Carnival Cruise Lines: Taking IT Management To The Next Level
As any CTO or network manager will tell you, one of the biggest business challenges is finding a way to maintain a strong corporate network that continually provides a live link throughout the entire company. Likewise, it does not matter if a corporation has 100 or 1,000 geographically dispersed regional offices, the element of interconnectivity remains paramount.
With 19 “fun ships” plying the seas, Carnival Cruise Lines, however, adds an unconventional glitch to such a seamless network connection: its “regional offices” are literally sailing the high seas. In other words, network managers at Carnival have to supervise Internet connectivity and maintain communications with approximately 27,000 shipboard staff—plus 3,000 shoreside employees—in order to serve the three million passengers who sail its fleet each year. Coordinating and managing these mobile corporate assets, while maintaining the highest quality of customer service for passengers, requires solid technological solutions.
For many IT professionals, this level of communication coordination throughout an entire company is a major business task, requiring a solid game plan that will ensure all branches of the company can continue to send and receive multimedia data. Carnival’s IT gameplan is a good example for any network manager seeking a solid solution to successfully provide a communications backbone that connects regional offices with corporate headquarters. In turn, client needs can be better met.
“Constant communications are what make our level of value and customer service possible,” says Vance Gulliksen, Carnival’s public relations manager. “Our ships regularly inform us of their ongoing requirements for food, wine, personnel, mechanical support and other small details that affect customers’ shipboard experiences. Meanwhile, our head office needs to keep our ships informed of the latest passenger requests and day-to-day data requirements. Without satellites, we wouldn’t be able to communicate with each other at all times. That ability allows us to provide our guests with a level of service that would otherwise not be possible.”
Make no mistake, satellite connectivity significantly contributes to this multibillion-dollar profitable entity, according to executives. Last year, Carnival Corp. and Plc, Carnival Cruise Lines’ parent company of which Carnival Cruise Lines is one of 12 within the portfolio, reported a net income of $1.19 billion ($1.66 Diluted EPS) on revenues of $6.72 billion, compared to net income of $1.02 billion ($1.73 Diluted EPS) on revenues of $4.38 billion for the same period in 2002.
Carnival’s Satellite Lifeline
Maritime Telecommunications Network (MTN) provides Carnival’s shipboard satellite communications. MTN’s proprietary ShipNet product, short for Satellite High- speed IP Network, can move TCP/IP data between ships and shore at speeds of up to 2.275 Mbs. Better yet, Carnival ships on ShipNet are integrated seamlessly into the company’s shoreside LAN, through Cisco routers installed in the company’s network. The cruise line’s Internet links do not incur much in additional costs, because they already use broadband satellite services to manage inventories, run credit cards and tie shipboard office and engineering systems to shore-based offices, according to MTN executives. The ships themselves have access jointly to high-speed downloads, with the ability to send data back to shore at speeds in excess of 512 kbs; approximately 10 times the speed of ISDN landline dial up.
Functionally, Carnival’s liners are as connected to the corporate LAN as any Carnival shoreside office. “The satellite coverage we get from MTN is global so even on transoceanic cruises, our ships are always in contact,” says Doug Eney, vice president for information systems engineering at Carnival Cruise Lines. “Fleet wide we have an ‘up-time’ of more than 98 percent all year round so our guests are always able to phone or e-mail their families, friends or business associates.”
Here is how the signals get back and forth. All the data generated on the ship—the passenger and crew e-mail, passenger and crew voice calls and all administrative data transfer—is sent into the ship’s Cisco router. All this traffic is converted to IP data and then flows from the router through the MTN satellite modem to the ship’s gyro-stabilized satellite antenna.
The data is transmitted to MTN’s global satellite network, using transponders provided by a number of affiliate satellite carriers worldwide. MTN’s satellite bouquet for Carnival Cruise Lines consists of Satmex, Eutelsat, New Skies, SES Americom and Intelsat satellite networks.
Once the data is received by the appropriate satellite service provider, it is then transmitted to the nearest MTN teleport gateway. The signal travels from the teleport to a dedicated terrestrial fiber connection and is routed to Carnival’s shoreside facility through a multiple firewall security configuration. For shore-to-ship communications, the path is simply reversed.
“It sounds complicated, but the system works,” says Gulliksen. “To the users, the connectivity is seamless.”
For Carnival’s network managers, the fundamental justification for a satellite-enabled network is maintaining a link between corporate and its sea operations at all times. “Keeping in touch with our ships is a huge priority for our corporation, especially when they are out at sea,” says Gulliksen. “Using satellites saves us a tremendous amount of time and money in terms of communicating timely business information. Our ships also use satellites to talk to other vessels within the fleet, via either phone or e-mail.” In fact, the captain, bridge officers and ship department heads all have their own PCs and satellite-enabled e-mail.”
For instance, satellite e-mail allows Carnival headquarters to alert the ships’ chefs to certain passengers’ special dietary requirements. It can also keep the ships’ entertainment directors informed about future live acts, or handle something as mundane as servicing information for the housekeeping departments’ washing machines. In short, whatever information Carnival’s ships need to provide passengers with the best experiences onboard, satellite e-mail delivers.
Beyond routine communications, satellite helps Carnival aid its ships fast when problems occur. “We have a very fluid and dynamic way of dealing with things, because shipboard life can often be unpredictable,” Gulliksen says. “When a ship is at sea the weather can turn foul, a piece of machinery can break down, or a passenger can suddenly develop a life-threatening illness; sometimes simultaneously.”
If a component fails while a Carnival ship is at sea, for instance, it is common practice for the ship’s engineer to take digital images of the affected machinery and to e-mail them back to corporate headquarters on shore. “This allows all of our ships to tap into our head office expertise at all times,” Gulliksen says. “It’s a big help in solving shipboard problems fast.”
To surf the Net while sailing the high seas, Carnival guests use the ship’s Internet café. The café is a turnkey installation provided by MTN. There, the guest logs on and elects to pay by the minute or to pre-purchase a block of minutes. Carnival sells 100 minutes for $55 or 250 minutes for $100. In either case the charges will automatically be posted to the passenger’s shipboard account. Activating the shipboard account for the entire voyage is just $3.95. Another $3.95 allows him/her to send an individual CruisE-Mail ($4.95 with a 20-second video clip attached). As well, the cruise line has a “pay-as-you-go” per-minute rate ranging between 50 cents and $1.
Neither Carnival nor MTN disclosed line-item financials, exact customer usage or investment figures regarding the Internet infrastructure. Neither would Carnival confirm our estimates in the following paragraph, but any network manager seeking to upgrade an existing communications infrastructure would have to execute a cost analysis model. In other words, one has to take into account the number of remote sites, the price of the equipment and the per-user charge of the network to estimate potential revenue and justify its initial investment.
In Carnival’s case, the company operates 19 remote sites, estimates it serves three million passengers annually and depending on the vessel size, anywhere from 1,400 to 2,900 passengers are cruising on any given trip during the year. In a best-case scenario figuring all passengers pre-purchased the 250-minute plan; Carnival stands to potentially make almost $1 million in revenue from the smaller vessels and $3.2 million in revenue from the larger liners in its fleet just from passenger interconnectivity alone. The same cost model when only half the manifest pays to be online would produce revenues between $500,000 and $1.6 million.
“Today’s passengers expect to stay in touch with the world via e-mail and Web surfing wherever they are,” Gulliksen says. “Thanks to satellites and our Internet cafés, they can. We also have Internet cafés for our crew,” he adds. “When you have people onboard from 100 countries, it is not surprising that they want to stay in touch with home. With these Internet cafés conveniently located aboard every Carnival ship, being able to provide shipboard employees with e-mail and Internet access saves them time and money when contacting friends and family around the world.”
Improving onboard telephone service—specifically the cost—is another priority for Carnival, and one in which satellite communications plays a part. “Our passengers have been able to make and receive telephone calls from our ships for several years,” says Eney. “Although the rates have declined steadily, they are still in the $5.95 per minute range. This is why we are working with MTN and a major cellular provider on a project that would allow passengers and crew to use their own cell phones to make and receive calls from the ships while at sea via satellite at very competitive pricing. We are starting to use a test this year for $1.95 per minute calls.”
A third way in which satellite connectivity improves passengers’ cruise experiences is credit card data transfers. Specifically, each Carnival passenger is given a “Sail & Sign” credit card to use while cruising. All purchases and services can be charged to this card, allowing customers to enjoy their cruise without constantly worrying about having enough cash. In turn, the cards are secured at the outset by passenger credit cards, and paid from these accounts when the cruise ends. The actual credit card approvals take place over satellite in real-time as guests enjoy shipboard services; the result is that end-of-cruise bookkeeping is simplified, and Carnival’s exposure to bad debt’s minimized.
Satellite connectivity is also a key to Carnival’s new “teleradiology” medical service, which is being pioneered by the Carnival Spirit’s infirmary. Using technology especially developed for Carnival by the U.K. company Integrated Dynamics, Carnival doctors and nurses can now transmit high-resolution digitized X-rays, electrocardiogram images and other patient data to shoreside doctors. Once received, the land and ship-based medical staff can converse via satellite in real-time; both to analyze the patient’s condition and to jointly decide which treatment to administer.
“The safety and well-being of our guests and crew are of utmost concern,” says Carnival President and CEO Bob Dickinson. “The Carnival Spirit’s new teleradiology system enhances our shipboard medical capabilities and allows us to continue to provide the highest standard of care at sea.”
Taken as a whole, the impact of satellite services on Carnival’s passengers and staff is profound. Without satellites, passengers would be as isolated as those who sailed in the early 20th century.
Nuts And Bolts
Carnival was an early adopter of the MTN Very Small Aperture Terminal (VSAT) service technology and has increased usage steadily since its inception back in 2000. Typically, satellite telecommunications is one of the first systems on a new ship to come online and is often used for weeks or even months while the ship is still being completed in the shipyard.
One of the communications advancements sweeping the 21st century is wireless connectivity. Any network manager with a long-term business strategy for his/her company is now considering this addition into the established network. For Carnival, the two most recent classes of its ships are completely wired for Wi-Fi Internet access in all public areas and lounges as well as crew areas. Wi-Fi is used for communicating from the ship to the terminal as part of the embarkation process and as part of the real-time ID security system used to track each passenger and crew when they leave or return to the ship in the various ports of call. Satellite technology bridges the gap for these communications when Wi-Fi gateways are out of range. While at sea, users can link their own laptops in the lounges, meeting rooms and pool areas to wirelessly access the Internet for e-mail or surfing, with the outside link being carried by satellite.
“Carnival recognized early on the potential of Wi-Fi technology for our administrative use as well as for use by passengers and crew members,” says Eney. “Throughout the last couple of years we’ve realized many advances in operating efficiencies as well as offering a modern convenience to our guests. We are increasing the areas of coverage on the ships steadily.”
Before Carnival began using the VSAT system, the ship-to-shore communication necessary to operate a cruise line was a significant expense item. Since the advent of the global broadband connection via satellite, however, Carnival has worked with satellite service providers to turn telecommunications from an expense item into a revenue stream.
This alone is impressive enough. The adoption of satellite communications, however, has also made it far easier to manage Carnival’s ships, thanks to the real-time LAN-type connections that satellites provide.
There is no doubt that adopting satellite communications has been a boon for Carnival Cruise Lines. The change has allowed once-isolated ships to connect to the corporate LAN, no matter where on the seas they might be. This has radically enhanced Carnival’s ability to manage its business, facilities and personnel on a real-time basis. Meanwhile, satellite communications is making passengers and staff happier, while turning a former expense item into a multimillion-dollar profit center.
Throughout this year, Carnival plans to further expand its satellite network applications by deploying a system to remotely manage and troubleshoot 4,000 PCs, including 1,200 installed on the company’s 19 ships—eliminating the need to fly technicians to various ports of call to handle critical upgrades or fixes. The satellite system provides Carnival with 1Mbs total bandwidth.
This management upgrade not only alleviates some headaches from the company network managers, but also helps Carnival save additional time and money from constantly migrating between operating systems, according to company officials. The network will further assist company executives with various administrative functions, both on land and at sea. Such applications include passenger credit card purchases (roughly half of Carnival’s 1,200 onboard PCs serve as point-of-sale systems), ordering of vessel hardware and tracking food and beverage inventories. On any given week, passengers consume roughly 380,260 cans of soda and 382,050 domestic and imported beers. This exemplifies how vital inventory control is for Carnival.
The benefits of having a satellite-enabled IT network for any company are virtually endless. The computer and online services are revolutionizing the way 21st century business is conducted, and more specifically for Carnival, changing the cruise line industry of yesteryear. So whether it is enhanced Wi-Fi applications or maintaining a strong corporate network backbone, satellite remains a solid technology choice for IT network professionals.
James Careless is a contributing editor to Satellite Business Solutions. James’ main interests are business and satellites, and how the two can work together.