Verizon Networkfleet: Delivering Price & Technology

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.



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