Cloud services are dominating the workspace. The average business uses 1,427 cloud services, ranging from Dropbox to Google Cloud to Amazon Web Services. These enterprise cloud services account for 71.3% of the total services in use by the average organization. It is the norm for most businesses. Bottom line: the cloud isn't going anywhere anytime soon. It is essential to the modern, well-run business operation. We’re all regularly using cloud services.
“The average business uses 1,427 cloud services.”
The benefits are so overwhelming that cloud services are offered on a global scale by some of the top tech companies in the world; perhaps you’ve heard of them - Amazon (AWS), Microsoft, and Google. Amazon Web Services (our cloud provider) is looking at a $10 billion-a-year business, making it Amazon’s most profitable segment.
Other industries, including and especially shipping, now have the opportunity to optimize their operations and capitalize on one of the newer waves of technology. Logistics and maritime technology are rapidly evolving and improving. More port terminals should be utilizing the cloud to improve internal software and overall customer satisfaction.
We’ve found that cloud services are highly underutilized in the shipping and logistics industry. It's part of the reason why we chose to develop modern solutions for the industry and help lead the shift to cloud-based solutions.
In just a few years, we expect to see extremely limited, if any, relevance of on-premise servers.
Here are a few reasons the shipping industry needs to consider moving to the cloud:
The Internet has Permeated the Globe
We are more connected than ever before. Internet access and availability are increasing rapidly around the world. Inversely, the cost of internet access dramatically decreases every year. More terminals are coming online and “last mile connectivity” is no longer a problem. Where there is affordable and stable internet, there’s easy access to the cloud and cloud-based applications.
According to Facebook’s annual State of Connectivity report, the amount of people using the internet increased from 2.9B in 2014 to 3.2B in 2015. The share of the population covered by mobile broadband networks is up 5 points - from 73% to 78%.
The International Telecommunications Union (ITU), the UN’s specialized technology agency, reports that 2G internet connections cover 95% of the globe’s population. It won’t be long before we can say the same about 3G. The internet is now a commodity - just like any other easily accessible resource.
Even the most rural areas are seeing dramatic shifts to higher 3G speeds. Access is not moving at a linear rate like we naturally assume. In 2011, the ITU estimated that 3G population coverage was 45%. In 2015, this figure advanced to an impressive 69%.
Where there is internet, there is the cloud.
The Cloud is Scalable & Can Better Meet Your Needs
A decent financial advisor would never recommend that their client invest in a negatively performing portfolio. In the same way, a terminal solutions provider should not recommend that you “invest” in physical IT hardware and infrastructure that has technical limitations. (ex. storage capacity, processing speed). That is the definition of unscalable - especially if you anticipate growth in your terminal businesses over the course of the next few years. The second an investment is made in on-premise infrastructure is the second the clock begins ticking.
Sadly, this is also the case for investing in non-cloud software that the terminal world is accustomed to. The $1MM USD spent on a specific version of software ought to be carefully scrutinized especially as to the length of its relevancy with the onset of the cloud computing era. In the case of public companies providing software, there’s also an incentive to upsell consulting services, modules, and a brand new version of the software in just a few years.
The ideal scenario for the buyer is to have software that can evolve and grow with your operations and business. It should take into account where your operations stand today, as well as 3, 5, 10+ years from now. Terminal expansion, new berth areas and yard, new features and function, and updates can easily be added and improved on an ongoing basis. This beautiful scenario exists and it’s known as Software-as-a-Service (SaaS).
In a SaaS model, the software is not purchased but licensed on a subscription basis. The software provider handles all aspects of the service for you. Throughout the term of the agreement, it’s the provider that supplies:
- Infrastructure and hardware to run the software (AWS)
- Customer success team to ensure proper implementation, training, and onboarding
- Customer service team to quickly resolve any technical issues
- IT team to maintain and update the software
- Development team to quickly build and deploy custom features
Cloud-based products allow your software provider to add servers in seconds, literally with the click of a button. When terminal throughput increases, no additional investment in servers is necessary. Octopi, for example, can add or subtract the infrastructure you require depending on how much data your terminal uses. Clients can manage and view multiple port terminal KPIs at the same time, without capital expenditures or redundant investments in IT infrastructure.
The Cloud is Secure
Your data is much safer with large cloud providers than at your own terminal. Cloud facilities maintain the strictest levels of cybersecurity and physical security and invest millions in their server farms.
It is incredibly difficult to create a fault-tolerant, high-security facility at a port terminal. This function is better left to industry giants whose core business is handling the construction and maintenance of such facilities. Port terminals should focus on their core business, not on building a facility that is already in place.
These “server farms” are military-grade facilities located inland in the United States and around the world. They require physical security clearances and are monitored around the clock via CCTV and other precautionary measures. It’s much easier for thieves or even internal employees to break into your data rooms and compromise customer data.
Most ports are subject to certain natural disasters, such as hurricanes, typhoons, tsunamis, and flooding, which can knock out all data and connectivity. The cloud does not run this risk. Our application and data are operating and backed up with AWS in Virginia and California. Octopi is fault-tolerant, which means if one system goes down, there is another running in tandem that will step up to take its place, without any downtime for our customers. Physical servers and legacy systems simply cannot offer that type of stability.
A prime example occurred earlier this year when Category 5 Hurricane Matthew devastated the island of Haiti. Octopi never went down, even during the intense storm when other servers were knocked out at the terminal for a week. At 07:00 hours the next morning, relief containers were flowing through the system as if nothing had happened.
If a terminal server is compromised, the terminal will often need to find out what caused the breach, create a patch or fix the breach, reach out to IT teams and all clients, coordinate communication and send the patch fix or update, work with IT team to install the fix, troubleshoot, test, and deploy the fix. With cloud SaaS, the provider handles everything, saving your terminal time and money.
It’s time for terminals to think outside of the on-premise box. We believe that the investment and overhead costs for having a physical server at the terminal are unsustainable and not in-line with terminal needs.
The cloud is the future for all software solutions. The shipping industry is especially in a unique position to leverage this technological wave as it is just hitting ports now. Port leadership must think towards the future, not the past. It is the modern solution that lends itself to long-term, operational success.
If you have any questions, care to learn more about the cloud, or want more information on how Octopi’s cloud-based terminal operation system, feel free to contact us today.