The energy industry is a big spender when it comes to big data and analytics, according to a new study from ABI Research. The firm’s latest market forecast shows that spending on big data and analytics in the sector will amount to $7 billion in 2014 and rise to more than $21 billion by 2019, for a compound annual growth rate of 25 percent.
As an industry, energy has traditionally been conservative in adopting new forms of IT, says the study, “Big Data and Analytics in Energy Industry.” But the resistance to change has begun to soften.
“Greater shareholder pressure is pushing many energy groups to improve their returns after having it easy in the past,” Aapo Markkanen, principal analyst at ABI, said in a statement. “In such a highly asset-intensive field, huge cost savings are possible by making the operations more driven by data. Analytics allow the early movers to gain a critical competitive advantage over laggards, in a field where competing by the end product is seldom an option.”
In 2014, 63 percent of the spending is expected within upstream operations, ABI says, where big data is likely to revolutionize the exploration and production of resources. The downstream accounts for 31 percent of the total, reflecting the growing use of data in refining and the smart grid. The midstream represents 6 percent of the total, mostly for optimizing logistics.