Quake Global exhibited their M2M products for asset monitoring and tracking at CTIA Wireless in Orlando last month. After the show, TelecomEngine caught up with Quake Global VP of Sales and Marketing, Ken Connor, to learn more about how the company differentiates itself in the asset tracking market and gain some insights on the future of M2M.
TelecomEngine: Quake claims to be the only manufacturer of “network agnostic” modems, but certainly others make that claim. Who do you see as major competitors?
Ken Connor: We prefer to focus on the strengths of Quake Global and let other firms support any claims they might make. To the best of my knowledge there is no other vendor except Quake who is in production on a modem that has options for the various satellite networks. With Quake you have one common footprint, one embedded application and one communication protocol that allow our customers to address multiple markets, price points and communication requirements.
Most people would agree that the technology involved in asset-tracking is not really cutting-edge -- it has been around for a while. What about your systems makes them stand out?
Connor: Please understand that when most people say they support satellite tracking, they are speaking of using GPS to obtain location data only. What makes the Quake communicators stand out is that they use low earth orbit satellites to support two-way communications between the user and the remote asset. This is in fact cutting-edge technology and to produce a product that can communicate in any environment from any point on the globe is far from easy. Our modems can operate off small batteries yet send data around the globe. We have a full team of advanced engineers who work tirelessly to deliver this technology to our customers who will be happy to tell you it is not easy!
Can you describe your sales channels? Obviously, you work with any number of satellite and network operators (Orbcomm, Iridium, Telenor, T-Mobile). Do they typically drive your sales? Or is it a systems integrator? If the latter, who would they be?
Connor: Quake Global sells our product through our OEM, Representative and Distribution channels. Our primary customers are OEMs and System Integrators. Every one of these entities is important to driving our sales. Certainly our satellite network partners are critical to our success (as we are to theirs). Quake has very strong relationships; our network partners and our sales teams work well together. Ultimately it is my responsibility to drive sales and take advantage of all of these partners and channels.
Is every project different, or can you sell anything off-the-shelf, at this point?
Connor: Quake has a wide variety of products from simple modems to complete intelligent communicators. In general our customers add their value by the integration of our modems into their solutions through a combination of hardware, embedded software and back end applications. While our dual-mode Q-PRO is inside a rugged environmentally sealed enclosure that is mechanically and electrically fully ready for deployment most of our customer choose to include their own custom application and the server back end. We appreciate their expertise and we do not try to compete with our customers. If an end customer needs a complete solution we usually have one or more partners in our ecosystem that can assist them.
You've gone from $1 million in sales in '03 to over $20 million today. It seems like the brunt of your sales is in vehicles/transportation. But you also mention BP as a customer on your website. Can you give some examples of non-transportation deployments?
Connor: Our CEO, Polina Braunstein, had the vision to take a tiny company with one product and lead us to success. At that stage it was important to try to focus and conserve resources. She identified the heavy equipment market as the best prospect for growth and worked for 5 years to identify and deliver a product that met their unfilled need.
Quake continues to be a leader in this market but has expanded in many other areas of both fixed and mobile applications including Oil and Gas, Environmental, Defense and Marine. We invest millions to develop our hardware solution and our customers benefit as a result of our large production scale. They get to market quickly with minimal investment on hardware. With our flexible hardware platform our clients are able to focus their resources on integration of other hardware and software to deliver market specific solutions to their customer. Many of these are brand new solutions to old problems made possible by the teamwork between Quake and our customers.
People are often wondering where volumes will come from in M2M. How big are these non-transportation deployments? Are they, say, over 100K units?
Connor: I am sure none of our competitors would have interest in this information, but just in case, we prefer not to discuss unit volumes. While the potential unit volumes for satellite modems are certainly not on the same scale as cellular, with the advent of dual-mode solutions such as our Q4000 and Q-PRO, we are experiencing some sizable volume opportunities.
Our customers need to differentiate their solutions and satellite communication is a clear advantage in many applications. Even within the US borders there is not 100% cellular coverage, and the problem only gets worse as you move around the globe. We have enabled many customers to sell their products globally and exponentially expand their own revenue. So we think Quake has a very bright future.
Where do you see volumes coming from in the future, as in which industry segment… do you get involved in healthcare, for example?
Connor: Currently healthcare is not a strong growth opportunity for satellite as the current satellite solutions require a view of the sky. In many other segments there have been and will continue to be growth for machine to machine communication. We have two or three key industry segments in our sights.
Same question for geographic region: Is Asia coming on quickly, or still several years off for this kind of technology? How do your sales break down geographically?
Connor: It is difficult to talk quantitatively about geographic break down, as the only numbers we can really track are based upon where we ship our modems. This can be vastly different than where they are deployed. Quake has a global customer base and over 50% of our modems are used outside of the US, but we are also seeing strong growth in domestic sales. With the movement of trucks between Mexico, US and Canada the need for our modems continues to increase.
We have a strong business in virtually every geographical area as our success is based upon the fact that it is a global economy and our modems work globally. We may ship to an irrigation equipment supplier in Australia and they deploy in Africa or we support a heavy equipment customer in Korea with the modem activated in the US. To continue our growth we focus on each customer's requirements and not on the geography. We have multiple examples of two customers in the same market who want entirely different solutions. This ties back to the reason we support multiple satellite networks and offer such a flexible product. There are some huge populations that have enormous appetites for M2M satellite communications such as India, Russian and China and you can be assured our partners and Quake will be there with solutions.
What impact will the proposed AT&T/T-Mobile merger have on the M2M industry? Or, if you cannot comment specifically on this merger, then in general how do you see the landscape of carrier consolidation playing out in M2M?
Connor: Quake is focused on satellite communications and we consider cellular to be an “accessory” to our device. We don't spend much time focused on the terrestrial carrier consolidation as we certainly are not going to have any influence on that. However, it does reinforce our case that our satellite networks are stable and will be there for our customer and working long after their asset has been deployed. No SIM cards, no roaming, no obsolesce of AMPS, 2G or whatever. That is important if you need to deploy 10,000 units and have them operating trouble-free 7 years later.
Regarding the shift from 2G to 4G, is it worth investing time or resources in 3G or should the industry be focused on moving to 4G? What about supporting the various standards along the way and in the future?
Connor: Our customers are typically only sending small packets of data, some as small as 6 bytes and many would consider 200 bytes to be a large file. Most carriers are happy to support GPRS well into the future but as new standards evolve on the terrestrial side QUAKE will listen to our customers and include the most appropriate cellular technology.
What is more interesting to QUAKE and our customers is that our satellite partners are ALL launching new constellations that are 100% backward compatible with existing hardware and services. They will offer improved bandwidth, lower latency and new services that will be supported by QUAKE's superior communicators. By continuing to listen to our customers, cooperate with our partners, innovate with our technology and offer an exceptionally reliable product QUAKE will continue to maintain our dominate share of the M2M satellite data market.
Historically, network infrastructure is the most expensive component in a mobile operator's overall CAPEX, which holds true in China, the biggest and fastest growing 4G market in the world. This report provides an in-depth overview of market revenue, equipment shipments, and the competitive landscape for carriers. Buy now