For many Energy sector customers, IT plans from just a quarter ago are under scrutiny amidst the new oil price reality. While some greet such price drops with fear, I see many forward-thinking Oil & Gas leaders seizing the dramatic shift for competitive gain. Here are three strategies our customers are using to position for market advantage, based on my recent site visits and conversations.
1 – Leveraging Subscription-Based Models
Rather than impulsively slashing costs and outright stopping projects, composed veteran leaders are getting creative in how to fund initiatives they know matter long-term. They have been through down cycles before. This approach was already underway before the economic shift, and is now trending upward: cloud provisioning.
At a major South American-based mining company, project sponsors are shrewdly avoiding any large, upfront capital outlays for hardware and software (formerly typical at project upstart). Instead, they are looking at yearly subscriptions to the same functionality — without the initial procurement and maintenance investment.
This turns a $1M one-time check writing exercise into a series of responsible, affordable payments. Most importantly, as one recent EMC Documentum customer described it, a private, public or hybrid cloud strategy ensures “no strategic dead end.” They will reap advantages in both the long and short term. They will keep their companies alive.
If and when oil prices increase, they will have made progress on critical initiatives like optimizing capital projects. If prices stay low, they are holding to fiscal responsibility while still developing competitive advantage. In fact, they are able to “have it all” with immediate, budgeted access to technology, as well as the ability to Continue reading