There are sectors of industry that have made their entry into the world of technology very recently. Often, these sectors leapfrogged all the prior architectures and have come straight onto the cloud. Partly, this is because of the cost structure of prior architectures that they could not afford. The cloud is bringing many such industries into the age of modern technology at a furious pace. Chris Sullens talks about one such corner of an old-fashioned industry that is now modernizing.
Sramana Mitra: Let’s start by introducing our audience to you and Marathon Data Systems. What do you do? What’s the business?
Chris Sullens: I’m President and CEO of Marathon Data Systems. We’re a leading provider of cloud-based mobile workforce solutions for the field service and transportation industry. In the field service side, we have an end-to-end business management platform that spans everything >>>
Sramana Mitra: I don’t agree with that at all. We cover e-commerce extensively. I think there’s going to be tons of new brands being built. It’s like how retail and specialty retail have evolved for decades and decades. There are always new brands and user experiences. I think e-commerce will continue to build interesting businesses and there will be new brands and businesses being built. Your point though is true that people who were interacting more through web channels are going to move to mobile devices, that’s correct. But I think the statement that you made about there not being as many opportunities for businesses being built, I don’t agree with that.
Steve Wadsworth: I don’t disagree with anything you just said. I’d be crazy to imply that there’s not opportunity. There’s always opportunities for new businesses particularly when there’s a shift in the paradigm to something like mobile. >>>
Steve Wadsworth: There are two reasons why some of the other apps may not get the same level of traction. One is user interest. Games are universal. You get much more user engagement there. Secondly, I think a number of app publishers are leaving money on the table because of the model they’ve chosen. Let us look at the magazine business. Historically, their offline model has been advertising and subscriptions. They’ve moved online and to mobile with the same model. While subscriptions is a form of freemium model for monetization, it’s a highly limited model because you’re asking the user to make a very large decision. >>>
Steve Wadsworth: What our analytics is able to do is watch the user behavior in the app, and based on that behavior assess very quickly which bucket a user falls into. We then use predictive analytics to classify users. We also have engagement tools in that same solution that will provide the publisher the opportunity to further engage any given segment and drive them to monetization either through advertising or in-app purchase. That’s where this ends up going. It’s sophisticated but the freemium model requires that as each user is going to behave slightly differently. You need a sophisticated modeling and analytics capability to understand the behavior of your users, put them >>>
Sramana Mitra: In your user base, how does that behavior split in those three categories? People who are legitimate free riders, people who are willing to look at advertisements, and people who are actually buying stuff.
Steve Wadsworth: It depends on many things. It depends on the publisher and how they implement the advertising proposition. At a very high level, in aggregate, maybe 4% to 5% of that user base ever purchases anything. Usually, for majority of them, it’s once. On the ad side of it, that side is growing as more and more publishers realize that the pure in-app models is not fully valuing what they’ve created. It’s increasing but I’d say 5% to 10% of people in our user base are engaging in >>>
Sramana Mitra: In the broad categorization that you just made, other than energy savings applications and then the off-shoots of energy savings, what are some of the other buckets of enterprise IoT?
Danny Yu: How to think about this is look at whose problems are we solving. We can talk about technology and effectively the technology can handle security and other things. There are standards-based products for these elements here. As an example, there are security-based access controls using open standards that would work on our platform. These are obvious extensions that inherently could be implemented.
Sramana Mitra: Who else besides Enlighted falls in that pool?
Danny Yu: We don’t compete with some of the companies directly. There’s a company called Digital Lumens that sells fixtures and controls. We, on the other hand, don’t sell the fixtures but sell the controls and the software. They sell this bundled solution where they offer their fixtures and their control system as well as the ability to connect with another fixture, but you require their proprietary end-device to go into that.
Sramana Mitra: I imagine that, just like you, everybody else in the space goes to market through channel.
Sramana Mitra: You’ve already crossed $5 million revenue. Why did you raise money from Accel India?
Nenshad Bardoliwalla: Two of the four founders are actually Indian, but that’s honestly incidental. Prakash and Dinesh have known each other since 1999.
Sramana Mitra: I can see why Dinesh would be interested in something like this. I’m just surprised by the structure. Accel Partner India was set up to fund venture in India. It’s a bit odd.