A new foundation for integrated solutions
Digital Solutions was formed as a new business area in 2017, and includes our software house. However, it only became operational from January 2018, so this annual review focuses exclusively on our 2017 software business.
For DNV GL’s software house, 2017 was a year of accelerating our software’s transition to integrated digital asset ecosystem solutions. The digitalization of the shipping industry gathered further speed in 2017. Although the shipping market was generally weak due to overcapacity in tonnage and a record low number of new vessels under construction, investments in software solutions for fleet management and operations increased. The strong growth in sales of maritime software solutions in 2016 continued in 2017. Our maritime software solutions were deployed to almost one thousand additional vessels in 2017, taking the total number of vessels using DNV GL software to 6,200.
A prototype for a new cloud-based solution called Navigator Shore was developed and deployed on Microsoft Azure for testing by customers, who provided valuable feedback before the release in 2018.
The offshore newbuilding market is experiencing a downturn, but we are beginning to see more upcoming projects, within structure design and engineering. We retained the number of structure ecosystem customers in 2017 and registered increased interest in our software products for offshore wind turbines.
The structure ecosystem team developed Structure Insight, which will support 3D asset models and cloud-enabled analysis building on our Sesam software as well as wider collaboration in the design and engineering process. The development involved strong customer interaction, with key customers testing pilot versions of Structure Insight. Sesam was enhanced to address engineering efficiency and expand the number of standards supported and types of analyses available.
Our software-as-a-service (SaaS) offerings were also further developed and commercialized in 2017.
The software market in the downstream oil and gas segment performed well, driven by customers looking to reduce costs through optimization and digitalization. Increased regulation also contributed to greater demand for asset performance management solutions. Sales of plant ecosystem software increased, with China standing out as the area with most growth for the year.
In 2017, we acquired ComputIT, a Norwegian company that owns KFX software for computational fluid dynamics (CFD). This particularly strengthened our position in the Asian market, where customers increasingly request 3D modelling capabilities. The acquisition also added leading CFD analysis capabilities to our digital asset ecosystems, specifically for plants, pipelines and structures.
Upcoming regulation is driving changes in the pipeline market. In the United States, the Transmission Integrity Management Program (TIMP) is expected to implement new regulations in 2019 related to pipeline risk management.
We sustained our market share for software in the pipeline ecosystem in 2017. Acceptance of cloud technology is becoming more prevalent across the industry. Customers are also looking to benefit from a shift towards probabilistic risk models, allowing a more targeted approach to risk management. In 2017, Synergi Pipeline development included both cloudbased technology and a new probabilistic risk model.
Several new pipeline products were launched in 2017, including Synergi Pipeline — Ticket Risk Assessment (TRA) which was then licensed to the largest distribution company in the US. With Enterprise Leak Detection, we grew our market share in leak detection and anticipate continued growth in that area.
The energy value chain is in the midst of a significant transformation with new energy resources and increasing digitalization. This takes place in the context of ageing infrastructure and continuously tight operational budgets. DNV GL continued to expand its electric grid software market and the target in the main market, North America, was surpassed.
In addition to a new high in licence sales and 40% growth in revenue in 2017, the year was a major milestone in the development of the electric grid digital asset ecosystem offering. More than 55% of customers engaged actively through usergroup meetings, helping to shape the development. The technology stack is becoming more cloud-based, open and modular. The release of Synergi Electric 6.0 brought a new mobile inspection solution, a business intelligence product and a forward-looking health and risk management application.
In a highly competitive market with broad investment in new technologies, DNV GL’s QHSE software solutions saw double-digit growth in 2017. Synergi Life was the first of our products to come with a fully cloud-enabled solution and is the front runner in the transformation of our business from the traditional on-premise software model to the cloud, mobile and software-as-a-service (SaaS) model.
We expect the change towards the SaaS subscription offering to be critical in the market in the coming years and in 2017 we professionalized and optimized our SaaS business.
A new design for improved user experience was also developed in 2017 and the number of new customers more than doubled in 2017 compared to 2016.
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QHSE software, which provides a platform for recording, tracking and responding to incidents and enables the reduction of operational risk related to human safety and environmental impact.
Software facilitating the reporting of ships' voyage data from departure to arrival. It includes options for fully integrated bunkering and Remaining on Board management.
Digital solutions help city leaders to reap the social and environmental benefits of a distributed energy model while also meeting their climate action objectives and becoming more resilient.