To say that the last few years have been tumultuous for the vehicle telematics industry is somewhat of an understatement. Still in its infancy, the industry has been sorely challenged during the economic crisis to convince fleet operators of the merits of spending money to save money – particularly in markets where the technology is not so well known.

And there have been struggles too with poor financial models and the application of third-party leasing, which in some cases went terribly wrong when the credit market began to dry up. This has led to some suppliers going into liquidation whilst others have joined forces – such as the UK’s Minorplanet and DigiCore, which teamed up last year to create the new Ctrack business.

Bill Henry (Inset), the newly appointed CEO of the merged Cybit and Masternaut telematics business, is in no doubt that the vehicle telematics market is undergoing rapid change. The two firms announced last month that they are joining forces to create the largest telematics provider in Europe – to be known as Masternaut Group – and Mr Henry believes that further consolidation in the industry is likely.

He comments: ‘If you look at other parts of the technology industry, whether you think about laptops or software for personal computers, there were many players and it was a very fragmented market and then over time it consolidated down to where you have a handful.

‘What’s interesting about telematics is that it’s always been fragmented and it’s never really been consolidated and I think that there will be a wave of consolidation.

‘There’s a lot of telematics companies that are struggling and I think they are going to have an increasingly harder time – if you are delivering relatively simpler solutions in a single market, I think that it’s going to be a harder and harder business over the coming 18 months – as customers want to do more, they want to use the more innovative solutions and if you’re not able to invest to build those, I think it’s going to be a really hard sell.’

In comparison, he says that the new Masternaut Group can boast the size and scale to capably tackle what they believe is a growing market. And as such the firm will be able to innovate faster, offer increased geographic reach, improved industry standards and compelling opportunities for improved business performance.

According to Mr Henry, there are three key drivers behind the tie-up between Cybit and Masternaut:

‘The first one is that by putting the two companies together we have a great product set – independently we both have strong product sets but we put them together and we have a really great product set for our customers and it gives us something to go talk to every single customer about. It’s the opportunity to cross-sell each other’s products to our existing customer base.’

He adds that the new company is not looking to discontinue products from either firm but instead fuse the product capabilities together over time and to offer improved capabilities.

The second key influence of the deal between the two firms is the pan-European reach. ‘That’s very unusual in the telematics industry, which is mostly comprised of regional players,’ Mr Henry explains. ‘In the past we’ve seen companies that have different telematics providers in those different locations because they couldn’t find one firm that could support them across all the locations. We can now solve that problem.’

In fact, the combined Cybit and Masternaut operations support a 10,000-strong customer base across 32 countries, giving a strong base for expansion. But Mr Henry is resolute that, for now, developments will be concentrated within Europe.

‘The focus for the immediate future is basically Europe and as opportunities present themselves we’ll look at going further than that.

‘We’ve got great coverage in Europe but there’s also huge opportunity and I don’t want to do something speculative in another geography and not make sure we take full opportunity we have here in Europe.’

The final driver for the merger of Cybit and Masternaut is the size of the business. Mr Henry says: ‘So we have over 500 employees with over 100 in the R&D team – what that gives us a lot of energy and excitement about is that we’re going to be able to out-innovate everybody else in the industry. So we’ll be able to bring to market exciting new solutions at a faster pace than anybody else and that’s going to again further distance us from the rest of the market.’

So what direction could future products take?

‘One of the exciting trends that we see is driver behaviour,’ says Mr Henry. ‘This is something that both companies have been working on and delivering solutions around. But that’s going to be an area where we’re going to invest more time and money to produce the next iteration or the next release of products that are a big step forwards. This whole concept of driver behaviour and providing tools to help drivers drive more efficiently and in a safer manner is more important.

‘Another key area is really about providing real-time information to manage your fleet delivered to you in an environment where you can interact and deal with it in that time. What I mean by that is that you can get all this information through our web portal but we can also email it to you, we’ve got iPhone Apps where we can also deliver this information to your iPhone so you can see in real time what’s happening with your fleet and manage it accordingly.

‘And then another key area that we’re really excited about is our ability to do integration into customers’ systems and to do it through a set of APIs that we use that allow customers to use this information – that maybe in the past was just used by the fleet team – but use it much more broadly across the organisation to drive improvements and efficiency for the entire business.’

Masternaut also says that future growth drivers will include the take-up of vehicle telematics by the insurance industry – as a tool to manage road risk – and work with OEMs. And it adds that it believes it’s the only European telematics provider with the potential to embed the technology into more industries.   

Mr Henry says: ‘It’s interesting that there’s been lots of discussions but very little that’s been announced and I think one of the things that has held the industry back is there hasn’t been a clear European leader in this telematics market up to this point. So a lot of these announcements are based on needing to be the pan-European leader and I think that now we’ve announced this transaction, we’re stepping into that role.’

He adds: ‘There’s a really exciting opportunity to do a lot of creative types of relationships – could be with the OEMs, could be with the insurance companies – and I think a lot of really exciting things will happen over the next 9-12 months.’