Despite representing just 1% of operating costs, connectivity is the gateway to shipping’s future. It is the answer. But what’s the question?
The HitchHiker’s Guide To The Galaxy describes how a race of hyper-intelligent, pan-dimensional beings build a supercomputer called Deep Thought which runs a 7.5 million year program to come up with the answer to life, the universe and everything. Eventually it tells them that the answer is 42. When its creators rail at Deep Thought that the answer is meaningless, it responds that the answer is only meaningless because the beings that programmed it never actually understood the question.
Maritime had its own Deep Thought moment last month. As part of its ongoing 150 year program, DNV GL chose Posidonia to give us the answer to shipping’s future. And it’s connectivity.
The Future of Shipping report is important, timely and valuable and I urge you to read it—you’ll find it echoes an awful lot of what you’ll find in Futurenautics every quarter—but the upshot is, connectivity is the one crucial element that is going to provide the gateway to every improvement from operational efficiency and safety right the way to the autonomous or unmanned ship. Which is kind of ironic when you consider that until now connectivity, far from being front of mind for ship operators, has been hovering somewhere around mid-calf. If you’re lucky.
Evidence of this—were it needed—came from research undertaken by InterManager and network operator Inmarsat in 2013 in an effort to try and quantify the return on investment of fitting broadband on vessels. Having crunched through a considerable amount of data the research found that communications represented around 1% of the operating expenditure for the average ship operator. According to Inmarsat that translates to the average merchant ship in its portfolio spending US$50 per day.
It is against this backdrop that maritime satellite communications is entering what many are calling a new era. High Throughput Satellites are creating a buzz everywhere, with talk of speeds up to 50Mbps, ‘fibre-like’ connections, and much more bandwidth for your buck. But even as the first dedicated maritime HTS service—Inmarsat’s Global Xpress—successfully entered partial service last month, the response from most ship operators has been at best lukewarm.
At the SingTel ship efficiency roundtable at the end of 2013 a range of senior ship operators were asked about new technology and connectivity. The unanimous response was that they aren’t even using the technology they’ve got now to anywhere near its full potential. Communications technology is something you adopt late, when the costs have come down and when someone else has gone out and discovered what’s wrong with it first. “I don’t like it,” said one, “but I’m going to have it.”
So on the one hand we have connectivity providers making investments in the billions of dollars in order to deliver the door to shipping’s future, and on the other ship operators who haven’t yet learnt how to work the handle. Of course it’s a good deal more nuanced than that and to appreciate why, it’s important to understand how we got here.
How did we get here?
A potted history of maritime satellite communications goes like this: Inmarsat; VSAT. Yes it’s an oversimplification but not by much. Inmarsat was formed to supply GMDSS communications under a regulatory mandate which was focussed solely upon the safety of seafarers and their ships at sea. That mandate grew into a monopoly position in the maritime satellite communications market which was only challenged, comparatively recently, by the advent of TDMA (Time Division Multiple Access) VSAT networks.
For the first 30 years of the maritime satellite industry all the technology innovations we saw were designed to figure out how not to use the service – Jim Dodez, KVH.
Maritime satcoms was difficult and expensive and, worst of all, mandatory. Little wonder then in an environment where there was no choice, and a regulatory requirement to carry it, price became the key and overriding factor. Everything which could be done to hold down costs, was done. Jim Dodez, Senior VP of Marketing & Strategic Planning at KVH Industries puts it best. “For the first 30 years of the maritime satellite industry all the technology innovations we saw were designed to figure out how not to use the service.”
But then maritime suddenly got choice, and encouraged by multiple projections by numerous researchers about the size and value of the maritime market, new suppliers piled in to get their share. Using virtual network operator platforms and bundling together modems, antenna, hardware and space segment, companies with no experience of, or in some cases particular interest in, shipping were able to get offerings out into the market. Nothing wrong with that per se, but lack of maritime domain knowledge led to other things, which were wrong.
“We put one particular supplier on board and we asked them to walk the talk. And they failed. They failed miserably. They told us we’d have a broadband, and we said fine, excellent! So we put this on board, our guys started using it, and it failed, chock-blocked,” explains Captain Kuba Szymanski, Secretary-General of InterManager. “Then the suppliers came and said, ‘yeah but you didn’t tell us you want this capacity, you have to buy this. Well that’s $15,000 a month’. This is not what we were prepared for. And immediately we could see that our expectations were false, and they could not deliver.”
The Apple iOS and Android war has divided brother from brother, but it’s nothing compared to the fratricidal spleen vented about the relative merits of Inmarsat and VSAT.
“The problem maritime VSAT faced at the outset was twofold: at the supply side you had some cowboys in for a quick win who sold consumer grade solutions at high end prices, while at the demand side you faced people who did not really understand IP—and VSAT is an IP product,” says Filip Vanheer, Global Business Development Manager Maritime Satellite Solutions for Orange Business Services.”There was overpromising and underachieving, customer expectations weren’t met at all resulting in a lot of frustration on both sides, including for the serious VSAT providers, because they were tarred with the same brush. On top of that the services offered could be significantly different, revolutionary in maritime satcom used to the closed Inmarsat world.”
A brief review of the maritime satcoms supplier market would tend to support that view. At the time of writing there are more than 250 different suppliers in the market all offering dedicated maritime connectivity packages. But most of these suppliers are actually resellers, more than 90 of VSAT, and others of both Inmarsat and VSAT systems.
There are only a finite number of birds up there, and despite the rapid expansion of the services available, there are still only a handful of companies offering maritime satcom solutions which actually own the satellite which is at the core of the equation. So when we talk about ship operators having choice, the reality is that they have lots of choice when it comes to suppliers, but nowhere near that level of choice when it comes to the network. The bottom line is that most services will use either Inmarsat, Intelsat or Iridium, and in broadly that order. But does that matter? And will the wave of HTS entering the market alter it in the revolutionary manner that some are predicting? For a start, what exactly is HTS?
What is HTS?
Northern Sky Research (NSR) coined the term and define it as a satellite or satellite payload that has at least twice the throughput of a traditional FSS satellite for the same amount of allocated frequency on orbit, can use any frequency and almost exclusively makes use of frequency reuse and multiple spot beams to increase throughput and reduce the price per bit delivered. These services include Inmarsat’s Global Xpress, Intelsat’s EPIC, Telenor’s THOR 7, and the new O3b solution.
“New HTS services are a good thing for the maritime world as they will drive competition, but their capabilities are available already,” says Tore Morten Olsen, Head of Maritime Satellite Communications in Airbus Defence and Space, one of the largest maritime satellite communications suppliers. “For instance, we can provide global connectivity with VSAT bandwidth that offers 12mb/s data upload. But should a customer want to move to HTS in the future, it’s easy because AuroraGlobal services are designed to be technology agnostic.”
And ‘technology-agnostic’ is a key phrase when it comes to maritime satcom connectivity, both now and in the future. The war between Apple’s iOS and Android on mobile phones has divided brother from brother, but it’s nothing compared to the fratricidal spleen vented about the relative merits of Inmarsat and VSAT. In fact the war of words which continues to rage around the topic has been intensified by the next-generation HTS services coming online.
All HTS services conform to the given NSR definition, but over and above that they diverge considerably. Firstly, in terms of the bands they use. The suitability and robustness of Ka- versus Ku-band is not a technical discussion for these pages, suffice to say that it’s unlikely any operator investing billions into a service isn’t going to be pretty confident that modulation techniques and hybrid network designs are going to mitigate those impacts to a suitable degree. The real meat is what are referred to as ‘open’ versus ‘closed’ architectures, put simply the VSAT model as opposed to the Inmarsat one. Intelsat’s EPIC platform is the former where service providers control system elements and therefore can incorporate high-throughput capacity without having to replace existing network hardware.
“This means maritime users will see improvements in throughput and cost-per-bit while leveraging their current network investments. This leads to lower total cost of ownership for the end user,” says James Collett, Director of Mobility Services for Intelsat. “Open architecture puts choice and control into the hands of the users. The communication demands placed on modern vessels will continue to grow, and as fleet operators scale up their communications networks, we believe the advantages of an open-architecture approach will become even more apparent.”
Open v. closed
In the context of cloud and increasing digitisation, an open approach would appear to be absolutely correct, but does the failure of VSAT to meet the expectations of a significant number of ship operators suggest otherwise?
Many struggled to understand the service offerings and various service element providers, and the patchwork nature of the bundled solutions were often responsible.
It’s no accident that the most successful VSAT provider by market share—KVH Industries—took a different route. Unlike its VSAT competitors KVH focussed on delivering what was essentially an Inmarsat model for VSAT, and it’s proved an extremely smart move.
“We had a great opportunity to get into the marketplace back in 2007, because although Inmarsat is a great company with great solutions, it was a monopoly and most people were complaining about the price,” says KVH’s Jim Dodez. “We wanted to create a simple, affordable, end-to-end VSAT solution that was simple for dealers to install and we had a distribution network to take advantage of, just like Inmarsat.”
KVH, like Airbus Defence and Space is technology-agnostic, “we’re talking to HTS providers and we will take advantage of whatever bandwidth is out there, whether it comes from Google or whoever, we will design the capability in our systems,” says Dodez. But KVH maintain that in terms of innovation, the closed architectures of its and Inmarsat’s offering have the capacity to be far more innovative.
“People who object to the end-to-end closed system are the people doing the modular architecture. In the VNO (Virtual Network Operator) model, Intelsat does most of customer management and technical management of their network, and allows Service Providers to tap in and use it. As a Service Provider it means you don’t get an opportunity to engage your customer and develop solutions to their problems which offer something different in the market. A lot of the noise on this is coming from those who don’t have the ability to do end-to-end, and so they paint it as bad.”
They need a satcoms supplier that takes care of the technology, packages the best of what’s available in a smart and easy to operate way, ensures seamless usage and offers that package at an affordable rate. Much like how we all use our mobile phones in fact – Tore Morten Olsen, Airbus DS
It’s an interesting point, particularly when you look at the nature of the new offerings from both Inmarsat and KVH. Global Xpress will offer each ship its own CISCO server linked to cloud computing and what Inmarsat describes as a ‘state-of-the-art’ satellite applications Service Enablement Platform.
The GX SEP will allow the application itself to dynamically request additional bandwidth just for the period of time its needed, before returning to normal levels. This could be a game-changer for operators who have shied away from data-heavy services because of the need to upgrade their subscriptions to have capacity on standby.
But what it really indicates is that Inmarsat is recognising that just supplying connectivity isn’t enough. Connectivity is the gateway, but, as Shane Rossbacher, Director of Maritime Market Development at Inmarsat says, “Inmarsat’s future strategy is to offer services beyond pure satellite connectivity. Our task is to deliver solutions that help improve our customers’ business, driving operational efficiencies between shore and ship.”
Applications at the heart
That’s why applications are at the heart of GX, and also why they’re the backbone of KVH’s new IP Mobilecast product. Using multicast technology and bandwidth management KVH are enabling application providers to deliver new types of services to users, which cost barely, if anything, in bandwidth. “The trend towards applications is a good one and, yes, the IP Mobilecast concept is basically similar to the SEP,” says Dodez. “We’re having ongoing conversations with all the leading applications providers in the industry, those conversations are definitely happening.”
It’s a vision of the future where the cat-fight between Inmarsat and VSAT should melt into the background—particularly considering that GX is actually a VSAT service. The focus on applications speaks to a wider trend in technology to reduce complexity for the user, and it’s one which Airbus’ Olsen is well aware of.
“I think, yes, the level of knowledge of what the market offers today is pretty good. I don’t mean to say that most vessel operators need an in-depth understanding of the scientific intricacies of satellite communications. But I believe this is not necessary, either. Shipowners shouldn’t need to worry about all the technical details and challenges. They need a satcoms supplier that takes care of the technology, packages the best of what’s available in a smart and easy to operate way, ensures seamless usage and offers that package at an affordable rate. Much like how we all use our mobile phones in fact.”
Sit back, relax and enjoy?
“The introduction of new HTS bandwidth will benefit those in market sectors for whom such solutions are relevant,” says Mary Ellen Kramer, CEO of Maritime Broadband. “Commercial shipping with truly global and relatively low bandwidth communications requirements is not likely to be impacted.” Rashid Baba, Director of Products at Thuraya takes a similar view. “For Thuraya, the opportunity lies in providing a better standard experience than is currently available to customers for whom an investment in VSAT or future HTS services is beyond their budget or requirement. Those owners want the kind of reliable communications that we can provide together with added value applications from its partners.”
Between Airbus Defence and Space’s AuroraGlobal Network, Inmarsat’s SEP, and KVH’s Mobilecast it seems that the message from every part of the maritime satellite communications ecosystem is—as was written in large, friendly letters on the front of the HitchHikers Guide to the Galaxy—Don’t Panic. Well, it’s the wrong one, and here’s why. Connectivity is going to enable just about everything your shipping company wants to do in the future and to continue in the comparative ignorance of its technology in which most operators currently dwell, is untenable and dangerous. HTS is going to change what’s possible and it is essential ship operators take advantage of it sooner rather than later. In short, HTS should have ‘Panic Now’ written in large unfriendly letters up and down both sides and across the front for good measure.
“In this age of big data it is not about optimising the connectivity to the vessel so much as a focus on implementing applications that utilize the connectivity to optimise business operations. Far too often ship operators look to purchase a communications platform and then figure out what to do with it,” says Brian Pemberton, Executive Director for Iridium’s Maritime Business. “This has grown out of the service provider distribution model for communications where they would sell marked up airtime, and it was up to the ship operator to figure out what to use the service for. With broadband connectivity now available to nearly all ship operators, it is more about identifying which applications are going to improve business operations and the purchase of those applications will include the communications technology and charges as a bundled package.”
He’s absolutely right. And that’s why HTS should be the shove ship operators need to fully engage with connectivity. “It has always been our ambition to offer the same kind of solutions to our customers, irrelevant of the fact if the connection they are using is DSL, fibre, satellite or whatever. HTS brings this ambition closer,” says Orange’s Vanheer. “For some applications, due to their bandwidth consumption, it makes no economic sense. HTS will change that. HTS will allow us to bring our complete portfolio of solutions to the vessels, at a reasonable cost.” It is a step change, and in order to take advantage of it ship operators have to take some responsibility. Relying on the maritime satcom providers to do the work for us isn’t viable in the long term.
Time to engage
Ship operators have to engage with connectivity on an enterprise level, and focus their talent to do so. Bandwidth is never going to be the commodity service at sea that everybody hopes it will. The amount of data that ship operators are going to start sending is going to overwhelm the capacity of networks to carry it very quickly.
Yet in many shipping IT departments there’s still a belief that making a satellite operator guarantee a specified data rate and SLA, and optimising and controlling the flow of data down the pipe is going to solve that problem. It’s a view which is increasingly naive.
The only way shipping can truly capitalise on this step change is by understanding its own requirements for data and the how much capacity it needs in order to adequately deliver its effective transport. This is the data which will build completely different organisations, will allow closer integration between charterers and operators, allow ship managers to demonstrate their value to ship owners and drive savings and productivity. We can’t any longer leave all that prize in the hands of the maritime satcoms suppliers to deliver to us. We have to take it.
Eyes on the prize
The idea of connectivity nicely bundled and delivered to us in a beautiful and intuitive interface is very attractive, and if you want an example of just how powerful a proposition that is, then take a look at Apple and how incredibly successful its closed architecture has been. But that model has limitations, as the deal between Apple and IBM this month illustrates.
Closed architectures in a competitive market work well in the first phase as audiences get used to a new technology, but as soon as the customers become familiar with the technology and gain confidence they begin to look for their own solution. Apple’s deal with IBM allows them to extend their reach beyond the maximum potential of their closed business model.
Of course, that’s only happened in a mature market. In maritime connectivity we’re far from that point, so the likelihood is that closed architecture has a good deal of mileage in it yet. But in the long term open architectures should become the norm—and if they don’t then we will have failed as an industry.
A mindset change
Things are changing and according to Frank Coles of Inmarsat, “This will demand a change in mind-set for shipowners, who tend to fight every communications penny without considering the value to be gained.” And in the end that’s what this comes down to. Value creation. In a word, business. But not just any business. Your business.
The number 42 is 101010 in binary code. It is the average number of lines on an average page of an average paperback, and it is the number of laws in cricket. Light requires 10 to the power of 42 seconds to cross the diameter of a proton and 42 is the number of degrees by which light refracts off water to create a rainbow. It is also, of course, the answer to life, the universe and everything.
42 is the answer to an awful lot of different questions, but not shipping’s future. That’s connectivity, and the questions it answers are different for every ship operator. It’s like Jeopardy!, only more so.
Jeopardy. Now there’s a word.