The Pack

A pattern emerges. In the energy world it seems to show itself over and over. Reputation is more important than technology. I have watched two companies compete for E&P customers. They offer virtually the same product using off-the-shelf components. They are, in fact, a communications services provider. They don't sell for less and yet the seem to be taking market share from everyone. Why?

They are not arrogant; they answer the phone when it rings; they do what they say they are going to do. Sounds like a good service provider. In the upstream energy sector nothing else has really mattered over time but price among conventional service providers. One dollar cheaper gets you the business.

The reason this doesn't really apply to IT in energy is that those who procure for general IT are different than those who procure for conventional drilling project services and general IT is not so commoditized within energy as the regular service companies. We are at a point of market adoption of general IT tools in the energy sector and so price is less important. Maybe IT is becoming more empowered and they don't want to fail and so, again, price is less important. What I think the market is really telling me (us) us that the value of new, faster information flow is so great price is not the issue.

Whatever it is..oil companies seems to rely on each other's satisfaction and when they agree...you had better hope you are standing in the correct square or else your future is going to be ugly. They are a pack.