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Cloud Tiering: The Silver Bullet for Optimizing Data and Costs in the Energy Industry
Cloud Tiering: The Silver Bullet for Optimizing Data and Costs in the Energy Industry

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The energy sector is a treasure trove of data – from seismic, drilling, and production records, to a host of other valuable information. However, with the amount of data generated and collected increasing every day, storing it all can be a costly affair. This is where efficient data management comes in – it enables energy companies to streamline their data storage, analysis, and utilization, making critical decisions, optimizing production, forecasting, and reducing operational costs. Proper data management practices can help energy companies achieve increased operational efficiency, reduced costs, and improved decision-making. In fact, effective data management is an essential ingredient for the success and sustainability of energy companies.

Cloud tiering is a data management technique that is widely used in the energy sector to optimize data storage and reduce storage costs. The energy sector generates and collects vast amounts of data, such as seismic, drilling, and production data, which needs to be efficiently managed, stored, and analyzed. With cloud tiering, energy companies can automatically move their data between different tiers of storage, based on the data’s level of importance, access frequency, and other defined criteria. For example, frequently accessed data can be stored in high-performance storage media like solid-state drives or magnetic disks, while less frequently accessed data can be moved to lower-cost, high-capacity storage media like cloud storage or tape-based storage.

Cloud tiering is often implemented using software-defined storage (SDS) solutions, which automate the process of data placement and movement across different storage tiers. This helps energy companies streamline their data storage, analysis, and use, ultimately contributing to increased operational efficiency, reduced costs, and improved decision-making. Advanced cloud tiering solutions take it a step further and use machine learning algorithms and metadata analytics to analyze data access patterns and move data to the most suitable storage tier based on its usage frequency.

The Challenges of Data Storage in the Energy Sector

As mentioned above, The energy sector generates and collects vast amounts of data from various sources. For instance, on average, 80,000 sensors on a modern offshore drilling platform generate data amounting to 10 TB/day. When you multiply it by the number of sensors across multiple geographies and days, the total becomes enormous. This data is used for various purposes, including optimizing production, improving safety, and reducing environmental impact. However, this data of little value unless it is analyzed, optimized, and mobilized. It becomes a sprawl that eventually turns into a swamp, leading to increased costs and reduced efficiency. Here are some common challenges faced:

  1. The ever increasing sprawl of unstructured data: 90% of data generated is unstructured. Sprawls of unanalyzed unstructured data lead to inefficient data usage and security and governance issues. Data storage becomes a pointless activity that results in increased storage costs and carbon footprint due to large-scale infrastructures. Moreover, 80% of the time, employees spend searching through unstructured data to make decisions and complete tasks. Four out of every five working days in the industry are devoted to researching unstructured data. If the data is not managed correctly, it won’t be accessible at the right time, resulting in delays in business processes, increased costs, and inefficient operations.
  2. The cost of storing and managing large amounts of data: Managing and storing large amounts of data can be a costly endeavor for energy companies. Traditional on-premise storage solutions require significant capital investments and ongoing maintenance costs, which can quickly add up. The average cost of storing a single terabyte of file data is estimated to be around $3,351 per year. However, this cost is just the beginning, as organizations must store data for extended periods to comply with regulatory requirements, and also account for IT resources like hardware, software, and personnel required to manage and safeguard their data. To make matters worse, up to 80% of this data is unstructured, meaning that organizations have no idea what’s in there but must still bear the cost of storing it, which can amount to millions of dollars. This situation doesn’t make sense from a financial perspective, as it’s simply a waste of money, time, and resources. The challenge lies in finding effective ways to manage unstructured data and ensure that only valuable data is stored, while the rest is discarded or archived.
  3. The need for secure & compliant data storage and management practices: Data breach costs in the energy industry ranked fifth behind the healthcare, financial, pharmaceutical, and technology industries. The cost of a breach in the energy industry is $4.65m, which is significantly more than average. The nature of the data collected and stored in the energy sector makes it attractive to cybercriminals seeking to steal valuable data or disrupt operations. Additionally, regulatory compliance requirements in the energy sector require companies to implement secure data storage and management practices to protect sensitive information and avoid costly fines. Data truly is the most important asset and the risk of mishandling or rogue data access can lead to massive reputational and financial impacts. 

Click here to read more about How Cloud tiering can help energy companies.


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