With a U.S. regulatory mandate approaching, Omnitracs has been deepening its SMB channel presence, including a new partnership with Samsung and a push beyond telematics-focused resellers into the broader mobile device management channel.
The telematics industry – high tech fleet tracking – is presently undergoing massive changes. Omnitracs, the market leader is in the midst of that change. For them, part of that change involves involving growing their channel further in 2018, in Canada as well as the U.S. While their channel presence in Canada has been weak, they have made improving that a priority.
Omnitracs was the founding business and division of Qualcomm, and was sold off from there to a venture capital firm, Vista Equity, in 2013
“It’s absolutely a different strategy, since the change in management,” said Eric Braswell, senior director of global channels at Omnitracs. “There was a significant reinvestment in the business, an increase in headcount, in customer support resources, and updates and improvements to the platform. The headquarters relocated from California to Dallas.
“About half of my staff are legacy, but there has been an across-the-board change in culture,” he said.
The changes have been necessary to keep up with the rapidly changing nature of the telematics space.
“Back when this was a Qualcomm business, things were focused on satellite communications,” Braswell said. “It was expensive, so telematics was really limited to the larger fleets. The technology improved, and today the technology is terrestial – mobility or cell towers. Costs came down, and adoption was broader. It was adopted by smaller fleets and even owner-operators, with small five truck fleets. That was unheard of before.”
While Qualcomm only talked with the large fleets, they established a channel about five years ago specifically to address the SMB space, something that Vista has made additional investments in since assuming control. They have been spurred to further moves in this direction by an imminent mandate in the U.S. that all long-haul trucks must have electronic logging devices (ELD) in place by December 18 of this year.
“The larger fleets already had this, but the changes to the industry mean that the smaller fleets are now a large bastion,” Braswell said. “A lot of the smaller fleets have still been using paper logs. While there is provision for some local exceptions, the decision was made to really focus on that because the growth potential is there.” A similar mandate has not yet been passed in Canada, but is under active consideration, and is considered likely to follow implementation in the U.S.
The approaching mandate has caused significant disruption in the industry by encouraging the entry of new firms into the market.
“A lot of entrepreneurs have launched their own startup firms,” Braswell said. “So you have gone from where there were a handful of firms two to three years ago, to one where there are now many companies, including ‘mom and pop’ startups, many of whom don’t have a background in trucking. They compete on price, and some charge a very small amount for a piece of hardware, with no maintenance plan and no contract. How does a business like that stay viable for the long haul, once everyone has a device?”
This market also won’t disappear on December 19th because not everyone plans to have a device by then. A survey of 1,620 truckers between November 30 and December 5, by weight station bypass service provider HELP Inc., found that 49 per cent haven’t yet selected an ELD. Of the narrow majority who have, only 33 per cent have them in place. The remaining 18 per cent say they have made a choice, but not yet installed the devices.
As would be expected, it is the smaller companies and owner-operators are overrepresented among those who are not yet in compliance. More than half the respondents who identified themselves as fleet managers said they have ELD devices installed and operational, while just under 28 per cent of drivers and owner-operators were in the same position. 68 per cent say they don’t plan any last minute installations, with many not convinced the mandate will take effect. There are ongoing attempts in the U.S. Congress to delay it.
Braswell said that Omnitracs is preparing for ELD acceptance and adoption, and that their recent channel push is part of that.
“When our channel started, we were very much focused on specialized telematics providers,” he indicated. “When I came here two and a half years ago, we had one master distributor twelve partners. Since then we have expanded the channel. Including partners who are not just telematics specialists, but who have a broader footprint in mobile device management.”
That led to a new Omnitracs partnership with Samsung on a a joint ELD-compliant solution that will be sold through the VAR channel.
‘We have other relationships, including a non-channel relationship with Honeywell, but the Samsung partnership is unique at the moment from a channel perspective, and we are focused on making it work,” Braswell said.
Omnitracs has also been honing its channel strategy internally.
“We have had multiple products in the past, but are now trying to get the core platform down to IVG – our Intelligent Vehicle Gateway platform – to replace the legacy products,” Braswell said. “It’s a real upgrade for the SMB channel. It has attractive pricing and great margins, and a share of the recurring revenue for the partner. It also has a simplified onboarding process, so the partner can spend more time in the field rather than doing the back office work. We have also implemented an MDF program for SMB partners as well as robust deal registration.”
In the last two and a half years, Omnitracs’ channel business, measured by the number of trucks brought in, has grown 600 per cent, and is now between 11 and 12 per cent of the company’s revenues.
“We now have 48 partners in the U.S.,” Braswell said. “We are still very early in our channel development in Canada, with two partners in Canada today. The Canadian channel is managed out of the U.S.”
Braswell said that strengthening their Canadian channel, which was strengthened by their acquisition of Mississauga-based distributor Shaw Tracking earlier this year, is a priority in 2018.
“We want to improve our channel presence in Canada,” he said. “We are looking at options for the distribution of IVG in Canada.”
Omnitracs is also looking to get the channel selling more of their other products, like their XRS mobile device management solution, which has no hardware and is managed from the customer’s own phone or tablet.
“We are investing and expanding that network,” Braswell said. “We are also looking at making new products available to the channel. There has been a massive increase in trucks adding us, but we have other solutions they could use, but which they do not yet have.”