According to Pohlman International, an independent consulting firm specializing in information technology and the petroleum industry, the energy industry loves Windows 2000 (Win2K). Pohlman has released figures that clearly show that the petroleum industry is positively gushing over Win2K. The report states that, “Literally all companies will be moving to Win2K where it makes sense to them, and a phenomenally high percentage in all demographic segments indicated that Win2K was a major component in their IT strategy for the future.”
Despite many cutbacks in the petroleum industry, Pohlman's report shows that corporations are willing to pay for a Win2K conversion. “The oil and gas industry is now in the final phases of adjustment to the severe price disruptions which occurred during the latter half of 1998 and the first quarter of 1999,” read the report. “This has hit the computer technology suppliers hard, even though our industry is critically dependent upon computers to maintain profitability. We have noted severe downturns in the purchase of both hardware and software in nearly every market segment. One of the few exceptions has been the commitment of companies to covert their infrastructure from UNIX to Win2K.”
The report runs through the numbers. During the radical cutbacks of this earlier period, Win2K deployment budgets suffered significantly less. In the fourth quarter of 1998, petroleum companies executed an average of 26 percent budget cutbacks; these cutbacks grew to 40 percent in the first quarter of 1999. Over this same period, the industry cut its Win2K deployment budgets a mere 22 percent, on average. Similar numbers for the ensuing recovery period show that Win2K deployment spending increased more quickly than did average spending.
The report notes that oil company respondents cite the cost of purchase as their number 1 reason for software implementation decisions. The following table shows the top five reasons for moving to Win2K, in order of frequency:
Reasons for Moving to Win2K Now
1. Issues of cost
2. Availability of appropriate software with capabilities to perform necessary tasks
3. Compatibility of products across traditional disciplinary/business unit lines (universal platform)
4. Win2K delivered, and it works
5. End user demand
Pohlman’s analysis projects that 80 percent of the petroleum industry's current $20 billion inventory of UNIX products is vulnerable to replacement by Win2K. John Pohlman, president of Pohlman, wrote “It is clear that the impression Windows has made upon those making those purchase decisions is one wherein the cost savings possible outweigh the current reticence to spend… Oil and gas companies are now much more comfortable with the ideal of Win2K as the fundamental solution which will help to establish the long-sought idea of a universal platform for all computing applications.” I asked John Pohlman whether his analysis was unique to the petroleum industry, or if it applied to industry in general. “The oil industry is a bit unique in many ways, but at heart we are a conservative, good-old-boy network who will not adopt a new technology until someone, preferably several someones, have demonstrated its value," he said. "Then everyone moves en masse. We have reached that point with Windows NT… Ergo, our numbers are a bit drastic compared to many other industries, like pharmaceuticals and aerospace. However, we are observing the same trends in those industries with more money and even shorter timeframes.” For more information about the Pohlman report, visit http://www.pohlman-intl.com/. A new report will be available in April.