The ultimate virtual office - includes related articles on the yacht business - yachting

Chief Executive, The, August 15, 1999 by Paul Keegan

Too busy to take your new 200-foot yacht for a spin around the world? Not if you've equipped it properly. A host of niche players stand ready to help you out.

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.