White Paper: The Maritime Software Landscape 2018

The maritime industry is on the verge of a digital disruption. Digitalization is increasingly considered one of the key solutions to the many challenges the industry is facing as well as to opening up new business opportunities. The industry’s increased interest in digital solutions is reflected in the fast-growing number of software vendors entering the space. Already it is becoming difficult to navigate this “software jungle”. The purpose with this report is to provide an overview of the current software solutions available in the market, outline the major drivers and challenges for digitalization in the sector, and describe how KONGSBERG aims to accelerate the digital transformation in the industry.

Digitalization in the maritime industry

Historically, the maritime industry is in an intriguing position with many concurrent problems to be solved. Access to powerful tools helps the industry meet these challenges, and the market conditions do appear to be improving. However, there are still issues to resolve. They range from overcapacity, low margins, regulatory pressure, and lack of efficiency, to new digital demands from customers. Digitalization is increasingly considered one of the key answers to these challenges.

The perceived main benefits of digitalization include the following:

  • Reduced costs – Better use of data improves asset lifecycle optimization and operational excellence. It also enables value chain transformation.
  • Reduced risk – New technology reduces the risk to personnel and assets. Examples of this are the use of autonomy for hazard operations and moving offshore activities onshore.
  • Increased sustainability – Technology offers solutions to some of the large sustainability challenges the industry is facing, such as emissions and the transition away from fossil fuel.
  • New revenue opportunities – It is commonly accepted in the industry that, in time, the digital transformation will challenge the existing business models, and new business models and opportunities will emerge.

Today, basically all conferences dedicate a large portion of their program to topics like artificial intelligence, robotics, autonomy, blockchain, digital platforms, and big data. There is no shortage of people offering their perspective on the future of the maritime industry, but very few can tell us where to start the digital journey with any kind of certainty.

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The maritime software landscape 2018

Although the digital transformation of the maritime industry is still in its infancy, it’s already becoming difficult to navigate the fast-growing landscape of maritime software providers. Over 160 different vendors are currently offering various solutions to ship owners, charterers, operators, and other related industry stakeholders.

The market is characterized as a typical immature software market where vendors are delivering a wide range of applications. As the market matures, the vendors are expected to specialize more. Increased market maturity and innovative start-ups will also fuel a significant increase in the number of vendors over the next one to three years.

The figure below provides a full overview of the most significant players in the maritime software landscape, categorized according to the major Opex drivers in the industry.
Software categories:

  • Administration – Software that relates to administration, finance and reporting, document handling of certificates, logbooks, and classification documents.
  • Personnel – Software that provides solutions for crew management, training, and HSEQ.
  • Fuel and energy management – Software solutions that optimize a voyage from A to B by minimizing fuel costs and energy consumption. This includes voyage planning, fleet tracking, chart management, and vessel performance.
  • Maintenance and operations – Software that supports and automates vessel component monitoring, and plans port operations, dry docking, and supply chain optimization.
  • Other – Software solutions that relate to advanced analytics, chart management, communication management, community, app development, and commercial management.
  • Fleet management systems – Module-based platform software that offers support for multiple of the mentioned categories, for instance, administration, maintenance, operations, people, and HSEQ.

Key drivers for higher adoption of innovative software solutions

Although the software landscape is getting crowded, few of the vendors have been able to build significant scale with their offering. Hence, most of the vendors are still quite small in terms of revenue and number of customers. The maritime industry is known to be very conservative, and it could be years before we see mainstream adoption of new technology.

To get a better insight into the future adoption rate, it is critical to understand the underlying drivers for digitalization in the maritime industry:

  • High competition – In general, the industry is constantly faced by intense pressure to operate more efficiently due to the high competition in the market. In addition, the industry is becoming apprehensive of new entrants who may disrupt the market. Combined, this will fuel the adoption of software related to cost reductions and increased operational efficiency.
  • New regulations – The industry is faced with several new IMO regulations over the next five years, ranging from minor reporting requirements to fuel emissions and cybersecurity. For the industry, the potential combined impact of all of these regulations is significant, and it will accelerate the need for new technology and new ways of doing business.
  • New technology – Technology is developing at a staggering pace, and new technology opens up opportunities to solve existing and new challenges much more efficiently. The interest and willingness to invest in technology trends such as blockchain, artificial intelligence, and robotics is growing. Also, more and more companies are building in-house digital competence, for instance by establishing roles such as chief digital officers and data scientists. This will create an even stronger pull towards exploring the opportunities that lie within digitalization.

The key challenges for digitalization

So far, there are only a few early adopters of digitalization in the industry, mainly because the key challenges for digitalization are not being addressed. Once both the industry and the software vendors have fully understood and addressed these challenges, a major transformation is likely to happen in the following one to three years. This transformation will be accelerated by the strong underlying drivers combined with the substantial perceived benefits of digitalization in the industry.

Key challenges:

  • Lack of a solid ROI on digitalization initiatives – The biggest challenge for wider adoption of digital solutions is the vendors’ current inability to provide a significant ROI. The solutions most maritime software vendors’ offer require “connected ships” to provide any significant value. A significant subset of the vendor solutions also requires various sensors to be installed onboard the vessels. Both of these requirements come with a high cost frequently outweighing the benefits of a single standalone software solution. Only if multiple vendors start using the same data infrastructure will the customers get a solid ROI on their digitalization initiatives.
  • Data quality – At the very heart of digitalization lies data. Better use of data can unlock tremendous potential in asset lifecycle optimization and operational efficiency, both internally within a company and across entire supply chains. The concept of data being a valuable asset is widely accepted, but most companies underestimate the complexity inherent in data quality. Only data that is unified, structured and actionable has any sort of value, and this rarely comes “out-of-the-box.”
  • Cybersecurity – Cybersecurity is becoming a hot topic in the industry, and for a good reason. The rapidly growing number of “connected ships” is increasingly exposing the industry to cyber threats that could have a devastating impact on its credibility. Collaboration, standardization, and regulations are needed to address this growing challenge fully.

Neither a single industry player nor a software vendor can solve all of these challenges by themselves. This calls for collaboration among the industry players and the software providers.

The Kognifai vision – an open digital ecosystem for the maritime industry

KONGSBERG’s ambition is to be a driving force in transforming the maritime industry towards the Maritime 4.0 vision. To this end, we have developed Kognifai, and open digital ecosystem, to address the challenges preventing the industry from accelerating its digital transformation.

Kognifai enables customers to cost-efficiently capture and aggregate quality data from their assets, and securely transfer it to the cloud using the Kognifai infrastructure. Through the Kognifai Marketplace, customers have a large range of leading applications and services that can turn their data into business value - ranging all the way from advanced vessel performance to basic administrative tools. KONGSBERG has launched an extensive partner program to ensure the leading software applications are made available in the marketplace.

As it is an open ecosystem, Kognifai also enables customers to seamlessly integrate with their supply partners and cost-efficiently test out new ideas, and new operating and business models. In turn, this helps the maritime industry prepare for the future.

Contact us

At Kongsberg Digital, we believe in future growth and success for the maritime industry, and we are convinced this is best achieved through collaboration.

Do you want to learn more about how Kognifai can help your business take advantage of digital transformation? Or would you like to learn more about becoming a Kognifai partner? Contact us! 

Kongsberg Digital

kognifai@kongsberg.com

Tel: +47 32 28 82 00