IBM and Schlumberger just partnered on a big oil initiative

IBM and oil industry services giant Schlumberger have partnered on a major initiative involving the buzzy technology of hybrid cloud computing.

The two companies revealed the partnership on Tuesday, pointing to the role of IBM’s Red Hat business in supplying the underlying technology that helps customers more easily build and run applications that operate in internal data centers and third-party cloud-computing data centers.

IBM and Schlumberger declined to comment about the deal’s financial details.

Schlumberger CEO Olivier Le Peuch explained that the partnership would result in technology that embodies the ongoing digital transformation of the oil industry. Although the oil industry has traditionally relied on heavy-duty equipment like deep-hole drilling machines, these devices were typically not connected to the Internet or configured to work with more cutting-edge analytical systems.

In theory, connecting oil equipment to the web and to cloud data centers lets engineers aggregate data across their entire fleet of devices, which can help companies more accurately track the performance of each device or improve specific operations like drilling. This so-called industrial IOT (or Internet of things) idea is becoming increasingly more popular among industries like energy and manufacturing.

But it’s difficult for companies to connect their machinery to both their internal data centers and cloud computing services without a lot of work. That’s why companies are increasingly using a type of data center technology, called container technology, which lets developers create apps that can run in multiple data centers—both internal and in the cloud.

IBM and Schlumberger began talking about an ambitious container project about a year ago and spent the past six months working on a proof-of-concept system for oil companies to use. Le Peuch described the new technology as helping geophysicists collect seismic data—which can be stored in a company’s internal data center, for instance—and then using different cloud machine-learning tools to analyze that information in order to perform a more precise “exploration of the well.”

IBM CEO Arvind Krishna said these data analytics projects for the oil industry can be more complex than tasks like weather modeling or other so-called high-performance computing jobs.

“These equations make them look like kindergarten work,” Krishna said.

Schlumberger has previously partnered with cloud-computing companies like Google and Microsoft to help power some of the machine learning services it offers clients. The new technology created with IBM presumably would help Schlumberger’s customers continue to use those cloud data-analytics services without having to move their data into third-party cloud data centers.

The idea of hybrid, or multi-cloud computing has become more popular among businesses that may be worried about storing all of their data with one cloud computing service, a notion referred to in the tech world as vendor lock-in. Additionally, Le Peuch said the new hybrid-cloud tech would be helpful for oil companies that must comply with government regulations limiting where they can store their data.

“That’s a game changer for us; it’s a game changer for our industry,” Le Peuch said.

An IBM spokesperson said that the companies have not disclosed pricing details and that the new services “will be offered by region in the months to come.”