Energy Sector on Jeopardize by Coronavirus, Oil price war; how to survive?

By | 2020-04-12T13:58:44-06:00 March 30th, 2020|

The challenges facing the energy industry are now mounting with the coronavirus pandemic outbreak pushing the global economy into recession and the oil price war between Saudi Arabia and Russia, sending barrel prices to the south.

The forecast for advanced and in developing economies are not good for the rest of the year, so companies are moving now to provide them with tools that can help them to save money and to prepare themselves for the moment when everything will be back on track.

Clouds in the energy sector upstream

The downturn that pundits have been predicting for well over a year now has finally arrived. While that has not yet happened to full effect, it has nonetheless cast a shadow over many decisions by energy executives.

With oil prices down in the $20 range, many technology decisions in the international oil and gas industry will be put on hold. History tells us this price war could lead to a lengthy glut in supply so low that prices may be there for a while.

Besides, the coronavirus COVID-19 pandemic outbreak is dragging the global economy into recession with immediate effects due to quarantines and social distancing measures but also long-term implications with all industries on hold and with money liquidity problems.

However, experts say that the global impact of COVID-19 will be huge and economies will head to recessions, but the recovery will be quick. Be sure your organization will be in the front line of the energy industry when the right time comes.

Cloud demand on the rise, not only Energy Industry

One interesting point about the cloud and new trends in the implementation of the labor force not only in the energy sector but in other industries is what is happening with Microsoft cloud services usage.

Recently, Microsoft reported a 775% increase in cloud demand due to the social effects in the Coronavirus COVID-19 pandemic outbreak. Walter Silin, CEO at The Bauen Group, affirms that the current pandemic crisis is showing how companies can interact differently with their internal and external clients.

“The current rise in cloud demand is a sign of changing times and a powerful tool to fight against global threats such as the coronavirus pandemic outbreak. People need to stay home, and cloud-powered services are giving them tools to maintain their productivity. It is just the beginning; the whole job landscape and the way companies interact are changing forever.”

Silin also highlighted that the winds of change in all industries are just beginning. “While many people are working remotely for the first time, our company has been entirely remote for nearly three years. We have developed tools for companies in the Food Services, Healthcare, and the Energy sector where they have taken profit and save money with cloud service.”

Actually, “we have always used Teams as our primary communication tool, and the service did not blink during the increased usage,” as an apparent reference on the cloud demand increase experienced by Microsoft in the last weeks and the reliability of the service provided.

Here are three reasons you should explore cost savings options now regardless of which direction prices turn next.

Microsoft 365 Security in the Cloud

Microsoft 365 Security in the Cloud

Your systems are getting old

Time treats everything equally, and your software and servers are no different. Each year your systems are getting older, but what does that really mean? Older systems are a liability for three concrete reasons: compatibility, performance, and security.

Older systems become less compatible with newer ones over time. While you may think this is to force you to upgrade and spend money, it’s really a function of cost on their end. Software and hardware vendors will only maintain backward compatibility for so long.

Performance does not decrease with age, but your system’s speed relative to new ones does. As your competition decides to upgrade, you are left running a little slower and a little behind. For some parts of your business, this might not seem to matter much, but the cumulative cost in time wasted across your organization can really be eye-opening.

Finally, there is security. For similar reasons to backward compatibility, there are limits to how far back companies will continue to develop specialized security patches for older versions. Hackers have no such limitations. New exploits for older hardware are continually being found and used to devastating effect. Holdouts on Windows XP will remember the global outbreak of ransomware that finally ended that operating system’s run in the corporate world.

Besides, the use of cryptocurrencies as a meaning of payment is becoming more and more popular. In that framework, your organization needs to have up-to-date solutions that support cryptocurrencies and blockchain interactions.

Your server always costs money

It may sound like an obvious thing, but your servers are costing you money every second. You bought those servers several years ago for a pretty penny. Yes, you paid upfront, but those servers in your data room or hosting provider cost you money for power and cooling too. Every second of every day of every month.

Turning them off is rarely an option these days because modern server hardware generally runs dozens of virtual servers, and they are part of some more massive cluster or network. They run even at 3 am when no one is using them. Merely possessing the hardware costs you money.

In the cloud, you don’t have to buy hardware. Also, you do not have to pay the service when you don’t use it. There are dozens of options to use cloud platforms versus on-premise servers to save serious money.

That’s because in the cloud you pay for consumption, not possession. Your virtualized servers can be turned off evenings and on the weekend when no one is working. If you need to run a process overnight, you can schedule the server to turn on for just that window, then shut back down.

There are even tools that charge by the second, literally only charging you for what you consume.

No one wants your servers

Let’s face it – no one wants your old tech. And in an acquisition situation, your costly infrastructure is not going to be a positive mark as suitors evaluate their bid.

Having a modern cloud-first approach increases the value of your company by making data and systems integration far more straightforward than it is with a traditional on-premise technology operation. Current market conditions would seem to suggest that acquisitions will be coming.

Teams infographic - Who and where is using Microsoft Teams

Teams infographic – Who and where is using Microsoft Teams

Be ready when the right time comes

Just pay attention to what’s happening with Microsoft cloud services usage. Cloud demand just rose by 775% in the last week due to stay home and social distancing measures in the United States and the rest of the world.

As Silin noted earlier, “current rise in cloud demand is a sign of changing times and a powerful tool to fight against global threats such as the coronavirus pandemic outbreak.” And it is just the beginning.

The labor market landscape is changing forever. Companies will start accepting more telecommuting and remote work, even for freelancers. Also, companies will interact more on the cloud with data-sharing information and technology solutions.

The data communication golden age is coming. So, get your organization ready to surf the wave with cloud solutions.

Safety, reliability, and cost reduction are just the tip of the iceberg as reasons for the change. The Bauen group, for example, has always used Teams as its primary communication tool, and the service did not blink during Microsoft’s increased usage. Always 100% online during crisis times.

About the Author:

Mauricio is a journalist and content strategist. He has been covering finances, technology, and entrepreneurship for more than a decade. He loves traveling, trying new things, and telling stories.