Not everyone in this world is comfortable being held to account for their actions, but for KVH Industries president and chief executive officer (CEO) Martin Kits van Heyningen, it is simply part and parcel of offering integrated services in the satellite-communications sector. Having “one throat to choke” when things go wrong is just one of the ways that the NASDAQ-listed company has sought to differentiate its service offering for its shipowner customers.
A leading supplier of very small aperture terminal (VSAT) systems, KVH delivers end-to-end solutions to its maritime customers. The company leads through the entire process: it manufactures the equipment, runs the network, writes the software, and provides content as well as content-distribution systems. By offering connectivity as a service, “we strive to solve the customer’s entire problem. If something doesn’t work, it’s our fault,” Kits van Heyningen tells IHS Markit, stressing the importance of customer goodwill in a sector that sports several companies with competing solutions.
“We take all the risk. We buy the equipment and install it and this means we have to earn the customers’ goodwill every day,” he explains. “If the only thing that keeps a customer with us is the fact that they have signed a five-year contract, then we have gone out of business. We just don’t know it yet.”
The CEO’s customer focus and relentless drive to innovate is clear. The business, which was originally named Sailcomp Industries before being reincorporated as KVH Industries in 1984, was started in the basement of his parents’ Newport home while he was still in college. A holiday job at a shipyard and a brush with the designer of an Americas Cup yacht looking to get a computer onboard saw Kits van Heyningen step in to solve the problem. Roping in his father, Arent, who was employed at commercial electronics company Raytheon, they succeeded in getting the first onboard computer on a yacht in 1979, but this achievement spurred another challenge – a requirement for digital inputs.
As a result, they set about building the world’s first commercial digital fluxgate compass for sailboats, called Sailcomp, and the rest is history. This invention gave rise to the development of other navigational systems that eventually took the company into satellite networks. Based in Middletown, Rhode Island, it now has more than 650 employees working out of 10 locations worldwide, including Belgium, Brazil, Hong Kong, Singapore, and the United Kingdom.
KVH Industries describes itself as a manufacturer of solutions that provide global high-speed internet, television, and voice services via satellite to mobile users at sea, on land, and in the air. It also builds sensors and integrated inertial systems for defence and commercial guidance and stabilisation applications.
Having spent almost four decades in technology, Kits van Heyningen is well placed to comment about what is coming next. Unlike some others in shipping, he is rather measured about the pace of digitalisation in maritime.
“To predict where the maritime industry is going, it’s worthwhile looking at what happened in the past decade. On land, we have seen the digitalisation of business. Big data, artificial intelligence – these things are coming but they’re not there in maritime yet. Everyone is talking about digitalisation coming but if you look at the number of people who have digital platforms and are using them, it’s a very small number,” he tells IHS Markit.
“With respect to unmanned ships, it’s our view that it is probably a longer time [away] than people think. We have a five-year planning horizon and we have decided that unmanned ships are outside this horizon. They’re outside of the five-year view of things that we can influence,” he says, noting that maritime has had autonomous aspects for longer than any other industry, with autopilots being used for decades and some ships running on autopilot almost all of the time.
“When it comes to driverless cars, the part that is improved by making the process unmanned is the driving. In shipping, you put in the desired course and the ship will go there. Navigating through two waypoints is not the hard part – getting rid of all the tasks that the crew do all day is and that doesn’t have a lot to do with autonomous navigation. Going unmanned is going to take longer than people expect,” he tells IHS Markit.
‘We take all the risk. We buy the equipment and install it and this means we have to earn the customers’ goodwill every day’ – Martin Kits van Heyningen
KVH Industries in no stranger to acquisitions: it purchased leading online training provider Videotel in 2014 and content provider Headland Media Limited in 2013. While maritime may be witnessing significant consolidation among leading equipment suppliers, from Wärtsilä’s purchase of Transas to Kongsberg’s more recent acquisition of Rolls-Royce’s marine division, Kits van Heyningen is not convinced such pairings will deliver the desired synergies within the satellite-communications space.
“Lots of the companies consolidate because people want to get bigger, but I am not sure that that always adds value to the customer. Our decisions are customer-focused, so if an acquisition makes sense for us because it achieves a higher level of integration that benefits the customer and we think it’s a great idea, then we may try to pursue it,” he explains.
“Taking two smaller players and putting them together does not always add value, especially if the systems aren’t the same. This can be said with a lot of the satellite networks. It sounds fine on paper, but they can be on different platforms with different antennas. It’s really not as easy to consolidate as people think.”
Kits van Heyningen, who graduated from Yale in 1981, wrote his first business plan while he was still a college student and spotting an opportunity and seeking to deliver on it without formal industry experience was a pivotal career decision.
Understanding the potential of raw talent and having access to a steady pipeline of the right skill is essential for any business focused on leading innovation in technology. The company rises to this challenge with its internship programme. This involves an intake of about 40 interns per year, many of whom hail from top schools like MIT, Stanford, and Kits van Heyningen’s own alma mater.
“We like to get them in and put them on our design teams so that they are doing productive work that they really enjoy, compared with hanging out in a mailroom or sorting brochures that they may do elsewhere,” Kits van Heyningen tells IHS Markit. “It has been very successful because they don’t know that everything is impossible yet. They just go ahead and do great things.”