Houston Baker Hughes Oil Services Merger, IoT, and Big Data

The merger of Baker Hughes with GE’s oil and gas division closed this Monday. Said Lorenzo Simonelli, the new chief executive of Baker Hughes and former chief of GE Oil & Gas “When we decided to complete this merger, it was really to create a transformation in the industry.”

There are many aspects to this merger:

• 23B merger creates the second largest firm of its kind
• The competition of Baker Hughes with Houston’s Halliburton and the global leader Schlumberger is intensified
• It is bringing together the combination of oil field expertise and software technology

What I find most unique is the technology side of the merger. GE has already set its sights on Big Data and its connection to Oil and Gas. However, GE has much more to gain. As an article in Forbes explains, GE thinks of itself more as Microsoft and less as Ford.

And yet, GE is even more ambitious. It is betting big on Big Data, Analytics, and on the Internet of Things. In a great article in the MIT Sloan Review, Laura Winig details the GE policy of becoming a Technology Company, which is in their eyes is the same as an Industrial Company.

GE seems to fully understand the upcoming effect of the Internet of Things. They have committed one billion dollars to put sensors on gas turbines, jet engines, and other machines and connect them to the cloud. Then they will analyze the resulting flows of data. With this, they are on the way to identify ways to improve machine productivity and reliability.

Maciej Kranz, one of the world’s leading thinkers about the Internet of Things, explains in his book, “Building the Internet of Things” that IoT belongs to every company. He also talks about how to start thinking in this new world, and how to reinvent your company. GE seems to get it exactly right.

The major impact of the merger on Baker Hughes has to be exactly that: absorbing the thinking of its merger partner and becoming a major Technology Company as well. To actualize the motto, “Data is the New Oil,” many O&G companies would do well to adopt this thinking, but Baker Hughes may be in a unique position to do so.

In Houston, it is a sign of exciting things to come. At Elephant Scale, we have many courses on Big Data, Machine Learning, Cloud, and more, such as IoT, are coming. We have been sponsoring and growing the Houston Meetup dedicated to these subjects. We have recently contributed a chapter on Big Data in O&G in a book published by Springer.

We are ready to welcome the upcoming Houston’s transformation.