This is the best example we've seen of how 'Software as a Service' can reinvent a business

Picture: Getty Images

“Software as a Service”, or “SaaS”, is a term that companies began kicking around more as cloud services improved.

But the term itself harks back as far as 2001, from this paper out of the Software & Information Industry Association, which describes the coming change:

Following the maxim that “the Internet changes everything,” many believe that traditional packaged desktop and enterprise applications will soon be swept away by the tide of Web-based, outsourced products and services that remove the responsibility for installation, maintenance and upgrades from over-burdened MIS staff.

Here’s one example of a “traditional packaged desktop and enterprise application” that less and less daily readers will recognise:

Because this is what that looks like now, not taking up half your hard drive:

And obviously, SaaS has now exploded into millions of variations across the web and various mobile platforms.

But for regular people, it’s still… dull. So we tend not to think or talk about it, and tech journos prefer to write about rockets and smartphones.

If you’re one of those regular people, here’s a great example of how much of a game-changer SaaS has become while you weren’t paying attention.

Businesses don’t come much bigger, or successful, than Maersk. More than 80% of the world’s goods are transported on its oceans.

Maersk carries about 60% of that.

You can rest assured it has optimised all its shipping routes to within an inch of what they can be fully optimised.

At its Business Forward conference in Melbourne last week, Microsoft’s executive vice president Judson Althoff said that made the challenge of growing Maersk “pretty material”.

“Similarly, on the technology side they suffered from decades’ worth of tech debt,” he said.

Particularly in recent years when cyberthreats such as NotPetya showed it could literally stop the business in its tracks. It took 10 days for the copmany to reinstall 4,000 new servers, 45,000 new PCs and 2,500 applications in order to get back online.

Microsoft executive vice president Judson Althoff. Picture: Business Insider

So while Microsoft was overhauling Maersk’s tech systems, it took the opportunity to also look at how the world’s biggest shipping company could use its assets digitally to make more money.

“We asked the question, how can the data about your business, how could the data bout Maersk’s business become more valuable than the business itself?” Althoff said.

And here’s what they identified.

“They know where every good and product that is shipped around the world is at any given point in time. They know the volume of goods. They know the latency of last-mile delivery. They understand the world’s commerce through the eyes of shipping and logistics.”

Microsoft then built software assets, and put them on its cloud platform, Azure.

It linked them with its Dynamics 365 business apps, so they could run end-to-end workflow scenarios.

And now Maersk has an entirely new revenue stream selling to digital port facilities around the world, which it had compiled data on for the past 114 years and kept to itself, mostly written down in log books.

Other business can now use that data. For example, digital crane manufacturers can use it so that when a ship enters a harbor, the gear senses that it’s arrived and it can mobilise people on the docks “so that minutes are saved, hours are saved, and turnaround as these large ships travel across the ocean”.

Althoff said the revenue from those software assets “has actually funded their technology revolution inside of Maersk”.

Which is handy, because it’s that revolution helping keep the hackers at bay.

“We put their IP to work for them,” Althoff said.

So while you might not think your business is in any way a tech business, the knowledge needed to run your business might be a different proposition altogether.

Microsoft calls it “the art of becoming digital”.

“It’s actually far less about the technology itself and far more about how you marry it to your business needs and solve real problems using the same,” Althoff said.

In other words, it’s Software as a Service.

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