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About the Authors:
Howard Smith
Managing Director
Howard Smith is a managing director (office of the president) specializing in research and investment in software-as-a-service (SaaS) businesses and other business models based on information technology, particularly internet of things, cybersecurity, and internet infrastructure. He also built the firm’s historical research franchises in call centers and computer telephony. He is a thought leader in his sectors, having authored numerous widely read white papers. He uses his industry knowledge and expansive network to uncover promising investment opportunities and help companies navigate their strategic paths and accelerate growth. His work has been cited for excellence by the Wall Street Journal and other publications. Prior to joining First Analysis in 1994, he was a senior tax consultant with Arthur Andersen & Co. He earned an MBA from the University of Chicago and a bachelor’s degree in accounting from the University of Illinois at Urbana-Champaign. He is a certified public accountant.
David Gearhart
Vice President
David Gearhart is a vice president specializing in research in software-as-a-service (SaaS) and the Internet of Things sector and has played a key role in establishing First Analysis’s Internet of Things franchise. He is a thought leader in his sectors, having authored several widely read white papers. He uses his industry knowledge and expansive network to uncover promising investment opportunities and help companies navigate their strategic paths and accelerate growth. Prior to joining First Analysis in 2011, he was an accountant with The Northern Trust Co. and an options broker with American Option Services. He earned a bachelor’s degree from Purdue University with a concentration in economics and finance and his MBA at DePaul University with a focus on finance and entrepreneurship. He is a CFA charterholder.
First Analysis Internet of Things Team
Howard Smith
Managing Director
David Gearhart
Vice President
Matthew Nicklin
Managing Director
Internet of Things/M2M
Looking at Fleet Management Solutions, move to 2.0
July 9, 2015
  • We see a maturation at the high end of the North American fleet management solutions market, specifically heavy trucks and enterprises with 1,000+ vehicles, which we expect to spur increased vendor differentiation, continued consolidation, greater churn, and a move by some players to attack the less-penetrated SMB market.
  • We also believe the proliferation of low-cost, high-quality in-vehicle devices is generating a telematics data stream that will be increasingly integrated with data from multiple parts of the enterprise for analysis as part of a larger set to produce additional actionable insights (an area we call FMS 2.0), creating both opportunities and threats for existing fleet management solutions vendors.
  • We believe companies with scale combined with an appreciation for data analytics – either developing or planning to offer such capabilities – are in better position to take advantage of these changing dynamics and capture share than vendors lacking these attributes.

TABLE OF CONTENTS

Combining trade show thoughts with industry commentary

High-end/enterprise market maturing

Ramifications spur market change

High ROI of telematics creates additional data source

Blending telematics with other data creates opportunities and challenges

Private company profiles: FMS 2.0

FMS 2.0 impacts on public IoT companies

Appendix

Combining trade show thoughts with industry commentary

This report is an amalgamation of thoughts synthesized from our conversations at the spring NAFA Fleet Management Association conference and many follow-up interactions with public and private players competing in this market as well as industry observers.

High-end/enterprise market maturing

We believe the high end of the North America (U.S., Canada) fleet market, which includes large fleets operating 1,000+ vehicles as well as long-haul carriers (Class 8 trucks) and smaller heavy commercial fleets (Class 6-7), is maturing with an estimated connectivity/telematics penetration rate of around 65% (vs. our ~14% estimate for the total market; see Appendix 1 for our detailed estimates and discussion). This part of the market is typically considered high-end because the solutions catering to these customers offer the most features and users rely on more advanced functionality such as hierarchy capabilities (ability to segment by regions or groups of trucks, with user access and reporting made accordingly), benchmarking, third-party software integration, workflow, and analytics as part of day-to-day operations. Advanced features are often ignored by or simply not available on solutions targeting the less-penetrated small-and-medium-sized (SMB) accounts.

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