications and identify strategies on how to best modernize them. If you are lucky, your applications will have later, cloud compatible versions that can be downloaded. If not, or if you are using proprietary software, the applications may require reconfiguration. In that case, your service provider will have to rewrite the applications so that it can utilize native cloud features like direct access to offsite storage, centralized databases, and compatibility with other cloud solutions.
Customizing legacy software for the cloud can be expensive but is worth the effort. By customizing your applications to open standards, you ensure that your applications and systems can communicate with each other and can be easily upgraded and expanded. This removes vendor lock-in and enables access to a broader range of open source and proprietary software vendors.
5. Ensure Cost Control in the Cloud
Most cloud computing platforms run on a pay-as-you-go model, a practice similar to that of utility bills, which means that charges are based on usage. This model can make it difficult to manage the general usage and costs, and cloud computing costs can quickly spiral out of control. For small and medium businesses, in particular, this is often a significant concern.
Analyst firm Gartner estimates that global enterprises waste as much as 35 percent of their total cloud spend. Over-provisioning of cloud infrastructure is considered to be the primary cause. This wastage can be reduced by using suitable cost management tools or relying on a partner that can help you manage cloud costs and usage and even optimize your cloud services.
Cloud computing is fundamental to increase the efficiency and benefits of a digital transformation. But migrating to the cloud is no easy task. E&P companies can gain a competitive advantage by partnering up with a service provider that has extensive experience with the oil and gas industry.
In Cegal we aim to provide the missing link between the E&P and IT departments and merge the different cultures, expectations, and approaches associated with each. We are happy to help your organization to transition to the cloud, and our cloud solutions GeoCloud and AgileCloud are available for any E&P company wanting to leverage the opportunities inherent in the cloud.