Weather has a significant impact on business for as many as 60% of all companies, according to a report by Gartner. By helping them navigate through, or prepare for, increasingly extreme weather, StormGeo has become a world leader in weather based decision support.
Norwegian company StormGeo has its roots as a weather forecasting service, and since it was founded in Bergen 17 years ago has evolved into a global supplier of decision support for weather sensitive operations in a range of industries - and the growth prospects are bright.
“Today we are a truly global company with offices in 16 countries and an important partner to the shipping and offshore industries where we see very good possibilities for growth,” says Erik Langaker, Chairman of the Board of StormGeo since 2008.
Since the acquisition of US company Applied Weather Technology (AWT) at the beginning of 2014, StormGeo is now the leading supplier to the shipping industry where the use of decision support services is expected to grow in the coming years.
“We are the fastest growing provider of onboard weather and ship routing solutions in the market and as ships get better data connections and fuel emission standards get tighter, the number of ships using these services will increase,” Erik Langaker continues.
StormGeo helps the ship’s captain calculate the safest, best, most cost efficient route and speed given weather forecasts and the ship’s specific design. This can result in fuel savings as great as 12% and it also reduces the client’s CO2 footprint. A shipping company operating around 150 ships typically spends around USD 2.1 billion on fuel alone in a year. StormGeo services around 6,000 ocean-going vessels on a continuous basis, but the addressable market is around 40,000 ships and is growing.
“We expect good growth from the shipping industry but there are a number of megatrends driving demand for our services. Increase in extreme weather due to global warming affects businesses in many ways and more offshore installations for both oil & gas and renewable energy also require our services to reduce risk and optimize performance,” says Kent Zehetner, CEO of StormGeo.
According to the research from Gartner, the main cause for operational shut-downs in all kinds of industries is weather, and decision support based on weather forecasting can significantly help reduce the risk related to climate and weather by allowing companies to prepare and plan adequately.
“This applies to many types of industries where stand-down times and damages can be reduced with sophisticated decision support,” explains Kent Zehetner.
A warmer climate also allows for new commercial shipping routes in areas with harsher weather like the arctic region while offshore investments in the same region is also on the rise and these both produce a need for weather based decision support.
One of StormGeo’s newer products is Oceanwatch™ which monitors real time ocean currents, wave conditions and temperature shifts in the ocean. Combined with weather forecasting, this provides valuable decision support for offshore oil & gas operations.
“For operations like these, weather conditions are already crucial, especially for the offshore wind power, I think we have only seen the beginning. We are already well positioned to take a leading role in this green revolution,” says Kent Zehetner.
In order to match the new needs with better products and technology, over a quarter of gross revenues have gone into R&D in the past ten years and this is now paying off.
“I believe we have the technologically most advanced and sophisticated products and forecasting systems on the market,” says Erik Langaker.
The EQT Mid Market fund came in as new majority owner in StormGeo in April 2014 and will support continued growth together with the other owners, management and the Board of Directors. The second largest owner is Norwegian company DNV GL (Den Norske Veritas), the global leader in classification and technical advice to the shipping and offshore industries. StormGeo has a close co-operation with DNV GL in development, distribution and marketing of their services.
StormGeo has 340 employees worldwide and estimated revenues in 2014 of approximately NOK 390 million. More than 75% of the business is recurring in its nature.