Open sourcing oil and gas…
The oil price crashed. All of a sudden the industry needs to dramatically reduce costs if it wants to stay profitable. The oil and gas industry is one of the few industries that has created bespoke solutions for every well. Part of the explanation for this is that each oil and gas platform behaves differently. Drilling and pumping oil is not a predictable business. There can be bubbles, obstructions, lots of oil, variable pressure, etc.
However the bigger explanation is that in a highly profitable business, IT costs were just a drop in the ocean and it was a lot more profitable to focus on maximizing output then optimizing costs. This reality has changed with the oil prices falling extremely low and shale gas creating oversupply for the first time in history.
How can open source help the energy industry?
At this moment each IT solution in oil and gas is bespoke. By open sourcing a next-generation oil and gas management platform, adoption will be a lot higher than any proprietary solution. If the solution focuses on the communalities more than the differences and abstracts complexities then 80% of the average use cases can easily be covered. The remaining 20% will still be bespoke but if an automated change management solution is put in place then automatic upgrades and rollbacks will reduce costs of the bespoke parts substantially as well.
Looking for a name for this new platform? Let’s call it EnergyStack for the moment. Openstack is the open source private cloud technology that is currently revolutionizing the IT landscape. Although EnergyStack is probably going to get born and managed in a different way, Openstack is a good example of how an industry has been revolutionized and solutions of equal quality have been brought to market at a factor of a tenth of the price of the incumbent solution.
How to kickoff EnergyStack?
Incumbent IT players will be the once that get commoditized by an open source energy management platform, for which they are not the right players to push the idea. The ideal players are challengers that join a couple of early adopters. The main problem is finding financing because in an economically challenging moment investing to save costs is not the strength of a chief financial officer that manages capex on a quarterly basis. So anybody that has a good idea, don’t hesitate to share it.