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SaaS Suits Fluensee for RFID Solution Sales

Offering customers the option of using software as a service (SaaS) is helping Fluensee get new business. The RFID solutions provider focused on specific types of asset tracking expects sales to triple this year and is even winning business in distressed industries.
Jun 10, 2009This article was originally published by RFID Update.

June 10, 2009—Bringing an emerging delivery model to an established market for RFID solutions has proven to be a successful formula for Fluensee, which projects it will triple its revenues this year compared to last. Like many companies, Fluensee is focused on asset tracking opportunities. Unlike most, it has a software-as-a-service (SaaS) option for delivering solutions. SaaS, which does not require customers to make a large initial spend to purchase and license software, has proven popular this year as organizations have limited cash available to invest in new systems.

"Lately we've seen as much acceptance of software-as-a-service as we'd seen in the past two years. It used to be about 10 percent of customers asked us about SaaS. Now 40 to 50 percent are talking to us about it," Fluensee president and CEO Tim Harvie told RFID Update.

Fluensee specializes in helping customers manage specific types of assets, including laptops, data center IT equipment, beer kegs, trailers, synthetic rubber carriers and other reusable logistics containers. It provides a variety of tracking technologies for asset tracking, including passive and active RFID, sensors and GPS. All input technologies Fluensee integrates feed data to its two platform software products, Fluensee AssetTrack and Fluensee Yard.

SaaS may be the right option at the right time for cash-challenged businesses that nonetheless need to invest to improve efficiency, but Fluensee believes the software itself, not the delivery model, is the real reason behind the company's success. Fluensee's origins are in software development. The privately held Denver company was formed in 2005 by the breakup of its predecessor, Vizional Technologies. Vizional was founded in 1999 and developed software to integrate RFID into supply chain and logistics operations, and used the SaaS model. It's largest customer was Maersk Data Services, which was eventually acquired by IBM. Harvie, who was Vizional's president and CEO, then put together a group of executives and investors who acquired Vizional's key technology. They refocused Vizional's software platform for asset management, and formed Fluensee in 2005.

"Our secret sauce is our asset management software. That's really what we're all about," said Harvie. "We stick to our core markets and believe we understand what customers need more than anyone else."

Last year Fluensee acquired TrenStar (see Fluensee Acquires TrenStar's RFID Software Business), which also developed RFID-based asset tracking solutions and offered a SaaS option. The acquisition eliminated a competitor in some markets and added expertise in complementary ones, including the beverage, oil, mining and manufacturing industries.

The TrenStar acquisition and expanded SaaS offering are helping fuel Fluensee's current growth. Fluensee's pipeline of business opportunity has grown 500 percent since last September -- shortly after the TrenStar deal closed and right around the time general business conditions crashed.

"Companies want to save money without spending a lot," said Harvie. "When times are good it's difficult to switch companies off of how they're used to buying software and solutions because they have good capital budgets. Lately we've seen a much, much greater trend toward SaaS," -- especially in the logistics, automotive and high-technology manufacturing industries, he said.

Harvie has worked in the logistics and RFID industries for more than 20 years. At a time when many executives are saying business conditions are the worst they've ever seen, Harvie says the past 11 months have been the best he's ever experienced for RFID.

"We've seen companies that are laying off 1,400 people still placing new orders with us for tags to track their laptops," Harvie said. "I said 'Why would you need more if you just laid off 1,400 people?' Companies are saying to us 'We know we have a problem keeping track of our assets.'"
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