Shoultz: ‘Software as a service’ refines marine solution provider roleJan 22, 2016 02:00 PM
Marine solutions providers are vital to maritime operators. They provide the technical expertise and assistance that vessel owners need to meet their business goals. Today’s marine solutions providers are more than just resellers of software solutions. They are the trusted partners that drive innovation and move the operator forward, leveraging the advantages of a cloud and mobile world.
Current marine “software as a service” (SaaS) providers are reinventing the marine business model. SaaS applications, which are delivered as an Internet service, provide several distinct advantages for maritime software developers. Those advantages are threefold:
1) The ability to provide the marine operator with higher-level business services, focusing exclusively on improving the customer’s business processes, rather than low-level technology infrastructure services.
2) The means to offer marine industry solutions to a national or global base of clients, rather than generic horizontal solutions to a local-only maritime customer base.
3) The creation of repeatable software solutions that can be leveraged across numerous marine operators.
The SaaS model allows solution providers to assert their maritime industry expertise and embed this intellectual capital — marine industry best practices — in accessible software. Marine industry best practices are reflected as seamless customizations and extensions to the enterprise business management applications. Solution providers can then provide those customizations and extensions in the form of marine industry best practice software templates to other maritime-related clients supporting the waterborne industry, effectively delivering their “service as software” (SaS).
Marine ‘service as software’ advantage
Marine solution providers who develop maritime industry best practices become trusted business advisers rather than technology advisers. Those who memorialize their intellectual capital in software and deliver their SaS in a repeatable fashion are able to support the marine client’s growth more quickly instead of pursuing a traditional services delivery model.
Over the past 20 years, the role of marine solution providers has been changing, and so too has the terminology to describe them. Historically, marine solution providers were called value-added resellers (VARs) because, as the name suggests, they were reselling product — usually someone else’s. Today, these same firms are delivering information technology (IT) solutions (the combination of IT products and IT services) and thus are called “solution providers.”
With the advent of the marine SaaS model, where software is delivered over the web to waterborne vessels and shoreside facilities as a service — rather than a product — there is another transition afoot. This transition doesn’t necessitate a change in the nomenclature by which we describe marine solution providers, but it is changing the definition of what a “solution” is. In a marine SaaS world, the “solutions” that solution providers offer are comprehensive, highly specific, value-added applications delivered nationally or even globally.
The SaaS transition for marine solution providers
From IT technician to trusted business adviser, the marine solution provider has a new role. There’s no hardware and infrastructure software to procure, install and configure. There’s no installing updates and upgrades to any of the hardware, infrastructure software or the applications themselves. The marine SaaS provider takes care of the entire infrastructure and rolls out the updates and upgrades to the applications. Often that is facilitated from public clouds, like Amazon Web Services (AWS) or Windows Azure, and delivered via a web application or an app for smartphones.
The new model allows the marine solution provider to focus exclusively on higher-value business-critical activities for the client. They may include changing and improving the client’s business processes, charting those processes to a marine-specific business management application or configuring and customizing the application accordingly. As a result, marine solution providers become increasingly trusted business advisers.
Expanding horizons: From local support to vertical expert
In yesterday’s model of selling applications for deployment on premises, the marine solution provider rarely built up a marine industry expertise because it is rare to find a critical mass of marine customers that are localized. The on-demand model now allows these marine solution providers to focus on industry-specific solutions, as now they can just as easily service a marine client remotely — nationally or globally — as they can a client locally.
Because there is no physical delivery of technology, unlike yesterday’s on-premises marine model, there is no need for the marine solution provider to be physically present to implement an on-demand application. Freed from geographical constraints, the marine solution provider can focus on delivering innovative features.
Inventing marine service as software
By memorializing the marine industry expertise gained over time into a cloud or mobile application, the marine solution provider frees himself from the confines of working with a small client base and delivers that expertise and experience to the world. The wisdom embodied in that application is now economically accessible to marine operators of all sizes, and across geographical boundaries.
Further, more companies can now access and afford these solutions. Previously, software installations were costly, primarily due to travel, the need for new hardware and also with how the solution provider derived their revenue. The installation typically required a big capital expenditure upfront and generally included additional costs for customization, training and support. This put sophisticated solutions out of the economical reach of many smaller operators. The new model makes these same solutions available to operators of all sizes — without the huge upfront investments. This is proving to be a true game changer, and also an equalizer between the large and small operators.
The marine SaaS advantage
The intellectual capital of the marine solutions provider is converted to repeatable marine industry best practices — encapsulated in cloud or mobile-based software.
Customizations are persistent and generic to the industry. They have long and useful life cycles, unlike those for marine on-premises software. Thus, the investment in time to create them pays off; marine customers receive better-developed and better-tested solutions that have a longer lifespan.
Customizations are reusable: the value-added application or functions created for one maritime customer is likely to be of use to another. Marine providers can attract new non-vessel-operator clients (e.g. terminals, agents and shippers) and leverage their prior development efforts over a broad range of marine clients.
Behind the theory
Marine solutions providers aren’t just entering the maritime software development business. Instead, they are digitizing their expertise, providing that expertise to more customers and providing a platform to quickly deliver new features to those customers. As they innovate and learn — or as industry regulations change, such as with Subchapter M — those changes can be immediately reflected in their offering. The embodiment of marine services in repeatable, distributed and value-added functionality can only be successful under certain conditions. There are several criteria that must be sought for success:
1) The core marine enterprise application has to be easily extensible, with exposed interfaces, such as a RESTFul API.
2) The marine application should have widespread acceptance and a critical user base to best leverage the marine solution provider’s investment in adding functionality to it.
3) The toolkit provided for extending the application to meet the unique needs of specific customers should be stocked with tools, documentation, and access to support when needed.
4) A dependable marine test-bed must be available for trial runs, troubleshooting and integration checking.
5) Access to the remote marine application is required, as a marine solution provider should not have to invest in a hardware and software infrastructure to succeed in the move from software to a service.
6) The marine SaaS application architecture has to provide a layer of abstraction between the core marine application and the marine customizations the solution provider has created for the customer. This insures that those customizations will automatically carry forward to the next version of the marine application without intervention on the part of the solution provider.
Benefits of marine service as software
Both marine clients and the marine solution providers that support them benefit from SaS, and the ability for solution providers to embed their intellectual capital in marine software customizations.
Maritime customers win in this model for several reasons:
- Marine operators want to work with marine suppliers who understand the marine business, speak the marine language and who will sell them marine business solutions, not just products.
- Marine operators want to standardize marine business processes based on marine industry best practices.
- Marine operators want accelerated time to market.
- Marine operators want low-cost process implementations.
- Marine operators want references from other marine companies who have experience with the marine service provider’s delivery capabilities.
Marine operators win in this model
Marine software “verticalization” creates competitive advantage as opposed to the horizontal competition of “all marine solution providers look alike.”
Marine customers know others in the marine industry and provide ongoing referrals. The marine solution provider’s marketing experience increases from word-of-mouth “advertising,” creating a confidence level between the marine customer and marine solution provider.
Time to market for the marine service provider is accelerated due to far less discovery and far fewer custom demos.
Lower cost to the marine operator results from repeatable implementations practiced by the marine service provider.
The software as a service model gives marine solution providers the ability to move further up the value curve, offering their industry expertise via cloud services and mobile devices, delivered in a more affordable and easier accessed manner. Their offering becomes more intertwined with and important to the business model of the customer, providing a win/win scenario, and making their relationship with the customer more strategic.
With this new business model, and the vast span of the software as a service infrastructure, marine solution providers can target other niche maritime clients who need the same solutions and expertise. Today’s marine solution providers’ newfound scope can be far-reaching as they can service customers far beyond their locale, with web-enabled support for a worldwide franchise of value.
Dean Shoultz is chief technology officer at Marine CFO in Houma, La. For more information, visit MarineCFO.com.