The ultimate virtual office.
In the United Kingdom, the chief executive of a major company was having a big problem with his 150-foot yacht. It wasn't the construction, which was perfect. And it wasn't the crew - a highly trained staff of 18 was ready to execute his every command. The problem was that after spending tens of millions on his luxury vessel, he was too busy to enjoy it.
Since the executive in question happens to live during a miraculous time, when technology can twist long-held concepts of time and space, he simply asked Sean Farrell of Maritech Electronics in Stamford, CT, to install the latest satellite communications equipment. "Now he can do anything he wants on board," says Farrell. "Transfer data files, get on the Web, answer e-mail, watch TV - even have video conferences with his offices around the world, as close to full-motion video as you can get. And all at data speeds that were impossible just a year ago."
Today, it seems, there's no such thing as being too busy to get away. Why not run that department-head meeting from, say, Martinique?
"What's happening is unbelievable - everything in our business has changed dramatically in the last five years," says Farrell's competitor, Tom Lambert, who is general manager of Larry Smith Electronics in Riviera Beach, FL.
These changes affect the two most important people on the yacht - the CEO and the captain - in different ways. While the executive's primary concern is harnessing technology to stay in touch with the outside world - telephoning, e-mailing, faxing, watching TV - the captain's main interest is using the remarkable new navigational tools to make sure the boat safely goes where it's supposed to go.
All of which has helped fuel what has already become a booming market for yacht makers, thanks to the skyrocketing Dow. "If you came to us wanting a custom-built boat, there's a minimum of a three-year wait," says Thom Conboy, COO of Intermarine Savannah of Georgia, one of the world's top builders of large private yachts, who says orders for large custom-built boats in the three biggest markets - the United States, Italy, and Holland - has grown from 120 per year in the early '90s to about 200 today.
That may not sound like much until you consider that yachts over 100 feet long cost between $5 million and $18 million apiece. In other words, since the beginning of this decade, the industry has increased revenues by over a billion dollars a year.
Today's yachts are bigger than ever - a 120-foot boat used to be considered large, but now 150- to 200-foot vessels are not uncommon - and the owners are no longer strictly blue bloods but also the newest of the nouveau riche. Which means that today's successful businessperson is more likely to not only have a yacht, but to conduct business on it.
"In the last 10 years, people have realized how useful a toy it can be," says Conboy. "To have board meetings, do deals, entertain clients, and just get away from everybody. It's like going over to your house, but you can move it to St. Bart's."
But the sobering fact is that nobody's going to head off to the Caribbean for long if they're not reachable in times of crisis. So that CEO of the U.K. company, for example, had Farrell install two satellite terminals that enable dialups to each of his offices around the world. He now has full data and fax capability - as well as several voice terminals so he can be on the phone to four places at once - and video conferencing, for about $100,000.
There's no substitute for being able to look the other person in the eye, says Andy Gifford, a sales rep at Larry Smith Electronics. One of his international clients insists on video conferencing to help him determine if his business partners are telling the truth.
Since there are a dizzying array of high-tech products on the market, electronics dealers like Maritech and Larry Smith have stepped in to offer one-stop shopping for everything from Internet access to radar. They sit down with both the CEO and the captain to determine what's needed - to either upgrade a yacht's old technology or handle installations on a new boat - and make sure all the equipment works together seamlessly.
Since yachting remains the rather exclusive province of the super rich, there's not an enormous demand for these various gizmos and thus manufacturers tend to be niche players. There's the German company Anschutz, a division of Raytheon, which makes autopilot and gyrocompass equipment; the British firm Brooks & Gatehouse, a division of Yeoman Group, that sells instrument systems and software; and Northstar Technologies of Acton, MA, for global positioning systems.
The exception to this rule is the giant Raytheon (see sidebar), which responded to cutbacks in military contracts by developing markets such as commercial shipping and marine equipment. Raytheon offers satellite communications for the CEO and sonar and radar for the captain. Its "integrated bridge system" combines radar, autopilot, gyro, and plotting systems together to make the captain's navigational tasks much easier and safer.
Its main competitor is the smaller Japanese firm Furuno, which offers a similar range of products. It has come up with a single "black box," for example, that overlays charts with radar pictures so you can see ships or buoys exactly where they are positioned on a map.
One problem in trying to keep executives in touch has been keeping the boat's antennae still enough to lock on the satellite. A California company called Sea-Tel has solved that with its gyrostabilized antennae that can pull down the latest news from CNN for the executive from one satellite and color photos of weather systems for the captain from another, something not possible until recently.
Technology has also made yachting far safer. By streamlining and coordinating information, computers allow captains to stay on top of how well the vessel is functioning. "Until now, yachts have used mostly analog gauges that told you how much fuel you have, how much fresh water is in your system - just dozens of dials," says Farrell. "Now you can have one screen and just flip back and forth to the information. Plus, the computers will alert you when there are problems with the engine or any other function."
So now, even in the worst fog and rain, rescuers can find you. Even if all your electrical power fails, you can use an Emergency Position Indicating Radio Beacon (EPIRB), a hand-held battery-powered transmitter that sends two distress signals - one to a satellite that passes it along to a ground station and another that helps the search-and-rescue teams locate you. A new EPIRB by Marlborough, MA-based Northern Airborne Technologies, a subsidiary of the U.K.'s Cobham plc, refines this device even further by providing rescue teams with your exact latitude and longitude every 20 minutes, with help from global positioning satellites.
Some new products are even prepared to help in case of medical emergencies. Sea Med in California, for example, has set up a system whereby anyone on board with a heart condition can be examined via video conferencing with doctors at Cedars Sinai Medical Center. "That way a guest with a heart condition doesn't have to be concerned about taking a trip on your yacht," says Gifford.
The list of new gizmos you can bring on board is endless - from Furuno's new color LCD Sounder ($1,895) that lets you know when a big school of fish is approaching, to a hand-held device ($999) by Magellan Systems that lets you send and receive e-mail via satellite when you can't hook up your PC - and tells you when the next satellite is in range for transmissions. Raytheon's Nightsight Palm IR is expensive at $12,995, but the small unit that's about the size of a palmcorder allows you to see at night - a boat, a buoy, or a man overboard.
But in the final analysis, the biggest impact technology has had on yachting is to make it possible for the harried executive to get away, thanks to communications advances. If you're going to spend all that money for a yacht plus full-time cruise directors, helicopters, pilots, decompression chambers for scuba diving, even recording studios should a musical impulse strike as you bob across the Pacific, well, you might as well go the extra mile and add an office on board to salve your conscience about being away.
As Gifford puts it, "If you're spending $7.5 million on a yacht, it would be nice if you could use it more than once a year."
But whatever happened to rest and relaxation? Isn't that what yachts are supposed to give the stressed-out executive? "Hey, you don't have to use the equipment," says Maritech's Farrell. "But if something comes up - like the economic collapse of the Soviet Union - you're ready for it."
Why the Big Fish Bltes
Because yachting is a niche business, most marine electronics companies are quite small. There simply aren't that many people on the planet rich enough to afford a yacht, so an electronics firm can sell only so many navigation systems. So why does a giant corporation like Raytheon, with $20 billion in sales, even bother?
One reason is that Raytheon has considerable expertise in this area - the company actually started out in the marine business more than 50 years ago when it began mass producing technology used in radar systems during World War II. After that, Raytheon, went on to become one of the nation's biggest defense contractors. But when the Cold War ended and defense spending dropped, the company began searching for ways to adapt its military technology for commercial and recreational uses. That's when a booming economy triggered higher demand for marine electronics.
But Raytheon is after more than simply profits. "Marine electronics is one of the few commercial products consumers can buy with Raytheon's name on it," says Keith Wansley, product manager for the Raytheon Marine Co. "The same fat cats who are buying our equipment are also calling the shots in Washington - senators who buy military hardware like that latest Raytheon aircraft. So it's great advertising."
The Well-Dressed Yacht
Of course you want your captain to have the latest in geopositioning and gyrocompass equipment. But how about you? Here's what one interested party, Maritech's Sean Farrell, insists your office-at-sea can't be without:
* satellite antennae
* data, fax, and voice terminals
* multi-line phones
* video conferencing
* multisystem television
* dual power supply
* cellular and GSM phones (for Europe)
* security cameras
* computer network; flat screens; servers
It used to be that yacht builders had everything designed at the boatyard - from interior design to electronics. But today's digital technology allows them to outsource that work to subcontractors who can be located anywhere in the world and create the teakwood furniture and living areas, for example, on a computer using three-dimensional renderings. "We build the shell here and install the engine, the wiring, and plumbing," says Thom Conboy, chief operating officer of Intermarine Savannah, a custom yacht builder in Georgia. "Most of the rest is brought in from the outside."
What the yacht builders save by outsourcing isn't money; it's time. Technology has also shrunk considerably the size of the equipment brought in from outside, such as air conditioners and navigation equipment, so the yacht builders can squeeze many more gadgets into their crafts and still leave more room for those activities particularly near and dear to yachters - dining, sunbathing, and sipping martinis while watching the sun set over Morocco.
Where the Boats Are
Looking to ogle the biggest and best of yachting's new breed? Here's a selected schedule of some upcoming viewing ops:
Monaco Yacht Show
September 22-25, 1999; Port Hercule, Monaco. Yachts and super yachts in a watershow presented by international brokers and shipyards - as well as an exhibit hall displaying equipment and services.
Ft. Lauderdale International Boat Show
October 28-November 1, 1999; Bahia Mar Yachting Center. Close to 1,400 exhibitors present boats, yachts, and accessories from every major builder and manufacturer.
Miami Brokerage Yacht Show
February 17-21, 2000; Miami Beach. See the world's largest collection of pre-owned yacht's, displayed on the Indian Creek Waterway. New yachts, too.
The new Executive Park
If technologically "smart" buildings, the rise the road warrior, and the weed-like spread of workplace hoteling have changed the face - and function - of the office, then the smart yacht is bound to bring a sea change, too. And it's likely to be at the marina - home port for smart yachts - that this change is most evident. Reflecting on the developments that have made these boats as ready for prime time as the most sophisticated downtown high-rise or the most cleverly constructed campus, we envisioned something of a waterside office park, jumbo yachts parked cheek to jowl, executives in nautical attire rushing back and forth, lattes and laptops in hand.
But we are, apparently, slightly ahead of ourselves. A quick check of several of the nation's most prestigious marinas elicited little recognition of a trend in the making. "A number of the boats do have faxes," the dock master at Ft. Lauderdale's Bahia Mar told us. "But we rarely see evidence of meetings going on." His countepart at nearby Pier 66 allowed that she doesn't "know what people do aboard their yachts," but said she hadn't seen anyone in "suits in the marina." Boats berthing at Manhattan's North Cove Marina (above, right) are primarily "transients," said a spokeswoman, and, as far as she could tell, there weren't "any Wall Street CEOs working from their boats" there.
Maybe that's because, as Patta Sloan, marketing director for Intermarine Savannah, a Georgia-based yacht builder, suggests, not only are these yachts on the move, they're moving in packs. Come August, says Sloan, "all the boats are heading up to Nantucket. The amount of business being done on boats there is incredible." Then, she says, it's on to Ft. Lauderdale's boat show and Fisher's Island's Boys & Girls Club charity event.
After that, they may head back to any of a handful of jumbo-yachtable marinas that, we predict, will soon find themselves transformed from vacation spots to 24/7 office environments, capable of meeting any corporate need, any time any place anyhow. - M.W.
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|Title Annotation:||yachting; includes related articles on the yacht business|
|Publication:||Chief Executive (U.S.)|
|Date:||Aug 15, 1999|
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