Chris, you have seen some big changes at Verizon Networkfleet. What is the focus of the company right now?
We were acquired by Verizon, which has been an exciting event for us. Verizon has the biggest wire line and wireless network in the country, and they want to leverage the backbone of those networks to do more things. They have purchased Hughes Telematics, our former parent company, and Networkfleet, to try and leverage not just the data on those networks, but all of the value added services, including software like ours on top of those networks. That is the most exciting event at Networkfleet.
What kind of synergy is Verizon Networkfleet bringing to the fleet industry?
The fleet telematics industry is filled with companies that are under 200 employees and relatively small in terms of revenue compared to other industries. By leveraging companies like Verizon, fleets are going to get lower prices and better technology — the kinds of things they are looking for.
One of the reasons that fleet telematics has not had the uptick that everyone hoped it would have is because people are looking for that convergence of price and technology. Bringing in companies like Verizon to help leverage its assets and brand name to bear makes the convergence of price and technology happen much more quickly.
What is stopping fleets from adopting this technology?
I think it is a natural progression. If you look at any technology, whether it be a toaster or a television or a video recorder or a cell phone, there is a natural adoption curve; it looks like and “s”. In the beginning you have the early adopter stage, that is a fairly long time period, and then in the middle you have the majority stage. That is where 70 percent of the buyers buy that new technology. In the end, fleet telematics is still a relatively new technology – it’s been around 14 or 15 years.
We are at about 25 percent penetration now, which is, when compared to other innovations, about the beginning of that “s” curve tick when the early and late majority adopters, about 70 percent of the market, come in. So, I think it is a natural progression.
If you look at cell phones, after about twelve years there was about a 25 percent adoption rate. Again this is because the technology and price hadn’t totally converged yet so people hadn’t seen the total value in it yet. When the technology and the price converge, that is when you get the 70 percent of the market that is about to buy in.
When a company is thinking of making a switch, what has to happen? How do you make that easy?
It is not like buying another cell phone. With telematics, the embedded device in the vehicle needs to be removed and replaced. That means the vehicle has to come in at some point or somebody has to visit the vehicle. It’s that easy.
What is the cost for the switch?
The industry model is changing slowly. Usually you are looking at an upfront hardware cost and a monthly service cost. We are seeing more and more folks adopt the pure monthly cost, much like you do with your cell phone today. You are essentially getting free or subsidized hardware for committing to a longer monthly service.
What are your clients telling you about their experiences with the technology?
We have a customer who has about 250 vehicles with Networkfleet and has been able to eliminate 25 of his vehicles because of better utilization of the vehicles. Understanding how those vehicles were utilized and being able to sell off those vehicles eliminates the expenses. That is 10 percent reduction in your fleet size, which is really an amazing savings that over time pays for telematics many times over. To be able to understand how your fleet is utilized and then be able to change it accordingly based on that knowledge is very beneficial.
We have another customer in Southern California who actually tracked the number of accidents they had pre and post Networkfleet implementation. They had about 30 accidents a year before implementation; about eight of those were speed related. They have tracked zero speed related accidents in the three years since they have implemented Networkfleet and about seven or eight total accidents a year. They will tell you that they have totally changed their driving habits. It is not the same type of fleet and the evidence is in the reductions in accidents and liability.
Let’s talk more about using the technology to track driver behavior.
Obviously you want to measure not just what a vehicle is doing but what a driver is doing and across different parameters. You want to know speed and idle time, which are the easy ones, but you also want to know things like seat belt status or hard brakes or hard acceleration – all very popular in our industry. Networkfleet measures those and we are seeing benefits with those just like the one I told you about with reduced accidents and liability. That is all because the drivers have changed their behavior and are driving better.
This is a pretty crowded field; what sets Verizon Networkfleet apart?
There is a reason Verizon purchased Networkfleet over some other companies — and they looked at other companies. Verizon has a culture and an attitude about building quality products and we definitely have some technology advantages. Other companies may have a different technology that is better than ours in some ways and we have technology that is different and better than some others in some ways. Some of that comes out in the wash, but in the end you are talking about the company that you want to partner with. Who are you going to get value from?
So, it is not just about technology, it is about all of the technology plus the value added services plus long term customer service. We are setting up customers for three, four, five, seven years. So they are doubling down on a partnership that is going to save them money and make them more efficient over the long haul. And what differentiates us is really that lifetime partnership.
It is not just about great technology, which we have, but it is about that great partnership throughout that great lifecycle. And that is why Verizon ended up purchasing Networkfleet, because they saw that in us and that is how they deliver value to their customers.
What difference has Verizon made?
They have 2,000 sales people so as a sales channel it is terrific. We are able to bring our value to a wider array of end users than we ever were able to as a smaller company. So, having access to their sales people is great but their brand is even better, right? People know Verizon as a great company that brings value to their customers; now they are going to know that Networkfleet is the same way. Verizon has brought us under their umbrella because they believe we are the same kind of company.
What’s next? What are you seeing on the horizon for Verizon Networkfleet?
As I mentioned, I think we are at the tipping point. I think we are there at the 25 percent penetration rate where the next five to seven years means 70 percent of the buyers are coming into the market. For those who are more cautious, you know some people are more cautious buying new technology, which is a natural progression. I think 70 percent of fleets are also in that category, just waiting for their peers to buy, waiting for a return on investment to be there, waiting for it to be proven in their mind.
Chris Ransom is the Director of Sales Engineering for Verizon Networkfleet. In this role, he is responsible for working with commercial and public fleets to integrate telematics technology into their operations and maximize the benefits of improved efficiencies.
In his 7 years with Networkfleet, Ransom has spearheaded the organization’s efforts in the clean technology arena by working with its partners to quantify the clean air benefits of Networkfleet. He has also has spoken at dozen of events and is recognized as an industry leader in fleet telematics.
Ransom has more than 20 years of experience in IT, software, and hardware consulting, including positions with SAIC, Accenture, and Gartner Group. Ransom has an MBA from San Diego State University and Bachelor of Arts in Environmental Studies from the University of California, Los Angeles.