By Andrew Patterson
These days, navigation devices in vehicles are almost as standard as radios which probably mean map books must eventually be destined to go the same way as instamatic cameras.
When Navman first appeared on the scene in NZ few people would have realised then the revolution in mapping the technology would unleash in just a couple of decades.
But while the satnav device found in most cars these days is simply designed to get motorists from point A to point B using the most efficient route, the technology is also being put too much greater use by businesses running vehicle fleets.
And it’s the software that drives these units that have become the new revenue gold for businesses such as Navman Wireless; an offshoot of the original company.
The Navman evolution
Ian Daniel, Vice-President Asia Pacific, who has been with the company more than a decade, says Navman has been through something of an evolution over that period.
“I joined the company in 2002. Peter [Maire, now Sir Peter] hired me and I remember the company was just growing astronomically at the time.”
“It was a great time to be joining Navman, as it was then. Peter was a true visionary and we all know that what he did and the contribution he made to this company during its formative stages was something spectacular.”
The first major change in Navman’s ownership structure came in in 2003 when it was divested to Fortune 500 company Brunswick.
“Then probably the next evolution in its life cycle occurred in 2007 when Brunswick decided to break the business up and the various parts got sold off to MiTAC who took the navigation side, Navico who picked up the marine side and then there was a management buyout by a group of us, along with some private equity funding, to pick up the remaining wireless side of the business.”
“Then in December last year, we divested the wireless business again and were acquired by Danaher Corporation (NYSE:DHR) who are a Fortune 200 company based just out of Washington. We think the outcome has been a great result and that we’ve found the perfect home for the business to be able to achieve its global growth ambitions.”
While the sale price hasn’t been made public at this stage, Daniel says the multiple Danaher paid was “impressive.”
Not like the old days
Ironically, the site that Navman Wireless still occupies on Auckland’s North Shore was previously the production site for the original Navman facility. At its peak more than 750 staff worked on the site. Today there are just 75.
“The MiTACK guys still share space with us so it’s nice to still be on home turf you could say, but considering the head count we used to have previously and what it is today, we’re very different businesses. But at its peak, this certainly was a monster of a business.”
Today Navman Wireless is what’s termed a SAS (software as a service) provider which, increasingly, is seen as the real revenue generating aspect of the business. Being involved in producing componentry or black box production, as it’s known in the business, is now a thing of the past.
“We completely divested the hardware and black box side of the business. It really came down to a make-or-buy decision. We always felt that if there was someone out there who could do it the same or better, then it made sense to divest that part of the business.”
Fleet tracking drives efficiencies
Fleet tracking can involve a multitude of different vehicles from school buses through to heavy machinery and everything else in between, but it’s the efficiency gains that result from better fleet management that ultimately create the biggest benefit.
“We have a very broad range of customers we go after. We operate in 14 countries, we’ve got lots of different language drop options but we tend to go after certain types of vehicle fleets.
“At a base level for the customer, fleet tracking is all about driving productivity increases and improving efficiency in the business. So it’s about offering great customer service options but most importantly it’s really all about data.”
“Data is the new oil. You aggregate that data with your back office and you drive benchmarking, you drive outcomes and ultimately you drive up the ROI in the business.”
Clients come in all different shapes and sizes and it seems it’s even possible to have your own personalised solution for those with vehicle fleets of just one.
“We have some massive clients in the US who are in the school bus vertical, construction vehicle fleets, the mining sector. In fact I would almost go as far as saying that if it moves Navman has probably fixed a tracking device to it and sold an end-to-end solution to a customer somewhere.
“But at the other end of the scale we’ve even had independent consultants and contractors in business for themselves call us to say they want a single vehicle solution because they’re constantly on the move and keeping manual records becomes very tedious. So we manage everything from a single vehicle option right through to a couple of thousand vehicles in some of our largest fleets.”
So how has the pricing of these systems changed over the years?
“We believe our offerings these days are extremely competitive verses the value they offer in terms of data. But the genius of the system really goes back to Peter Maire more than a decade ago when he came up with this idea to take advantage of packet data which came about as a result of a network that Vodafone launched in the UK.”
“So we effectively built the system in NZ and launched it in the UK because packet data gave us the ability to move a lot of information cheaply and so that was really the genesis of the business model to make things stack up financially and of course technology has seen those costs continue to decrease.”
The future for SAS providers such as Navman Wireless is all about a process of continuous software improvement to further enhance the offering to customers.
“Data and data mining, as I mentioned earlier, really is the new oil for business. Information is obviously really important and how you aggregate and deliver that data to the customer is definitely key.”
“From an innovation perspective we run a lot of workshops with customers as well a lot of webinars. We put a lot of emphasis on our training programmes and really understanding the needs of our power customers. We get a lot of feedback via our product teams and the voice of the customer is obviously very important for us when it comes to adding new features and enhancements.”
So what will success look like for Navman Wireless in the future?
“I think success will really be focused around consolidation of the space globally and that’s exactly where we want to be. We want to be out there leading the charge and leading that consolidation globally. We think we’ve got the right platform, great business models, reliable solid business technology and most importantly, we’ve got the right people. I think we can get it done.”
|Sector:||SAS (software as a service)|
|Founded:||2006 (as Navman Wireless)|
|Fastest growing market:||Mexico|
|International offices:||Mexico, U.S, Taiwan, Shanghai, UK, Italy|
|Domestic / Export split:||10% : 90%|
|Ownership:||100% owned by Danaher Corporation (NYSE:DHR)|