Q&A: Jim Sumner of Isotrak
Jim Sumner, executive chairman, Isotrak, speaks to Natalie Middleton about the post-acquisition integration of VeriLocation and the two firms’ ongoing product development plans.
We were absolutely delighted to complete on the acquisition of VeriLocation back in June this year. We’ve just completed the first 100 days, which was the integration period of the two businesses, and have put both businesses together in Northampton.
Originally Isotrak was based in Milton Keynes and VeriLocation in Northampton. We’ve acquired a property adjacent to the VeriLocation building and also a warehouse in Northampton as well. We’ve relocated both the warehouse and offices in Milton Keynes to Northampton. We’ve been through a very busy 100 days.
The reason for the relocation is that technology businesses are all about people and all about teams and all about people being able to interact in close quarters. So having the business in two separate locations wasn’t going to be optimal so that’s the reason we took the decision to move to Northampton. We’re feeling very blessed in the fact that we’ve brought together Isotrak and VeriLocation and brought a few new people in as well.
What has the acquisition meant for both firms’ solutions for commercial vehicle operators?
In terms of structure and in terms of business, we’ve brought the two IT teams, customer service team, finance teams and sales and marketing teams together so they’re all sharing floors in each of the buildings so they’re fully integrated.
And what we’re doing is taking from a technology perspective, we’re taking the best of both businesses and bringing them together. Now one of the things that VeriLocation has a great reputation for and has been very successful in the marketplace is with its managed service camera solution. So now we’re integrating that technology into the Isotrak platform.
Equally Isotrak has got some great skill in job management and we’re now building a job management functionality in the VeriLocation platform, which we’ll be launching at our annual event at Silverstone at the end of the October. We’ve got a major customer event there; 300 customers coming along. And we’ll be able to show them both these examples of quite rapid integration of our technologies. So we’re bringing the best of what we have to our respective customer bases.
Other areas include our ePOD [electronic proof of delivery] solution, which Isotrak has got a great reputation for – again we’re now able to share that technology with VeriLocation customers.
And really the hypothesis when we brought the two businesses together was very much that merging of the best and bringing together the best technologies that both companies have established in the marketplace with.
How is the timing proving in terms of future technology trends?
Timing is always the key in these matters and I think the timing of Isotrak and VeriLocation coming together really couldn’t be better. There’s a really big push in the market around Health & Safety compliance and something I think you’ll see in the significant growth rates for VeriLocation camera solutions at the moment. VeriLocation managed camera solution is the best of breed.
With all of the issues around spiralling insurance premiums and congested roads, having the benefit of the best camera solutions to make the best of for example the golden hour when should there be an incidents that the haulier can be on the > with the insurers – also for driver training as well and improving the whole culture in the business in terms of safety and driver standards. It is a very powerful technology and hence the reason why it’s probably the fastest growing of the market at the moment. And we’re doing very well from that.
What benefits has the acquisition brought about?
There’s [been] lots of benefits actually. One of the things that was a real synergy point in terms of Isotrak and VeriLocation coming together is that if you take the Isotrak customer base, which is typically the large corporate and large fleet markets, many of those fleets also have light commercial vehicles in the fleet as well. Our technology is more geared towards the larger/heavier vehicle fleets but VeriLocation technology works extremely well across the small/medium-size fleets and the light commercial vehicle fleets as well. So what we’re able to do by bringing the two together is offer many of our customers now a genuine one-stop solution which before wasn’t easy for us to actually handle.
VeriLocation has established itself as the market leader in the small/medium-size fleet market in the UK and we have seen many fleets grow with them and then suddenly move into the requirements for the larger job management systems that Isotrak has been very successful at delivering in the past. And therefore there’s a natural process of us coming into contact with VeriLocation customers and we thought it really does make sense to bring the two businesses together.
What about future developments?
Certainly where we are looking at a significant market opportunity is in light commercial vehicles, firstly because many large fleets now have a growing light commercial fleet, examples being home delivery as a growth component in the market, so that’s certainly the two together for us.
And then secondly what we are seeing now with electric vans and safety standards, particularly in the construction sector is a good example, [operators are] needing a higher level of functionality beyond just traditional tracking. So cameras is a good example, ePOD is another example – [these] are all becoming functionality now that the light commercial vehicle market is looking for and we’re ideally suited to serve that with the VeriLocation platform.
Is the trend in operators downsizing from HGVS to vans playing a role in that?
Yes that’s right and I think that will be a continuing trend in the marketplace. Obviously with the 7.5-tonne challenge and the driver challenge that CO2 and ‘grandfather rights’ are just starting to hit home, people are starting to drop down into the larger light commercial vehicles and you’re right we need to be positioned to deal with that trend in the marketplace.
What’s the fleet reaction been?
Fantastic – and I think as a measure of this we are completely oversubscribed for our event at Silverstone in October and we’re now wishing we’d been forward looking and could accommodate twice the number of people attending. And next year we will. I think we could end up with one of the largest events next year in the industry, we’ve got that much interest at the moment. And a lot of themes at the event will be looking at the future – driverless, electric and telematics in that whole arena, which we are right at the centre of. We’ve got some very, very interesting people coming along to share with us how they see that future as well.
How are you ramping up for future technologies, e.g. driverless vehicles?
We’ve got some interesting conversations going on with a number of clients over dealing with range anxiety and helping to plot courses to charging points etc. There’s a very interesting arena there. We’ve got some very interesting discussions going on with insurers as well. I think the full area of drivers and insurance and actually driver rating systems is now starting to move into the insurance arena – just like you and I have a consumer credit rating it’s not going to be long before we have a driver insurance rating as well. That’s another major trend that’s starting to evolve.
I think the whole arena of safety with vehicles is just intensifying. We’re looking at some interesting technologies now – we’ve even found integration of alchol testing into our technology as well to avoid incidents where drivers take charge of the wheel where they’re not fit to do so.
I think this is just going to continue to increase and obviously recent events, and very unfortunate events, will just lead to further tightening of legislation in these areas.
Parent firm Lyceum has a great track record for investing in technology firms. How are you finding the support from them?
They’re such great investors. They really appreciate the dynamics of technology businesses and not all investors specialise – they tend to be quite agnostic. I’m so glad we’ve got a specialist investor because not only from the point of view that do they really understand our business but they’ve got lots of other businesses that they work with and invest in that we can talk to and share experiences with. They’ve got a lot of technology now in completely different arenas and we can learn from that.
What about your plans for the future?
It’s growth, growth, growth. We know we’re on a rich seam here. We’ve recently opened an office in Canada and that’s going really well. We’ve got significant growth in Australia – we’re launching a VeriLocation in Australia as we speak and we’re actually going to be sending some people from our VeriLocation to Australia to help start the product in that market, where Isotrak has done extremely well.
In the US as well, we’ve got a lot of interesting activity. Later this year we’re going to take g VeriLocation to the North American market and we’ve got some other legislative areas we’re working on such as hours of service there at the moment. We’re working through that, we’re going to take VeriLocation there as well.
So you can see that it’s a highly complementary coming together of two businesses here. We’ve got to cross both customer markets and bases with our respective products and it’s very exciting here.
Are there major differences between the UK and other markets?
Comparative in an international market sense, the UK is extremely competitive as a market place compared to say, North America is a good example – where I’ve spent a lot of time. And a lot of that is the fact that we pay an awful lot more for our fuel here than our North American friends, hence this is inevitably a greater focus.
And I think because of the congestion of our roads, safety has become a much, much bigger issue. Telematics has [performed] significantly over well the last two decades certainly but the last decade as well, into moving on the platform of tracking and taking that into areas, driver behaviour and safety and compliance and so forth, where really the growth is for that telematics platform, the UK is very much a benchmark to very many markets to come look see and follow that technology.
Are we still at the tip of the iceberg for telematics?
I think what’s helped as well is that data costs have come down so significantly over the last five years. We’re shifting a lot more data now. I think that’s why cameras are doing so well because what you can now take from a vehicle, even in real time, is something you could have only dreamt about five years ago. The technology was there, it was just the cost of it was exorbitant. So what we’re seeing with cheaper data now and also devices capable of handling much larger volumes of data, we’ll just see this continuing and continuing and not just in passenger cars but in commercial vehicles too as we start moving into driverless, into probably alternative fuels and more likely than not, electric. This is all piecing that together. We are all very much in the centre of that technological revolution.
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