Chevron Signs Seven Year Deal With Microsoft In One Of Cloud’s Biggest Wins Yet – Forbes
Energy giant Chevron has selected Microsoft as its preferred cloud provider in one of the biggest head-to-head wins yet in a developing race between tech leaders for cloud computing customers.
Under the terms of the seven-year deal, Chevron will move its development of new applications to Microsoft’s cloud service Azure, as well as gradually shift over legacy data and applications already in operation. The two companies will also share research and development and embed technical staff with each other. Microsoft and Chevron didn’t disclose the terms of the deal, but given other recent deals such as a $1 billion contract from the U.S. Air Force in which Microsoft participated, the contract with Chevron likely runs into the hundreds of millions of dollars, if not billions.
“When you see a leader in energy picking our platform, it’s very significant,” says Tom Keane, Microsoft’s head of global infrastructure. “The fact that it’s a multi-year partnership really emphasizes that Microsoft is committing to work with its most important customers for the long haul.”
With cloud computing revenue increasingly driving growth at Google parent Alphabet, market leader Amazon Web Services and Microsoft – all three reported cloud as a major driver of strong earnings last week, with Google CEO Sundar Pichai announcing new customers Kohl’s and PayPal – Chevron’s one of the largest companies to pick a partner yet. The company reported revenue of $110.2 billion last year. And with global energy operations, Chevron produces and consumes vast amounts of data. One single new plant in Kazakhstan will stream data over more than one million sensors when it goes live in several years, says chief information officer Bill Braun, while a single seismic imaging operation produces 100 terabytes of data.
Chevron tried out the other leading cloud providers before selecting Microsoft, Braun says, in part for its geographic coverage and track record of working with large operations, including Chevron. “Until the last couple years, we didn’t think the cloud was ready for business at Chevron’s scale,” Braun says. “In the last couple years, that started to turn. The cloud is starting to come of age.”
While Microsoft’s ability to handle data residency issues in countries in which Chevron operates and its infrastructure horsepower to handle Chevron’s volumes of data played a role in the company’s selection, Braun says Chevron chose Microsoft in large part for its opportunities in research and development. Chevron plans to use Azure’s Internet of Things capability to help connect its many millions of sensors to the cloud, from plant machinery that can reveal potential for malfunction through aberrations in its movement to drill bits that pulse back data to ships six miles above their activity under the ocean’s floor. What to do with all that data, however, is a more complex question that Microsoft engineers will help to attempt to answer.
In terms of financial investment, Braun says the partnership is “a significant move” for Chevron. And why seven years: “We wanted to make a statement with them about how serious we were,” Chevron’s CIO says. “And it gives us time to go through the full portfolio of our applications.”