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Executive Summary
This article explores the risks of cloud solutions in oil & gas, citing Google Drive data loss as a cautionary tale.
- Cloud is not as secure as you think
- Data ownership is a real problem under cloud systems
- Dependence on cloud providers poses significant switching cost risks and the potential for vendor lock-in.
- Understanding Total Cost of Ownership requires a critical understanding of the underlying security infrastructure required to run the cloud.
Highlights data ownership concerns, compliance challenges, and the threat of dependency and vendor lock-in.
There is extensive compounded dependence on shared technologies, visibility issues, and service disruptions when discussing the short-comings of cloud solutions.
This article emphasizes the hidden total cost of ownership (TCO), potential vendor constraints, and data security vulnerabilities within centralized cloud systems.
The author urges a balanced approach to evaluating cloud solutions, emphasizing the need for rigorous risk assessment, contractual frameworks, and enhanced cybersecurity protocols to navigate the evolving cloud landscape in the industry.
Moreover, the article urges the reader to consider the historical alternative to cloud, on-premise, critically rather than through marketing heavy jargon which dominates the cloud versus on-prem discussion due to special interests.
Recently Google Drive Experienced Data Loss for several users. It begs the question, is Cloud as safe as people think it is?
- Google is investigating reports of vanished personal files from Google Drive
- One user lost data back to May, sought support but couldn’t recover files despite assistance.
Understanding the Risks | Oil and Gas Data Security
In the dynamic realm of the oil and gas industry, the embrace of cloud solutions appears as a beacon of modernity, promising seamless operations and enhanced efficiency. However, the allure of convenience often obscures a critical concern: the relinquishment of control over vital data assets. This poses risk for oil and gas data security and raises the question of which is the right oil and gas data management software.
Benefits of Cloud and the Trade-Offs
Cloud solutions undoubtedly offer an array of benefits, from scalable storage to real-time accessibility. Yet, within this seemingly boundless expanse of virtual infrastructure, lies a fundamental trade-off: the erosion of autonomy in data ownership and governance.
Is this a risk you are willing to take for your oil and gas production data? Oil and gas data security is the main concern of any operator, royalty firm, and firms looking to evaluate the financial health of an oil and gas company.
The Data Ownership Question
While cloud services tout robust security measures, the opacity of their internal workings leaves a lingering ambiguity. Who ultimately wields authority over the data? Can the assurances of encryption and access controls assuage the unease of potential breaches or unauthorized access?
The oil and gas data management software you choose should be one you can control and own.
Data Compliance and Regulation Questions
Moreover, the nature of regulatory compliance further complicates this landscape.
Different geographical jurisdictions impose distinct mandates regarding data storage, leading to a convoluted mesh of legalities that cloud providers must navigate.
Have you ever read the terms of conditions for Google? Probably not, but the reality is that those terms are there to protect Google the corporate entity, not you, the user.
Consequently, the jurisdictional sovereignty over this sensitive information becomes blurred, raising pertinent questions about accountability and liability.
In the event your oil and gas data security is compromised, the last thing you would want to worry about is involving several lawyers in several jurisdictions.
You should control your oil and gas data security within your own organization instead of trusting the so-called cloud software “savants”.
The Dependency Problem
Beyond the security quandaries, the dependency on cloud solutions might impede innovation. The tethering to specific platforms could stifle the freedom to explore novel analytics or deploy customized solutions that cater precisely to the unique needs of oil and gas operations. The prospect of vendor lock-in casts a shadow on the industry’s agility and capacity to evolve independently.
The allure of convenience must be balanced against the imperative of safeguarding critical assets and preserving sovereignty over proprietary data. Striking this equilibrium necessitates a meticulous evaluation of risk tolerance, robust contractual frameworks delineating ownership and control, and a continuous vigilance bolstered by robust cybersecurity protocols.
Ultimately, while cloud solutions present a compelling case for efficiency and scalability, the relinquishment of control over crucial data poses a problem. In the intricate landscape of the oil and gas sector, where confidentiality and precision are imperative, the journey towards the cloud necessitates a judicious assessment of the trade-offs between convenience and sovereignty.
In Critical Infrastructure and the Cloud: Policy for Emerging Risk
Compounded Dependence, Delegated Control & Visibility Problem
Cloud systems heavily rely on a few core services and technologies to cater to diverse customer needs. This reliance on shared technologies across sectors increases efficiency but also amplifies risk. For instance, hypervisors, which enable multiple customers to use a single server, pose security threats if compromised. The use of common technologies, like Intel processors, creates vulnerabilities affecting multiple cloud service providers (CSPs). Despite vulnerabilities, on-premises deployments, while individually more vulnerable, have limited interconnectedness, making widespread attacks more challenging compared to cloud systems.
Shared responsibility models in cloud security have led to breaches due to misconfigurations by users, highlighting the need for clearer CSP guidance and support for secure configurations. However, systemic risks arise when a misconfiguration affects multiple deployments across CSPs, making them targets for attackers scanning for vulnerabilities.
Delegated control and visibility in cloud systems mean customers relinquish control over infrastructure, making risk management and oversight challenging for both customers and regulators. CSPs’ opaque infrastructure, subcontracting practices, and layered dependencies hinder visibility during security incidents. The lack of standardized logging and understanding of complex dependencies further complicates risk assessment.
The complexities inherent in cloud systems challenge even CSPs’ understanding of their own infrastructure. This opacity places the onus of managing systemic risks solely on CSPs, leaving regulators and customers with limited oversight. There’s a need for improved standardization, transparency, and shared responsibility among CSPs, regulators, and users in managing and mitigating cloud risks.
Service Disruptions and Downtime
The industry’s reliance on cloud infrastructure means susceptibility to service disruptions and downtime.
While providers often boast high uptime percentages, any unforeseen downtime—be it due to technical issues, cyberattacks, or maintenance—can halt critical operations.
For an industry where uninterrupted data access and real-time analytics are pivotal, such disruptions pose a substantial risk to productivity and decision-making.
Cloud computing outages are on the rise, and some of the problems may only get worse. Read more about why cloud computing outages are a real and rising risk here. Oil and gas data in the cloud is a belief fueled by high marketing spend by cloud providers, but oftentimes lacks any real evidence for claims of reliability, speed, or cost savings.
One key idea regarding service disruptions is the cost associated with downtime. When operations are halted, what does it cost the business in terms of overhead, and what does it cost to fix the issues, can they be fixed?
Vendor Lock-in and Adaptability
Cloud dependency may lead to vendor lock-in, limiting flexibility and adaptability.
As technology evolves or operational needs change, the challenge of migrating away from a particular cloud provider becomes daunting. This lack of portability may hinder the industry’s ability to embrace innovative solutions or adapt swiftly to emerging technologies, impeding progress and growth.
Not only can your data get locked within a given provider, price increases are all too common. Read more about the inflating cost of cloud servicing here.
The most important thing to consider when evaluating a cloud solution is the “Exit Price”. Meaning, how much could it cost to switch back to a on-premise solution or another cloud solution. Is it even possible to move the data easily? Will the cloud provider make it easy or drop ASCII data that you can barely read? These are costs which are externalized when you first sign-up for a cloud service, but which can pose serious risk down the road.
The "Cloud Solutions" of Oil and Gas and their Risks
In recent years several firms have entered the oil and gas ecosystem flush with VC funding and with VC dreams aching to replicate 10X returns. Oftentimes, the rush for high-margins means convoluting existing technology stacks in favor of pricier cloud alternatives.
But can the one-trick pony that is cloud modernization work in oil and gas? They say it worked in healthcare, defense, and transportation. So they say. The question is are these the solutions you should rely on for your oil and gas data management software needs?
A quick Google search on the success of the cloud in healthcare, defense, and transportation will yield several consultants, service providers, and venture capitalist articles on how successful the cloud is.
But you know who else is growing their margins as cloud adoption grows? The cybersecurity firms.
You see dear reader, cloud seems cheap when you think of the rates in the first or second year. In other words, the teaser rate is a blessing for the headaches it seems to solve. But give me another week and I’ll give you a real teaser of the real total-cost of ownership (TCO) of cloud. The sticker shock is real, it’s just not as easy to see as that on-premise server which you pay in cash and then have to set up.
A real problem arises when oil and gas companies become locked-in with a given vendor, have to bear subpar service and software performance, and then are at risk of losing their data and have to temporarily halt operations.
This barely begins to discuss the real total cost of ownership problem and data security issues that will continue to grow as centralized cloud becomes a larger target for cyber crime.
