Oil & Energy: Growth is on the horizon.

2015 was a very hard year for many of the industries’ energy companies, especially giving the downturn in the price of oil as well as the decrease in the number of offshore permits applied for and granted here in the United States. The oil industry in the United States has lost 70,000 jobs in the downturn, the Federal Reserve estimates. At least ten U.S. oil and gas companies, accounting for more than $2 billion in debt, had filed for bankruptcy in the fourth quarter of 2015.

And given the current political climate, who knows what the future will bring, regardless of which side of the election you might be on. But there are bright spots, especially with open source in the oil and energy sectors.

For Red Hat, there’s been positive growth in fiscal year 2016 in the energy sector, and that should set us up nicely to continue to deliver value and increased relevance for our energy and utility customers and partners.

Across energy and utilities (E&U), we saw an increase of workloads moving to open source in both IT and operations technology (OT). Platforms for energy trading, metering, Supervisory Control and Data Acquisition (SCADA), substation automation, and energy management were again big wins for Red Hat, our customers, independent software vendor (ISV) partners and systems integrators.

Business drivers, including regulatory changes like the North American Electric Reliability Corp. Critical Infrastructure Protection standards Version 5 (NERC CIP 5), the connected enterprise and the Internet of Things (IoT), as well as the ongoing modernization of legacy systems, have helped to validate how supported, enterprise-class open source can deliver needed innovation with an eye on the bottom line.

Also, involvement in areas like The Open Field Message Bus (OpenFMB) and Distributed Network Protocol 3 (DNP-3) working groups are further demonstrating just how powerful open source can be for security, interoperability and scale.

But we’re not done!

Many years ago Linux was a logical choice for many exploration and production workloads given the capabilities for high-performance computing. Now, across the entire energy supply chain, open source provides additional capabilities to continue to drive innovation as well as help to cut costs—a critical advantage given the industry’s financial pressures.

Adoption of open source by traditionally proprietary companies like Microsoft for workloads like Azure and even now SQL Server show the future is bright.

I’ve often heard energy executives talk about how their companies are not like Facebook or Google, two companies that have built their legacies on open source. I think many are starting to realize that they actually need to be more like these companies to enable a faster rate of innovation while also addressing their legacy cost models.

It’s an exciting time in the industry both for technology and energy.  It is most definitely an exciting time for Red Hat!

 

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