15 Years Later: Why Now is the Right Time to Transform Our Business
I vividly remember when we were deciding to spin-off from Microsoft. Despite the chaos and pressure of walking away from a job I loved to start something ‘new’, I was invigorated by the potential to completely disrupt the transportation industry. Instead of getting traffic information from helicopters, which was the norm at the time, we were going to use GPS signals and Big Data to create global traffic information and help people navigate congestion.
Throughout our 15-year history, INRIX has been at the forefront of the mobility revolution having witnessed some of the industry’s brightest innovations and boldest transformations.
In 2005, buzzwords such as connected cars, over-the-air updates, and Big Data were just ideas. Smart phones and the Internet of things (IoT) didn’t really exist, Twitter hadn’t been introduced, and YouTube and Facebook had just launched.
But it was in that year we pioneered the game-changing approach to leverage GPS to create global traffic data. Despite being mocked, ridiculed and written off by the industry for years, we succeeded in fundamentally changing the way traffic data was collected and dispersed, globally. We accomplished this by processing massive amounts of real-time data in an era when there was no AWS, cloud computing or predictive analytics. To put in perspective, the 800-pound gorilla in the traffic industry was Westwood One who was flying helicopters, and they don’t even exist anymore!
We succeeded because we were able to predict 5-10 years ahead and understand how the market would evolve while simultaneously identifying what our customers would need – usually before they even knew it themselves.
This approach led us to transform our business from ideation to realization – from a niche traffic data supplier to a leading provider of connected car services and transportation analytics with hundreds of customers and services in nearly 150 countries today. We then transformed our business beyond the automotive space to reach the public sector and enterprise industries as well.
Yet all of these years later, INRIX needs to transform again – and use SaaS as our north star to continue to grow and evolve to meet the market for the next decade.
Why the transition?
It’s no secret that the world around us is changing. Technological advances in IoT, AI and automation have created the largest shift in consumer behavior we’ve ever seen – from the way people and goods get from point A to point B, to the way we consume information, and the way people order products and services. Convenience is at the very heart of it, and it’s shaking up every industry.
Let’s take the automotive industry for example. Over the last several years, we’ve seen the convergence of the automobile and the information technology industries. CES became the most important car show of the year. This created a plethora of new entrants in an industry that’s traditionally been dominated by conventional automakers and suppliers for over 100 years. Tesla challenged the status quo of the automotive industry’s historic roots with the introduction of the electric drivetrain and OTA software updates. Then came Google Automotive Services (GAS), an ecosystem that embeds applications such as Google Play Store, Google Maps and Google Assistant directly into dashboards, enabling consumers to access these features directly through their vehicle. Many of the largest automakers (GM, Volvo, Renault) have already announced their move to this platform. Even Apple and Amazon have entered the space with mirroring capabilities. And the list keeps growing.
What exactly does this mean? As vehicles become increasingly sophisticated due to expanding consumer demands, the traditional ecosystem of navigation, mapping and hardware companies is fundamentally threatened. Technology companies like Google, who want to replace the traditional head-unit stack, will take the majority of the automotive in-dash software market, leaving a shrinking business for anyone whose primary business is selling into this market. I have first-hand experience having been the General Manager of Microsoft’s Automotive business when we were trying to do just this.
A good friend of mine who was a very successful entrepreneur and venture capitalist once said, “Innovation is like surfing – if you hit the wave too soon, you get crushed by the wave because you’re in front of it. If you hit the wave too late, you can paddle as hard as you want but you’ll never catch up. But if you hit the wave just right – it’s a sweet ride.” And he’s right. Microsoft was too early and gave up; Google has hit the wave just right.
But it doesn’t stop with the automotive industry. The impact of technology and Big Data is being felt across all sectors, and for good reason. It’s the backbone of every successful organization and without it, roads, cities and businesses would grind to a halt. It holds the keys to massive benefits – from monetization to agile decision making to data-driven marketing.
For INRIX, this means we must transition away from our existing Data-as-a-Service (DaaS) products and double down on our Software-as-a-Service (SaaS) offerings, especially within public sector and enterprise markets. There are many benefits to making our services available through SaaS, most of which boil down to helping our customers get powerful insights anywhere, anytime as easily as possible.
The world was changing long before 2020, but the pandemic has impacted nearly every industry across the globe, disrupted global supply chains and forced companies to rethink their traditional ways of doing business entirely. Think about it: closing a deal no longer means meeting face-to-face; designing a new feature no longer requires a conference room and a whiteboard. While there’s no way we could have predicted a global health crisis, we’re fortunate to have already been preparing for the transformation of our company.
In fact, we’ve been laying the SaaS groundwork for several years now. INRIX Road Rules, INRIX Roadway Analytics and INRIX Trip Trends have been providing incredible insights to hundreds of customers worldwide – all of which are now part of our unified SaaS application suite, INRIX IQ. Even more valuable in today’s post-COVID world, INRIX IQ makes it easy for anyone to uncover insights from location-based data. As organizations shift to remote operations, face budget cuts and tackle extreme uncertainty, INRIX IQ provides a safer, smarter, faster and more affordable alternative to traditional methods of data collection, management and analysis.
Proof (and revenue) is in the data
While our automotive products currently account for a third of our business (down from 66% just 5 years ago), our SaaS portfolio of tools have seen a ~30% CAGR over the same period. In fact, our SaaS offerings now account for about a third of our total company revenue and have been dramatically increasing.
The first product launched under our SaaS model – Roadway Analytics – provides near real-time insights into what is happening on roads, benchmarks and measures roadway performance, and maximizes the investment of public funds. In just four years since its inception, hundreds of local, state and federal organizations across the globe have leveraged this platform to monitor, measure and manage their roadways.
In 2018, we launched Road Rules – the first SaaS application that lays the foundation for connected mobility by helping cities digitize, manage and communicate the rules of the roadways, curbs and sidewalks. To date, more than 40 cities and six operators are using Road Rules to ensure safe and efficient mobility.
Realizing the significant impact COVID-19 would have on our roadways, we launched Trip Trends, which provides powerful insights on passenger, heavy freight and local fleet travel trends in the U.S. and Europe.
As a company, we are committed to improving mobility worldwide by connecting people, vehicles, cities and businesses. That is our mission. INRIX IQ plays a critical role in this goal, making insights from trillions of complex data points more accessible and easier to understand.
In the coming weeks and months, we plan to add exciting new features to INRIX IQ and launch new applications that will help our customers do more with our data and make them more productive. The transportation industry is on the cusp of moving from manual and physical data collection methods that have historically been required to make informed decisions to the sorts of no-hardware-required data solutions that INRIX can provide access to.
The launch of INRIX IQ, with its trial and self-serve capabilities, will allow us to serve market segments that we previously didn’t address through our traditional outbound sales model. We are betting that we can streamline customer acquisition and deliver growing value to a broader audience. This strategy doesn’t replace our current business model, but rather augments what we do with our large strategic customers, and broadens the overall addressable market for us at INRIX.
For years, we’ve helped the world’s most innovative automakers, transportation agencies and businesses take advantage of location-based intelligence. Now we’re building on that commitment to make these insights more accessible and easier to comprehend for everyone – from interns to traffic engineers to CEOs.
This is arguably one of the most challenging, yet rewarding, times to be part of the transportation revolution. And 15 years later, I’m excited we’re still in the driver’s seat to help drive this transformation.