In the movie Steve Jobs, Michael Fassbender who plays Jobs, draws an ideological split with Seth Rogen’s Wozniak, over opposing perspectives on the democratization of computing. Jobs wanted a closed end-to-end control while Woz wanted it open. We all know how it went down when we buy a $70 thunderbolt cable today.
In the consumer space it is easier to be arrogant and control the fate of your business by deciding to keep it closed. That is the reason why a lot of the apps and devices you use today don’t play well with other apps and devices or don’t have 100% parity on a competitor’s platform. In the business space the luxury of a closed system is quickly waning as providers are realizing that open is the way to go.
The Oil and Gas industry is a different story. The software side of the business is controlled by three primary players — Schlumberger, Halliburton, Baker Hughes (now GE). Then there are slightly smaller players like Petroleum Experts, IHS, Kappa and so on. But a large fraction of the market is controlled by companies that can be counted on your fingertips. This isn’t great for the customers in a few ways —
- Due to the price slump of oil everyone is keeping a close eye of their cash flow. But even though there are better, cheaper alternatives out there for the existing software, the organizations are unable to switch to a more reasonable option because replacement cost is high and the learning curve is steep.
- The replacement cost is high because none of the software plays well with another vendor’s software so replacement will mean completely yanking out the existing infrastructure and putting in a new one. Its quite disruptive and no one likes that.
- The learning curve is steep because Oil and Gas software is HARD. Companies spend thousands of dollars every year on getting their employees trained on a software. So even if something cheaper comes along they do nothing because they don’t want to incur an additional cost of training on the new platform.
- Oil companies have various assets and within each asset there are various disciplines. Each discipline prefers their own vendors. Schlumberger’s Geoscience stack is great while Halliburton’s Production stack is great. So the asset decides to purchase from these two vendors but now the Production Engineer’s and Geoscientist’s become silo’ed because, surprise surprise, these two software stacks don’t talk to each other.
- Like oil companies have discipline silos, the service companies have product line silos. And so going with one vendor doesn’t ensure seamless integration because even their own products don’t play well with each other.
So what can the oil companies do? And what can the service companies do? Oil companies can select smaller vendors who are more flexible and nimble in delivering openness features and dilute their loyalties to one big player. This puts pressure on the service companies to deliver and open their ecosystem to these smaller vendors and their own size-alike peers.
And the service companies need to think like Woz and not like Jobs. Corporations don’t like dealing with monoliths so creating one isn’t helpful. Be open and flourish.
We have created Nesh, A Smart assistant for Oil and Gas to open so that she can connect to and run existing data sources and applications using the conversational interface. And also, since no one ever took a training course in texting, learning to use Nesh comes as a zero cost. Plus she is fluent in Oilfield Science and Workflows that any organization can use and benefit from out-of-the-box.