Columnist Lee Schafer provides short takes on economic incentives and choices, business strategy and performance, market moves, what business leaders are saying and doing and other topics that pique his interest.

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"One Throat to Grab": the PeopleNet Strategy

Posted by: Lee Schafer Updated: September 14, 2012 - 1:42 PM

 A column in August discussed the new strategy of XRS Corp., which produces software to optimize truck fleet operations. The news was the shift away from any sort of XRS hardware, as XRS sought to become a software-as-a-service provider that ran its applications on consumer devices like an Android phone.

XRS management thought that the value was now almost exclusively in software and that its hardware was not worth updating. And besides, all the truckers carry a phone or tablet anyway.

In Minnetonka there is a head-to-head competitor called PeopleNet Communications, a unit of Trimble Navigation. PeopleNet was a long-time portfolio holding of Norwest Equity Partners, so it isn’t as well known locally as publicly traded XRS. And what’s interesting is that PeopleNet has a strategy that is 180 degrees from that of XRS.

Far from getting out of hardware, PeopleNet just last month announced a new device offering, ruggedized handhelds made by Intermec, a large producer of products such as bar-code scanners used in many different industries. 

PeopleNet president Brian McLaughlin has a simple explanation for this strategy: “For our customers, you get one neck to grab.”

Handheld freeze?  Call PeopleNet. Network down? Call PeopleNet.

 "This is mission-critical stuff,” he said. “Support is just so critical to our customers.”

 So support is really the differentiator, not the gadgets. But McLaughlin showed off quite a few, from a 7-inch tablet to one called BLU.2, which bolts to the dash of a truck. He also had software running on an iPad, but said it was for the backroom or dispatch office, not to have drivers take on the road.

 PeopleNet doesn’t design all-new hardware but links arms with makers of rugged, commercial-grade devices that are built to withstand the kind of use one would expect in the cabs of over-the-road trucks.

 McLaughlin said PeopleNet had about 200,000 users and will shortly be up to 300 employees, up by about a quarter in total staff since the 2011 acquisition by Trimble.

 McLaughlin did not even hint at any criticism of XRS for its new strategy, but by emphasizing PeopleNet’s hardware approach he did not have to.

 That’s why there is a market – and maybe both strategies win. 

      

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