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Home » Verizon buys Fleetmatics for $2.4 billion
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Verizon buys Fleetmatics for $2.4 billion

August 1, 2016
Ben Ames
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Telecommunications giant Verizon Communications Inc. has acquired the GPS vehicle-tracking company Fleetmatics Group PLC for $2.4 billion, continuing to expand beyond its roots as a telephone service provider by adding vehicle telematics and mobile workforce-management tools.

New York City-based Verizon has been on a spending spree in recent months, buying online media pioneer Yahoo Inc. last week for $4.8 billion and the telematics and navigation-systems provider Telogis Inc. in June for an undisclosed amount.

Fleetmatics, based in Dublin, Ireland, with its North American headquarters in Waltham, Mass., will join Telogis and Verizon's own Networkfleet product in the Verizon Telematics division. Verizon Telematics is a San Diego-based subsidiary that targets automobiles and fleets with connected services such as security, productivity, convenience, and infotainment./p>

The deal is expected to close in the fourth quarter of 2016, after passing regulatory and shareholder approvals.

Verizon values Fleetmatics for its range of software as a service (SaaS)-based products for small and medium-sized business, Verizon Telematics CEO Andres Irlando said in a statement. Combining those products with Telogis' related software platforms, customer bases, and domain expertise "will position the combined companies to become a leading provider of fleet and mobile workforce-management solutions globally," Irlando said.

Fleet operators that subscribe to a web-based SaaS solution like Fleetmatics' can track the performance of their mobile assets without hosting the requisite computer servers and information technology staff in their own offices.

The new acquisition allows Verizon Telematics to broaden its coverage of the fleet-management market, selling Telogis products to large enterprise companies, Networkfleet and Fleetmatics services to small and mid-sized businesses, and both Telogis and Fleetmatics products to long-haul carriers, Verizon spokesperson Marie McGehee said.

For each of those segments, Verizon Telematics now offers both vehicle telematics such as location, fuel consumption, speed, and mileage, and also workforce-management data such as schedules, routes, compliance, and human resources data, McGehee said.

By joining Verizon Telematics, Fleetmatics and Telogis will now be part of Verizon's Internet of Things division, a growing business segment that generated $205 million in revenue for the second quarter of 2016, a 25-percent increase over that period last year, she said.

That segment of the transportation market is forecast to continue its rapid growth, so Verizon had good timing in acquiring Fleetmatics, said Tony Wayda, supply chain practice senior director and principal at Boulder, Colo., consulting firm SCApath.

"Verizon have been trying to penetrate this market for years. I think it is a wise move. With the latest acquisitions they become a solution provider, not a commodity of cellular voice and data plans," Wayda said.

As Verizon continues to expand its portfolio of services for logistics fleet management, its greatest test will be developing support for advanced optimization services such as the routing and scheduling tools offered by Omnitracs LLC or Descartes Systems Group Inc.

In the meantime, Verizon is now well positioned to offer its expanded services to small and mid-sized companies, Wayda said. "With the growth of the mobile workforce, the ability to utilize GPS location, geofencing, and ECM data (speed, idle, fuel, etc.) will help them become a viable, low-cost-of-entry option for small to medium businesses. There is no reason they cannot expand that to large companies," Wayda said.

Technology Asset Management Labor Management
KEYWORDS Descartes Systems Group Inc. Fleetmatics Omnitracs SCApath Telogis Verizon Communications Yahoo
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Benames
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

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