Enterprise Mobility & Connected Devices Blog

Consolidating in Transportation Market - Trimble Acquires TMW Systems for $335M

On Monday, Trimble announced its agreement to acquire TMW Systems, a vendor offering transportation and logistics software, for $335 million in cash.  The two companies have worked closely in the past, integrating their solutions for many customers – this acquisition will see Trimble expand the overall reach of TMW’s transportation management software to its global customer base. 

 Over the past few years, transportation and logistics firms worldwide have struggled with decreased demand, challenges reaching full capacity, and increasing volatility in fuel prices.  These variables have weakened profitability for many vendors, driving substantial industry consolidation.  This has been especially notable in the trucking space (largely dominated by owner-operator firms), where we are seeing smaller companies struggle to remain profitable, with many exiting the market or facing acquisition. 

 In July of last year, Trimble announced a similar acquisition, purchasing fleet management vendor PeopleNet, a provider of onboard computing and mobile communications technologies for transportation and logistics firms in North America. Trimble’s acquisition history suggests the company is intent upon developing a strong portfolio of transportation solutions to serve a global audience.  The company’s purchases of companies including Punch Telematix in Europe and Tata AutoComp Mobility Telematics in 2010 provide strong support for this argument.  Given the evolving landscape of governmental and regulatory hurdles facing transportation organizations across the world, having a clear understanding of customers’ regional-specific requirements is critical. 

 While transportation companies are looking hard for opportunities to cut costs, mobile technology investment will not be a primary target for most organizations.  The potential cost benefits in productivity and time-savings far outweigh the investment required for transportation vendors looking to mobilize their workforce.  With software vendors increasingly employing a subscription-based pricing model, the transportation market is due to see continued strong investment in mobile technologies.

 These issues will be explored further in VDC Research’s Transportation, Logistics, & Warehousing report – due to publish in August 2012. 

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