IBM, Landmark deal takes Linux to oil industry

IBM and Landmark Graphics have signed a three-year deal to provide software, hardware and services to the global petroleum industry and could potentially make Linux the standard platform for oil and gas exploration and production.

Financial details were not provided for the agreement, announced Friday by IBM and Landmark, a wholly owned unit of Halliburton Co., one of the world's largest providers of products and services for the petroleum and energy industries. Landmark, based in Houston, supplies software and services for the oil and gas industry, including products for exploration, production, drilling, data management and business decision analysis.

The company approached IBM with Linux in mind, officials of both IBM and Landmark said. The deal is part of IBM's previously announced US$1 billion Linux initiative, and that effort is part of what attracted Landmark when it came time to forge the partnership, Landmark executives said.

"We clearly think they're the leader in the industry with the (Linux) investment they've made to date," said Landmark President and Chief Executive Officer Andy Lane.

The companies will offer Linux for advanced 3D graphics on desktops to Landmark customers, as well as server and mobile computing products and advanced cluster technology for supercomputing applications. IBM Global Services will offer operational support, outsourcing and IT consulting to Landmark customers as part of the deal. Halliburton's bevy of customers includes top oil and gas companies such as BP PLC, Shell Oil Co., Chevron/Texaco Corp. and Exxon Mobil Corp. That customer roster is why the deal could wind up making Linux the standard for the industry, executives said.

Landmark has had a schedule for porting applications to Linux and the deal means that customers will automatically be able to make the switch to that platform, said Lane and John Sherman, Landmark's executive vice president of marketing and systems.

What they didn't expect as they began porting desktop applications to Linux was the performance boost in computing speed they saw in tests, with two to five times improvement and in some cases up to 30 times. "It really surprised us," Lane said.

The possibility of even much smaller performance gains is exciting for the worldwide petroleum exploration and production (E&P) industry.

"What we're trying to do in essence is look down in the earth. These (computers) are MRIs on super steroids," Sherman said, comparing the procedure to magnetic resonance imaging, a medical procedure that takes highly detailed images of a patient's insides, including organs, tissues and blood flow.

E&P requires the ability to crunch enormous amounts of data as quickly as possible. That crunching ideally needs to take place at both, say, oil rigs out in the Gulf of Mexico as well as back at central data hubs, which can then disperse data analysis to other operations.

"The key to future success is in making oil-field management a real-time activity, not only for operation, but also for discovery," Sherman said.

The potential cost savings is enormous, said Eric Leon, general manager of IBM's Global Chemical and Petroleum Industry. In cases where those managing oil rigs have to wait multiple days for data analysis to be returned to them, important decisions about redirecting or stopping drilling, for instance, have to be put off.

"These rigs cost millions and millions per day" to operate, he said. "If you can save a day ... I think it could make a tremendous difference."

The E&P computer sector alone is estimated to spend more than US$2 billion annually on hardware, software and services. That includes "white-collar office spending" and does not take into account networks and the like, Sherman said, quoting a figure from Pohlman International Inc., a petroleum analysis firm.

The industry is Unix-heavy for reservoir analysis and management, and Landmark approached the IBM deal and its Linux focus as a possible way to save customers money by letting them work on one platform with the ability to plug-and-play machines and myriad peripherals all running on a single operating system.

"Supporting multiple flavors of Unix is expensive," Sherman said, though he quickly noted that Landmark will continue to offer customers Unix support. However, the plug-and-play possibilities are a key attraction of the deal.

"This is something we've never been able to do and it's really exciting," he said, predicting that within two to five years, companies will move toward standardizing on Linux.

The IBM-Landmark deal has potential implications beyond the petroleum industry because its focus is on Linux on the desktop, with the platform used as a technical workstation rather than for productivity, said Stacey Quandt, an analyst at Giga Information Group Inc. in Santa Clara, California.

"Anyone using a Linux cluster as a computational cluster or grid ... there's definitely potential for other applications," she said. Basically, any vertical industry that relies on high-end computational applications could benefit.

The movie industry has already discovered Linux for some applications, "but this is a different ballgame," Quandt said, referring to the level of data crunching that goes on in E&P and industries such as aerospace and pharmaceuticals, which could well find Linux on the desktop makes sense for them, too.

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