Microsoft (NASDAQ: MSFT) and Halliburton (NYSE: HAL) entered a strategic alliance to drive digital transformation across the oil and gas industry, the companies said in a joint press release on Aug. 22.

The relationship will combine the expertise of Microsoft in cloud and digital transformation with Halliburton's E&P science, software and services technology, according to the release.

As part of the partnership, researchers and engineers from both companies will leverage and optimize Microsoft technologies in machine learning, augmented reality (AR), user interactions and Industrial Internet of Things (IoT), as well as Microsoft Azure's high-performant infrastructure and built-in computing capabilities to deliver tightly integrated solutions across the energy value chain.

Areas of collaboration include: applying deep learning to reservoir characterization, modeling and simulation, building domain-specific visualization for mixed reality, creating highly interactive applications and fueling the digitalization of E&P assets.

As a first step in the alliance, Halliburton has made DecisionSpace 365 available on Azure, enabling real-time data streaming from IoT edge devices in oil fields and the ability to apply deep-learning models to optimize drilling and production to lower costs for customers. With the power of DecisionSpace on Azure, big compute and predictive deep-learning algorithms will help optimize field assets and enable next-generation exploration and deep-earth models by using software to fill gaps in sensor data, while reducing the number of steps and time required to render models, the release said.

The breadth and depth of this collaboration will allow the companies to apply voice and image recognition, video processing and AR/Virtual Reality to create a digital representation of a physical asset using Microsoft’s HoloLens and Surface devices. Additionally, the companies will utilize digital representation for oil wells and pumps at the IoT edge using the Landmark Field Appliance and Azure Stack.

Microsoft Azure will also become Halliburton’s preferred public cloud provider for iEnergy, the oil and gas industry’s first global E&P cloud linking the oil field to the office.

Nagaraj Srinivasan, senior vice president of Landmark and Halliburton Digital Solutions, said in a statement that Halliburton is at the forefront of the digital transformation occurring in the E&P industry and that “open architecture and community-based innovation are necessary to drive this fundamental change."

“Halliburton is focused on delivering intelligent cloud solutions to drive the next generation of efficient oil and gas exploration and production,” Jason Zander, corporate vice president of Microsoft Azure, said in a statement. "We are excited to bring the power of Azure’s hyperscale, hybrid and global cloud platform technologies to this alliance to enhance the value chain for our mutual customers."