Verizon this week said that it intends to acquire the Dublin-based Fleetmatics Group for $2.4 billion, in a very interesting deal. The prime clients of a fleet management company are organizations with lots of vehicles on the road. They demand cutting edge insights, and a world of software has evolved to meet their needs.
Imagine a cable company with hundreds of service trucks visiting subscribers and tending to company assets in the field.
An enormous amount of money is on the table, through cutting travel time by customizing routes; coordinating schedules so that a worker with a specific set of skills is routed carefully and used effectively; and training drivers, through alerts, warnings and rewards, to reduce fuel use by smarter acceleration and braking.
In all of these areas, even small improvements, when telescoped across massive fleets, are music to chief financial officers’ ears. Fleet management companies have developed extraordinarily strong software suites. The GPS-type services with which consumers are familiar are just the tip of the iceberg.
Thus, it seems that Verizon is getting a double benefit if the deal is approved by Fleetmatics’ shareholders and the Irish High Court. Verizon will get Fleetmatics’ base of 37,000 customers, and its intelligence, which most certainly can be adapted for use in consumer connected vehicle scenarios.
The fleet management sector may be an attractive target. Berg Insight, which last month named Fleetmatics the leading fleet management firm in the Americas for the third consecutive year, has released research on the market. Berg found that as of the fourth quarter of last year, there were 5.8 million “active fleet management systems” in North America. That number, based on a compound annual growth rate (CAGR) of 17 percent, will pass the 12.7 million mark by 2020. In addition to Fleetmatics, the top companies are Omnitracs, Telogis, Trimble and Geotab. Verizon’s move on Fleetmatics is the first acquisition domino to fall in North America.
American City and County delved into how modern telecommunications and IT will affect fleet management:
Certain elements of fleet management can be brought into the connected vehicle realm intact. For instance, some programs monitor driver behavior and send alerts if the readings suggest drivers are tired. Others monitor and send alerts if sensors suggest that a tune-up will lead to more efficiency or that a part is about to break. Other tools will need tweaking to be useful.
Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at email@example.com and via twitter at @DailyMusicBrk.