Hardware is very often a commodity, or basically the cost of doing business. A good comparison here is ROKU, it’s not about the box that’s connected to the TV, the value comes in via their “TV operating system”. In Samsara’s case it’s their “operations cloud” which delivers the value/ROI to their customers. If Samsara could plug into existing hardware, that actually would be a net positive, and increase margins. The customer buying the “operations cloud” would still get the exact same value (provided the hardware is compatible and supports all functionality). Samsara could certainly do both, supply some or all hardware components and integrate with existing hardware.
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I have the same thinking as you, the hardware is not difficult, and there are some single-solution in the market now, but no one has a basic platform to analyze their different assets.
I worry about it if customers don’t need their device, they just depend on OEM or partnership which means they can’t keep the key data, the OEM or partnership also can sell data to another competitor of IOT, if the single-solution competitor wants to build a same platform as IOT they can buy the data.
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IMO the Samsara hardware will be used for the foreseeable future, it’s way easier to add their own device, instead of relying on various OEM integrations.
It’s not practical for a company that has a fleet of vehicles to be dependent on any single OEM - even if you believe an OEM could provide the hardware.
And as far as the “operations cloud” goes, it seems like Samsara is leading the market in a very big way - so it’s kind of hypothetical to contemplate who could do what if they had access to the data from the hardware that presently only exists from Samsara.
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I agree with Smorg; here is how I think about Samsara vs. competitors:
Competitors deliver:
- Piecemeal solutions, that
- You have to curate, assemble, and integrate yourself, including
- Determining your own business processes and back-end database structues
Assuming you can get all that done, you are still starting from “ground zero” in terms of if/when you’ll get an ROI, and in any case you don’t have any foundation of data, and data structures, to build on.
Samsara delivers:
- A proven, turnkey solution, with
- A (by comparison) very predictable ROI
Samsara, via its past customers, has already determined the highest-impact business use cases, and the corresponding business processes that actually work. They have already established, via LOTS of trial/error from past customers, what data to collect, what database structures to put it in and how to use it effectively.
…which to me sounds A LOT like the most successful companies we discuss here: $NET, $CRWD, $NVDA etc etc. They deliver end-to-end solutions with easy-to-understand benefits and proven ROI.
If you were in charge of making the decision, and had to report the eventual results to YOUR boss, which would you go with:
- An internal MacGyver-it-yourself with a (relatively) unpredictable project cost, project completion date, cost and ROI , or
- A proven end-to-end solution where you’ll be following a path already proven out by lots of other organizations and with (relatively) narrowly-defined costs, project completion date and ROI
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I completely agree with @Smorgasbord1 and others that hardware is commodized, and as @intjudo just pointed out, there are a ton of point products out there in fleet mgmt.
The way I think about their turnkey hardware is that its simplicity was what jump started their success in IOT visibility and analytics. It’s turnkey, easy to install and hook into their cloud service, and gave near instant ROI.
From there, they began leveraging that solution into other areas that were powered by more turnkey hardware stacks (video safety, equip monitoring, site viz). I DON’T SEE THIS MENTIONED MUCH IN THIS THREAD. Being an overarching platform that can not only handle veh fleets but also add safety, and equip, and site viz. Look at the variety of wins and how they adopt those modules – there is something in there for every physical operation. As Saul pointed out, they are even veering into air carriers as major custs (not for airplanes themselves but all the surrounding vehicles and equipment – including American Airlines and what was likely Southwest Airlines mentioend last Q.
That multi-product platform has created a moat now, as an all-inclusive cloud platform that can provide viz & analytics over all those asset areas in one centralized place, which allows it to continue to close deals against a sea of commodized competitors with point products (fleet mgmt). This led to the “Connected Operations Cloud” angle they’ve been pushing heavily the past 2 years.
The immediate growth is from the land and expand across products & more assets, international moves, and focus on non-transport industries (that Saul was pointing out). From there, I see big new directions that I think propels that Connected Operations Cloud further.
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Less and less reliance on their hardware stacks, by pulling in OEM telemetry data (instead of their proprietary hardware), as well as API integrations with other 3rd party operations data (fleet maint, workforce HR/payroll, transport tracking, data warehouses, etc). This solidifies them as being stronger for overall visibilitity & analytics over multiple asset types in one centralized platform (vehicles AND driver safety AND equipment AND sites). I think these moves make it hard for the OEMs to compete, given how heterogenous these veh/equip fleets can be. This is where Smorg was going in that quote above.
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They are moving more and more into software driven solutions w/ Connected Forms, MEM, and Driver Workflows, which will be separately priced soon (as opposed to folded into the per-asset cost as it has been til now). I expect them to continue to expand their software-based solutions atop their platform from here.
-muji
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Personally, I see the availability of competing hardware devices as mostly irrelevant to Samsara’s ability to grow. There is a significant difference between simply having the pieces of hardware available and tying those devices into an integrated system at the scale of a major corporation or city government. Scale matters, large scale systems are difficult, and Samsara has proven they can provide significant benefits at large scale. A far bigger concern would be any competition who can prove they have the ability to provide a similar ability to scale to large business systems.
Another aspect of Samsara which I am certain is helping to drive growth is their strong focus on understanding the needs of their customers and developing new products to meet those needs. This can be seen in any earnings call transcript with statements such as, “We spent a lot of time out in the field talking to customers, understanding their business.” In my experience, this desire to understand the customer’s real needs is a rare quality in a company. By management’s own comments, this attitude is what has led to the large expansion in TAM, and I suspect it leads to loyalty from those customers.
I am more confident in Samsara than any company I have begun an investment in for quite a long time. At least, until something happens to prove otherwise… 
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Thanks Othalan, I couldn’t have said it better.
That was also an excellent analysis about the importance of understanding your customers needs, being able to scale, and tying it all into an integrated system.
Thanks,
Saul
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