For the last decade, the technology landscape of the energy industry has resembled a wilderness at night – vast, dark and punctuated by innovative points of light. Over time, these points of light evolved into new software tools and became more like campfires – offering the industry new ways of working with raw data at a greater pace and scale but still unable to illuminate the whole map.
Recent consolidation, mergers and acquisitions mark the next phase in this evolution as the competitive focus shifts toward constructing robust platforms capable of interlinking these innovations into something greater than the sum of its parts. Much like how modern cities connect historic landmarks with modern infrastructure.
There is always a risk that consolidation will lead to platform lock-in and function “freeze out” based on who you go with, but it seems that dominance of open source and demand for customisation should keep the doors open for now
Companies such as Computer Modelling Group (CMG) and IMDEX exemplify this approach, actively pursuing acquisitions to expand their offerings and provide end-to-end solutions – from data management to asset modelling. In CMG’s case, this is an entirely new seismic solutions business built on the acquisition of Sharp Reflections, Bluware and most recently Seisware. In contrast, IMDEX’s purchase of Earth Science Analytics enhances its portfolio beyond its traditional strengths, and laying the technical foundation for their Digital Earth Knowledge business.
Well-established companies with a strong client base and core IP are also an attractive proposition – over the last few years, Carina Software have acquired a few familiar names in the industry: Ikon, Geoactive and Geosoftware to name a few, while Ellis and Geoteric both have new owners in place.
Both the latter companies have launched new products and services since their change in owners – particularly in AI-powered services and grown rapidly since new investment. These investors are not necessarily seeking to integrate the target company into a larger operational entity in the same industry but rather see substantial standalone growth potential.
Of course, these changes will have an impact on the end user beyond updated desktop icons and contracts. Personally, I am optimistic that better integration will lead to faster innovation and in turn provide the right tools for decision-making and supporting the future of the industry. There is always a risk that consolidation will lead to platform lock-in and function “freeze out” based on who you go with, but it seems that dominance of open source and demand for customisation should keep the doors open for now.
