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Microsoft to Drive Digital Overhaul of Oil & Gas Enterprises

Microsoft MSFT recently partnered with Baker Hughes BKR and C3.ai, with an aim to usher in digital transformation in oil and gas enterprises.

The companies intend to facilitate adoption of advanced AI-driven secure, reliable and sustainable solutions to aid the energy industry players in accelerating business processes in this digital age.

The new solutions utilize Microsoft Azure’s robust cloud computing capabilities, Baker Hughes’ technical expertise in energy AI solutions, and C3.ai’s AI platform and applications.

Moreover, the solutions enable inventory optimization, energy management, predictive maintenance, equipment reliability, among other challenges concerning the energy industry. This in turn aids the enterprises to seamlessly deploy scalable AI applications on Azure.

Notably, the latest development comes following the collaboration between Baker Hughes and C3.ai to implement AI in the oilfield. Notably, these two companies will now develop BHC3 AI Suite on Azure, which is a positive for Microsoft.

We believe this deal encourages Azure’s prospects in the energy industry and, is expected to aid Microsoft expand presence in the cloud computing market against Amazon’s AMZN Amazon Web Services (AWS), Alphabet’s GOOGL Google Cloud Platform (GCP), IBM Cloud, to name a few.

Increasing adoption of Azure to support AI-driven solutions for energy sector provides exposes the cloud platform to this domain, which is a positive.


 

Further, expanding Azure clientele is instilling investor optimism in the stock. Notably, shares of Microsoft have returned 48.1% year to date, outperforming the industry’s rally of 40.2%.

Immense Scope of AI & Cloud Computing in Energy Vertical

Growing clout of robotics and industrial automation technologies in the energy sector is fueling adoption of ML and AI based techniques.

Advanced AI-based solutions are enabling companies to optimize costs as it facilitates use of reliable maintenance and prediction systems with comparatively lower investments and reduces risk of failure.

Per Technavio, AI in energy market is projected to witness a CAGR of over 49%, between 2019 and 2023. Moreover, per MarketsandMarkets, oil and gas cloud applications market is envisioned to hit .4 billion by 2024 from .9 billion in 2019, at a CAGR of 14.2% between 2019 and 2024.

The development and deployment of these advanced AI-driven energy solutions on Azure platform holds promise for Microsoft in the longer haul.

Markedly, competition is intensifying as Azure’s peers including AWS, IBM Cloud and Google Cloud are leaving no stone unturned to make the most of prospects of AI and cloud computing in the energy sector.

It is important to note that AWS has a dedicated portal of robust cloud computing solutions for Oil and Gas companies, including digital oilfields and High Performance Computing (HPC) eBook.

Moreover, robust capabilities of IBM Cloud, Watson, AI, IoT and blockchain solutions pertaining to the energy sector are enabling companies to effectively boost efficiency and minimize expenditure.

Further, GCP enables customers in the oil and gas sector, including Cognite and Veolia, to deploy advanced modeling and simulation, monitor oil platforms and upscale workloads to boost productivity.

Nonetheless, Microsoft’s strength in Azure, AI, ML and deep learning capabilities are expected to provide it an edge over peers, with the latest partnership. Notably, per a report from Synergy Research Group, Azure witnessed expansion in public cloud services market in third-quarter 2019.

Zacks Rank

Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
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Baker Hughes, a GE company (BKR): Free Stock Analysis Report
 
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