Hess Corporation Case Study

Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. Founded in 1933, Hess Corporation has offices in more than a dozen countries. The company has its headquarters in New York, N.Y. and regional headquarters in Houston, Texas and Kuala Lumpur, Malaysia.

Companies acquire and divest businesses for strategic, financial, and other reasons. The process can affect all parts of an organization and cause organization and business disruptions if not managed efficiently. In 2013, Hess decided to streamline its business to focus on energy exploration and production (E&P). As part of the process, the company announced in March 2013 its intention to divest its downstream businesses, including retail, energy marketing, and terminals. In anticipation of separating business systems and data for potential buyers, Hess IT initiated work on Amazon Web Services (AWS) in July 2013 and entered a contractual agreement to have the environment operational and in production by January 2014. 

“We had been experimenting around the edges of cloud technology and infrastructure as a service (IaaS); the divestment announcement gave us the perfect opportunity to accelerate the adoption rate,” says Lead Architect Jim McDonald. “We had an obligation to deliver a functioning, operational infrastructure to the buyer. We also had an obligation to Hess to make sure that infrastructure could be handed off in short order, both legally and physically. Using the cloud enabled us to meet all of these requirements and we are thrilled with the results.”

The IT organization had started cloud conversations with Nimbo, an Advanced Consulting Partner with the AWS Partner Network (APN) in early 2013. Working with Nimbo, Hess developed a short list of cloud providers and ultimately chose Amazon Web Services (AWS).

“We didn’t have time to re-design applications,” says McDonald. “AWS could support our legacy 32-bit applications on Windows Server 2003, a variety of SQL Server and Oracle databases, and a robust Citrix environment."

Preparing an infrastructure for acquisition

To prepare the infrastructure for migration to AWS, Hess and Nimbo developed a two-prong approach that they implemented in parallel:

• A detailed inventory that identified the servers to be moved, operating system levels, processor and memory requirements, storage configuration, and backup and restore requirements
• An application review process that identified the applications that would transition to the buyer, integration points, performance requirements, remote access, disk consumption and growth

“We didn’t want to make any changes to the infrastructure that would complicate the move,” says McDonald. “Whenever possible, we built the instances on AWS to the same specifications as the on-premises environment.”

Ira Bell, co-founder and COO of Nimbo recalls, “We believe that AWS was instrumental in helping to materialize the concept of packaging the entire organization up and handing it over to the buyer. We worked at treating the Energy Marketing business as if it were a living object. We spent a lot of time thinking about how we could take that object and put it in to an escrow type of environment or something considered a neutral zone. It was extremely important that the business continue to thrive and be successful during the transition.”

Hess selected a series of pilot applications in July and began building out the base infrastructure on the AWS platform. After developing quick wins and getting buy-in from leadership, the team spent several weeks gathering detailed information on the remaining application portfolio and providing guidance to Nimbo on security requirements.

Working in a cloud environment was an organizational and cultural shift for Hess and it was critical to get the application teams in agreement. “Getting everyone more comfortable with the capabilities of the AWS platform and believing in this approach was extremely important,” says McDonald. Nimbo set up informal sessions to give the application developers — who wouldn’t normally be exposed to AWS — an opportunity to learn about core cloud technologies and functionality.

Seamless migration to the cloud

Hess established a VPN connection in August 2013 to bridge its on-premises data center using Amazon Virtual Private Cloud (Amazon VPC) on AWS. “Amazon VPC was a great way for us to logically separate the servers into appropriate subnets and apply network configuration the way we wanted.”

As the company’s needs evolved, Hess switched to AWS Direct Connect with a 1Gbps connection for more consistent network performance. “We had some fairly complex data replication requirements during the migration,” says McDonald. “Everything worked as expected and our support teams could use the same tools to manage servers that they had grown accustomed to in our data center. The cloud was basically an extension of our network.”

Hess migrated approximately 300 servers to AWS in the US East (Northern Virginia) Region. Amazon Elastic Block Store (Amazon EBS) attached to Amazon Elastic Compute Cloud (Amazon EC2) instances provides block level storage for almost 500 TB of data. Provisioned IOPS volumes for storage in conjunction with instances optimized for EBS provide consistent and low-latency performance for servers with more strenuous IO demands. In extreme cases, provisioned IOPS volumes were configured as a RAID array to increase performance.

In addition, the environment spanned multiple Availability Zones to better position the environment for disaster recovery (DR). McDonald comments, “While we weren’t contractually obligated to deliver DR capability, we placed the development environment in a second Availability Zone so that the buyer could use it as the basis of a DR plan.”

For its on-premises environment, Hess uses a tape backup system. On AWS, the team configured the platform to create snapshots of every volume and store them in Amazon Simple Storage Service (Amazon S3) for nightly backups of data. The snapshots attach to instances for file retrieval or for rollback purposes. “Snapshots covered us for both server failures and accidental data deletion or corruption,” says McDonald. “We took advantage of the ability to easily copy snapshots within the same Region to another AWS Region by using the Amazon EC2 console, Amazon EC2 command line interface (CLI) tools, or an API. We used snapshot copies to create backups of data and to create new Amazon EBS volumes and standard Amazon Machine Images (AMIs) running Microsoft Windows Server 2003 and Windows Server 2008.”

Hess used multiple versions of Microsoft SQL Server in the environment, including standard and enterprise versions of SQL Server 2000, SQL Server 2005 and SQL Server 2008. To create backups for the SQL Server databases and its Oracle databases, the company used native database backup tools to store data first in Amazon S3 and then into Amazon Glacier for long-term archiving.

Amazon CloudWatch monitors cloud resources and the applications. The company’s on-premises infrastructure included NetScaler devices for load balancing and F5 for application firewall management. Hess used the AWS Marketplace to virtualize the on-premises devices on the cloud.

Flexibility to build environments quickly

The IT environment for Energy Marketing has about 50 percent off-the-shelf software and 50 percent custom applications. Almost all of the custom applications were developed using the Microsoft .NET framework. Most of the applications (both custom and off the shelf) use SQL Server databases or Oracle as necessary. About 70 percent of the applications are web-based and the remaining are “thick client” (i.e., running on computers that are connected to a network.)

Hess took advantage of the AWS platform to create quickly, build out the environment, and fail fast. “If something didn’t work, we could tear it down and build it up in hours or days,” says McDonald. “The flexibility to build out dozens of servers rapidly was huge for us.”

Hess built half of the servers it needed for its production environment and then cloned the rest using code. Using this approach, Nimbo was able to build out a hundred servers in one day. “This would be unheard of in our on-premises environment,” McDonald says. “Building out 100 servers at a click of a button was just phenomenal.” Bell comments, “One of our core strengths at Nimbo is our DevOps practice. We’ve got some leaders who really thrive when they have a platform like AWS to leverage.”

By running on the AWS Cloud, Hess was able to install Microsoft Windows and SQL Server and build virtual appliances easily without a lengthy procurement and licensing process. “There are always challenges on this type of project,” remarks McDonald. “The AWS environment provides alternatives and several different ways to solve for any given problem. That flexibility was key in our success.”

“This project was about speed to market and we completed the migration to the AWS Cloud in six months,” says McDonald. “It would have taken at least twice as long using physical servers.”

Hess wanted to be able to transition the infrastructure to a new owner as seamlessly as possible without a lengthy support agreement. The company started using AWS as its production environment for Energy Marketing in January 2014 and transitioned the environment to the buyer in February.

To minimize security risk and access to the environment, Hess used an AWS Multi-Factor Authentication (MFA) device for authentication. The buyer set up an AWS account and after transferring credentials, Hess handed over the device. “The transition took place in a 30-minute meeting,” says McDonald. “It was incredibly simple.”

“Hess and Nimbo really leveraged AWS in one of the more unique use cases I’ve seen for cloud,” says Bell. “We handed the keys to the buyer through an orchestrated, yet simple process and business continued as expected. I’m thoroughly impressed with the thought leadership at Hess and AWS for allowing Nimbo to be a part of such a resounding cloud implementation.”

The success of the acquisition has raised visibility for cloud services at Hess. “The work we did demonstrated to the organization what was possible working with AWS,” says McDonald. “The impetus for this particular effort was provided by the divestiture — but now that we’ve gone through the process, we know what is possible with AWS Cloud. In the future, we will look to build cloud solutions as alternatives to our on-premises capabilities.”