HOW DO YOU DOMINATE THE PRIVATE TRUCKING INDUSTRY USING M2M TECHNOLOGY?

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1 HOW DO YOU DOMINATE THE PRIVATE TRUCKING INDUSTRY USING M2M TECHNOLOGY? We sat down with Tom Flies, Senior Vice President of Product Management at XATA Corporation, to discuss how innovation and collaboration have helped his company become the clear market leader when it comes to tracking truck fleets and their cargo. Here s what he had to say.

2 Can you give us an overview of XATA s solution and how it works? XATA is in the business of helping companies optimize their trucking fleets that dramatically reduces operating costs, complies with regulatory standards, improves customer service, and ensures on-time delivery. The company was founded in 1985, and we were the first to offer completely paperless electronic logs. We were also the first to provide operationsexceptions reporting and fleet-related benchmarks, called learned standards. What was the inspiration that led to your latest industry-changing fleet management solution? Back in the 80s, drivers transferred important truck and delivery information from the cab to the office (or domicile) with a small, electronic key, similar to today s USB drives. At the end of the day, drivers would upload their information to the office and fleet managers could get a report on the day s activity. As we got into the early 90s, more and more fleets wanted greater transit visibility. They wanted to actually get updates on what was happening in real-time, on the road during the day, so they could better ensure on-time deliveries. One of the reasons we were interested in Sprint was the fact that they were the first all-digital network that reached nationwide. With advances in technology and networks, we knew a wireless solution was not only possible, but a necessity. So we made a commitment to meeting this customer need, and today we offer a leading web-based solution that helps fleet managers wirelessly monitor and manage their trucks and cargo, anytime, anywhere in the United States. What separates XATA from other solutions? Our differentiation is really in the value we provide through our fleet performance management reporting tools, our software-as a-service (SaaS) delivery model and our professional services. We give our customers the ability to collect information from a truck and a driver, and make that information available in real-time or in specific and detailed trend reports. This information helps carriers bring down costs while improving customer service. With some traditional carriers, as soon as the truck leaves the loading dock, the company has no visibility into what s happening with the delivered goods, which can be very risky. What XATA does is connect data from the drivers and trucks to the back office, throughout the entire delivery process. What made you decide to partner with Sprint? When we were looking at wireless providers, we considered and researched the entire market. One of the reasons we were interested in Sprint was that they were the first all-digital network that reached nationwide. They were a provider with a coast-tocoast footprint and a network that was built on great technology: CDMA, versus other competing technologies. We knew that we needed a reliable way to gather and deliver fleet information coast-to-coast. And,

3 we wanted to deal only with one network provider and have one common billing system, which now seems pretty trivial, but back in the early 2000s, competitors to Sprint were going through consolidation and didn t have a way to provide a single, monthly bill for services. What we did together was very pioneering. It required tons of upfront testing In the end, it came down to XATA thinking that Sprint had the best technology available and the best ability to deliver the service we needed across the entire country. How did Sprint share your vision and help you grow? Originally, we had contacted Sprint in 2001 when we were looking for data services, and at that time, they were starting to explore some very interesting avenues in wireless data applications and technology. So we kept in contact with them, and as soon as they had developed a program for the entire wireless data market, we got down to business. What we did together was very pioneering. It required tons of upfront testing figuring out the amount of information we d be using and the amount of data we d be sending over the network. Sprint truly worked with us to come up with pricing plans that made sense, based on the software applications that we were delivering to our customers. It was extremely collaborative, and our Sprint partners worked with us to dial in the right combination of price and packaging for our customers and us. What were some of the major roadblocks you tackled together with Sprint? We had to shift the thinking from per-minute billing to a monthly flat fee when it came to wireless data. Also, from a technology standpoint, with Sprint using CDMA and pioneering use of the 1xRTT standard, we were able to work together to create an application that performed extra new tasks, such as updating software in the trucks, anytime, day or night, without driver intervention. The network s performance was critical to the overall experience for our customers. And Sprint was well positioned with the best technology and the network experience to deliver exactly what we needed. So, Sprint really helped solve a major issue your company was facing, and, in turn, furthered your company s overall performance? Yes, the biggest problem they helped us solve was what I touched on earlier. The ability to update software in the trucks is by no means a trivial thing. Historically, if a truck had a problem, we literally had to fly out to wherever the truck was and load software, or have the customer go into the truck and hook a laptop up to the unit and load software. What Sprint allowed us to do is to download that software wirelessly and not have to touch the truck, either from a XATA standpoint or from a customer standpoint. It gave us the ability to be more nimble and to roll out new applications to customers faster. Plus, we could provide more options to customers and give them the choice of piloting or purchasing an application. This dramatically increased the velocity of our development and our business overall by being able to solve the problem with

4 A lot of things come down to price in the negotiation process. How did that work with Sprint? Historically, in trucking, it used to be that pricing was based more on communication charges and messaging. Companies would be billed a monthly fee and they d also be billed for messages and data bytes. Our approach is rather unique, where our software-as-a-service (SaaS) bundles wireless airtime into one, flat, monthly fee. So it was an all-in-one package for And we worked with them, looking at the size of our customer base and determining what it would take to drive adoption and acceptance in the market. Because we were both in pioneering mode at the time, there was no formal program in place. So we collaborated to develop the pricing together. I have to be honest and say, of course, that we took a look at all the major wireless carriers calling on us, given our size and the number of subscribers we have in the space. But we got a lot more than just the right price with Their ability to be kindred innovators, to work closely with us and really respond to our needs and yet still be flexible has been essential to our success. We know that if we have a challenge, Sprint is willing to work with us, and, as a result, the negotiation process has really been pretty much painless. When it comes to working with Sprint, what s the biggest benefit to your customers? The biggest thing is visibility. It s helping our customers differentiate themselves in the marketplace. Our partnership with Sprint has given our customers the power to know exactly what s happening with their own customers and that s really improved those relationships in a substantial way. Thanks to Sprint and the work we ve done at XATA, our customers are able to go into their fleet performance reporting tools and show on-time delivery, and they re able to send their performancebased metrics right to the customer, in real-time. When a truck pulls up to the loading dock, our customer s customer has already been notified that a shipment is minutes away, so that they can have the dock cleared and ready for a quick unloading process. As a result, our customers have the ability to provide a much higher level of service to their own customers. Has this partnership helped you transform your business? Absolutely. We were the first company to hook up to the new electronic engines that came out in 1989 and to collect detailed information on diagnostic warnings, engine alerts and fuel economy, which had a major impact on fleet optimization capabilities. But it wasn t until our relationship with Sprint that we were able to add the third leg, which is the customer service aspect. So now we can help our customers on the road, in the cab and at the delivery dock. How has Sprint helped you remain competitive in your market? Our market, like any industry, is extremely competitive now. There are a number of new competitors, and the main players in the market are still in the game. Regardless of market conditions, XATA remains the undisputed leader in the private fleet space. We ve seen more and more companies showing interest and buying our solution over the past two to three years, especially from a feature-function and price standpoint, mainly due to the technology that s available now.

5 And being able to deliver superior service and performance sets us head and shoulders above all others. What does your partnership with Sprint hold for the future? What s next? Sprint really gives us a competitive advantage. We ve been able to hit milestones based on data volumes, how we ve performed and how Sprint has performed. It s allowed us to get a leg up in the market. Today, we have the largest market share of the nation s largest 100 private fleets. We ve doubled our subscribers over the past three years, which is huge if you think about the economy and where it has been. And XATA still isn t slowing, rather, we re continuing to expand into a wider market Sprint and the logo are trademarks of All other trademarks are the property of their respective owners. Ranked a top 100 company by M2M Magazine Use a QR Code app and made real. scan or text SCAN to

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