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Podcast: CyrusOne CEO Dave Ferdman discusses the progress of Digital Transformation in Oil and Gas on OGGN

November 4, 2021

CyrusOne co-founder and interim President and CEO Dave Ferdman recently took a trip down memory lane and then looked ahead by way of the Oil & Gas Global Network (OGGN), the world’s largest network of podcasts for the industry.

Ferdman, who originally started the company to serve the oil and gas industry in Houston, joined OGGN host Michael O’Sullivan for the “Oil and Gas Tech” podcast, where he discussed the start of CyrusOne, the energy industry and how CyrusOne serves the industry through partnership with HPE GreenLake.

He recalled CyrusOne’s beginnings during the unknowns surrounding the Y2K crisis and the massive shift around technology at the time.

“The world had gone from using mainframe computers remotely to client server configurations in their campus,” Ferdman said. “With this big investment that just looked like the world was heading back toward a network center computing model, which today we call the cloud, and those types of models, we needed resilient digital infrastructure. Houston really didn’t have any data centers to support this massive energy sector.”

In swooped Ferdman and his partner.

“The initial thought was start in Houston, build some resilient infrastructure that could protect all of this new investment in technology and facilitate the growth and the evolution of the digital energy sector,” he continued.

O’Sullivan asked Ferdman to compare the Y2K era with today’s landscape. He said the periods are remarkably similar.

“There’s another big shift and clients and companies are probably still spending lots of money on consultants to help them figure out exactly what’s best for them,” Ferdman said. “Twenty years ago, everybody had all of their technology infrastructure on their campus in their building, using their local area networks to be able to operate. We went from that kind of model to moving into a data center, like CyrusOne, across town using Metro Fiber or a wide area network to help facilitate that interaction.”

Now, the shift is to the cloud.

“Which is a different step function in the infrastructure,” Ferdman added. “And so, every business is different, and just like every business was different 20 years ago, the companies in the enterprise evolved into the data centers. We’re at that same point today, and companies are trying to determine what is the most efficient and flexible solution that gives them most adaptability to grow their business. Companies like CyrusOne are still dead center in the middle of that conversation.”

Shifts like these should not be taken lightly, he cautioned.

“This is critical infrastructure,” Ferdman said. “This is your whole company. We run on these platforms and our employees are either productive or not, based on the operational readiness of these platforms. These are big decisions, and they’re also long-term decisions.”

O’Sullivan asked how CyrusOne guides customers through the process and these big decisions. Ferdman said the company leans on partners, like HPE, to act as advisors and operators.

“They build the client a private hybrid environment that includes everything from a CyrusOne data center to HPE equipment, then they actually bundle in the software,” he explained. “So, if somebody is just hypothetically a user of Oracle or SAP, they work with that. What’s really nice is it takes a lot of the guesswork out of it. We’ve got many clients that we’ve collaboratively worked with HPE using its GreenLake program.”

Removing that guesswork is vital to the process.

“The problem is if I do everything on my own, I have a certain level of risk,” he continued. “And if I send everything to the public cloud, there might be certain applications that perform better in a private cloud. This can take some guesswork. We have several very, very large deployments we’ve developed with HPE Greenlake, and the clients get to think about that solution as custom-tailored around everything, not just infrastructure, but software and operations.”

And having a third party with the right expertise guide the process has proven to be successful.

“We’re the backend infrastructure, and we want to give our clients the most dynamic, adaptable, scalable and sustainable solution,” Ferdman said. “But we also want our client to feel like, ‘I’m not over-buying. I’m not under-buying.’ And it’s hard because as these businesses change, there are times you need to scale down and there are times you need to scale up. We want to be that partner, but sometimes you need extra help.”

For the energy sector, deciding whether to scale up, when and how is particularly challenging because of the number of resources and their complexity – the data center, the bandwidth, the servers, the components that go into an application and how they interface.

“If you’re an enterprise IT group and you’re trying to do that on your own, the biggest challenge is you could have upwards 75 vendors, and you’re going to have to figure out a way to scale up and down these 75 vendors in real time,” Ferdman said. “It’s not possible if you don’t lean on someone like HPE.”

When it comes to digital infrastructure, it has to be a dynamic and scalable and adaptable solution, he added. It must also be sustainable, because sustainability is front and center. And it’s a challenge that only gets tougher by the day.

“We all work together,” Ferdman said. “But it’s individualized. What’s good for one company would not work for the next. And so, it’s a deal-by-deal basis, customer-by-customer, company-by-company approach. That’s how we’ve always had to fit out digital infrastructure.”

O’Sullivan noted the energy industry is hyper-competitive, secretive and not prone to sharing information with peers. At the same time, part of energy companies’ instinctive method of de-risking is to try to find out what their peers are doing and then do something similar. The same applies to their IT departments and digital strategies.

Yet, the collaboration in the energy sector is more prolific than anybody might really realize, Ferdman said.

“Strategically and architecturally, the oil and gas industry is an incredibly collaborative group of people and for several reasons,” he said. “A lot of the people who run the technology groups within the energy sector, they all at some point worked together, and then they all moved along their careers. We’ve seen the fiercest of competitors actually collaborate at a level no one would even imagine, because success for them is you turn on your network and everything’s working. Anything short of that is failure.”

While that doesn’t mean energy competitors share trade secrets, it does mean they share ideas on how to be more efficient with high-performance computing, compare notes on finding the right architecture, figure out what 5G means for that architecture, seek to understand the trends and find the right partner. Once an energy company finds a partner to help with implementation, O’Sullivan wondered what they should expect.

Ferdman said it’s different for every company.

But I think the energy sector is more well-positioned to deal with origination data, because for the last five or six years, or even longer, they’ve been dealing with lots of origination sensor data that had been coming out of the well or coming off the network to help them understand remotely how things are performing,” he said. “The energy sector is probably light years ahead of most other industries because they do rely on remote sensor data.”

The sector’s head start with technology includes 5G, he added.

“When you think about 5G and you think about origination data, whether it be 5G or sensor-based, the energy sector has been messing with this for a long time,” Ferdman said. “They probably have a better handle on what the infrastructure needs to look like to deal with lots of remote data.”

That doesn’t make the decisions on when and how to move into the cloud any easier for the players in the energy sector. So, Ferdman offered some advice: Educate oneself on everything available before making the big, long-term decisions.

“I would encourage anybody who’s ready to make an investment and who’s on the beginning of the planning side, before you spend too much time, really evaluate what’s out there because it could save you a lot of time, and more importantly, a lot of money,” he said. “Not just in the short-term, but in the long-term. Because as things change, you want something that will adapt with you. You need to have that. It’s available today.”

Finding a trusted partner to help is a good start.

“The world has definitely evolved, and I think just like 20 years ago where we were looking at new architectures and new opportunities, we’re at that moment again,” he said. “From a data center perspective, we are committed to being the best in the world, and we think we are when it comes to flexibility, and sustainability and adaptability. And so, we just need to know that our customers are going to be able to make the right decisions for their business. Sometimes it’s really helpful to have a partner like CyrusOne and HPE Greenlake on your team if you’re that head of enterprise technology.”

To listen to the complete podcast, click here.