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In an age when data is the new currency, Trackunit is super-rich. It tracks around 2 million items of construction equipment around the world, generating remarkable volumes of information, all available to be parceled up, analysed and actioned.

Add to that the promise offered by artificial intelligence (AI) to deepen that analysis and you can quickly see the potential opportunity for the business.

Soeren Brogaard, CEO of Trackunit. (Photo: Trackunit)

“Every dialogue we have with customers these days is centered around AI and data connectivity and data origination”, says Soeren Brogaard, Trackunit’s CEO, speaking to International Rental News by video conference, “and then what can it be used for in a generative AI context.”

Five years ago, the focus was on collecting data in the cloud; “So the conversation has changed to how can the data actually benefit from these new insights and AI capabilities that everyone is seeing in their private lives.

“We think we are in a good position to take advantage of it, because we are data generators, data originators.”

While Trackunit is developing the services that it offers its customers – with emission tracking capability being one recent innovation – it is also customers who are driving change.

“We don’t see it too much in the mid-market or smaller fleets or contractors”, says Brogaard, who joined Trackunit in 2016, “It is among the 50 largest rental companies, the 40 largest OEMs and the top 20 contractors. That’s where the action is, where people have sizable IT teams and have money to invest.”

‘The same question’
He says everyone is asking themselves the same questions; “How can data - and not just machine data - also the data that exists inside their infrastructure, CRM data, flow data, spatial systems, data on construction sites - when we pull all this together into one system, what are the insights?

“I’ve been calling it pace of learning. In the old days, the pace of learning consisted of great people, great processes and procedures, and systems that are still going to be there. But on top of that, we also now have AI, and we have these autonomous systems.”

Trackunit supplies its tracking units to Hilti. (Photo: Trackunit)

He thinks this ‘pace of learning’ will be the new competitive angle for businesses; “I think we find ourselves as a contributor to that. I would say we have 10 big projects where we are helping our customers, data scientists, leverage the Trackunit data with other data sources to build insights and solve business problems that we couldn’t solve just two or three years ago.”

He says AI will help accelerate decision-making “so that they can more quickly find the component that will fail in three weeks, more efficiently put the right equipment in the right depot, more efficiently help operators become safer”.

The company’s business is currently split between rental companies, who generate around 50% of revenues, followed by 35% with equipment OEMs and the rest with contractors.

“OEMs are still a good driver for growth because they are still trying to become more relevant to their end customers with better prediction of parts, better user experiences, and using data internally. And we see OEMs wanting to connect the machinery for the full life of the machine.

“Today, a lot of OEMs do it because the rental sector is asking them to do it. But very innovative OEMs – the Manitous, the Wacker Neusons - are progressing to keeping the connectivity through the first and the secondary owner of the equipment to keep that connection to the end customer.”

What’s coming next?
In terms of new developments, Brogaard says there is a lot going on with its data platform (more on that below), and investment in machine access control and emission reporting.

“So, it’s very much the similar themes, but going deeper, becoming more insightful. That is a big part of what we will continue to invest in. And many of these categories are just getting started and there’s so much richness in integrating it well into our customers workflows and processes.”

Emission tracking is one example. Trackunit has a dozen customers already using its solution and there is a “healthy pipeline” of potential users; “Some of our more advanced customers have been custom building this on their own…And we learned a lot from these early pioneers. We also saw that the industry really needed something that is more standardized.”

One aspect of this is to create a “data lake” of emissions information for benchmarking; “What should I expect in terms of this utilisation for this type of machine, for this type of job? It’s not just reporting, but there’s also a little bit of comparison going on and a set of recommendations on how to reduce emissions and quickly find the equipment that is outside the norm. It’s a super-hard problem because it’s across a lot of equipment, a lot of brands.”

He says one rental application is to help optimise transport; “We’ve had a couple of cases where we’ve reduced transportation cost by 25% by clearly indicating that depots were sending equipment way too far away.”

Operating data platform
In addition to AI and creating operational insights, one key aspect of Trackunit’s strategy is to position itself within the broader IT ecosystem of construction through the creation of an operating data platform (ODP).

“It’s a term that was coined by the analyst Gartner. They are predicting that operating data platforms - which is really a tailored industrial cloud - today deliver about 15% of a company’s data IT infrastructure. In 10 years, it’ll be more than 70%.

“Today we are highly specialized in off-highway vehicles, and to be the best ODP of the construction industry, you need to be extremely good at what you do. Otherwise, your differentiation and your value proposition disappear.”

He says machine insights are an important area for rental companies, contractors and OEMs. “So you don’t need to do a whole lot more. You actually need to be open and allow other systems to integrate with you.

Trackunit’s Kin device is designed for smaller items of tools and equipment. (Photo: Trackunit)

“A very natural integration would be to ERP rental systems or CRM systems, or the project planning systems, the spatial systems that you see on construction sites. You don’t need to develop that yourself. You need to make sure your data can easily integrate the data from these third-party systems. It’s about transparency, cybersecurity and scalability, done really well in a very niche space.”

He expands on the operating platform concept; “If you look at the Marketplace that we launched last year, we have more than 75 applications now that are running on the Trackunit marketplace. Some of these are offering capabilities that you could actually buy from us, but we are open to that.

He says customer CEOs tell him they worry about being locked in; “that we become the Microsoft of their IT infrastructure and then we call them up and increase the price by 20%. So, one of the ways [to prevent that] is to continue to be open and allow for these application developers to build competing products on our platform.

“If you lock yourself in, if you only allow for your thinking, you cannot be useful, you cannot help eliminate downtime in the industry. And it becomes a very shortsighted journey.”

One example of a third-party application is that developed by Cummins to give insights on their engines to end users and OEMs; “Could that be an analytics insight that we built on that data for the Cummins engines to the end user? Yes, it could be, but honestly, we don’t have time. Cummins is doing it a lot better. And it is also strengthening the relationship between Cummins and the OEM and the end user, which we really like because that’s animating and strengthening the ecosystem that we sit right in the middle of.”

Focus on construction?
Maintaining its focus on machine insights in construction also means limiting what it does; “I get this question a lot: could your system go into agriculture, into mining, into material handling on ports?

“Yes, it could easily do that, but I have no interest right now because the opportunity in construction is so massive and our customers actually need us to be focused.”

Talk of opportunity naturally leads to Trackunit’s geographical spread. It has grown dramatically over the past eight years – when Brogaard joined in 2016 there were 100,000 connected assets, growing to 500,000 in 2020, and now 2 million. But revenues are generated overwhelmingly in North America and Europe – 60% in North America and 38% in Europe.

The other regions, including Australasia, “are still in the super early days with connectivity and telematics”, explains Brogaard.

The company established an operation in Singapore three years ago and is working hard on South East Asia, Australia and Japan. It has made some progress with Japanese OEMs exporting to the west – and has just announced a deal with OEM Maeda - but in terms of rental companies and contractors, he says, they are still 10 years behind.

Trackunit’s new TU700 IoT device. (Image: Trackunit)

Trackunit is working with some Chinese OEMs, but only in the context of exports for Europe. He points out that China has a more complicated regulatory environment for data businesses; “There’s a big market over there for sure. We evaluate the opportunities in China every year, and [if we do it] it will mostly be through a partnership to begin with, and then we’ll see how it how it progresses.”

Rental is the biggest area for the company, in terms of assets tagged, and Brogaard says some rental customers ask for Trackunit technology even when an OEM has another system integrated with a machine.

He says this is because of the benefits of standardisation; “you know exactly how the data performs, how the data looks, how the data compares to everything else in your data lake.” Equally, he says rental has appreciated the company’s efforts to create a standard access control system for aerial platforms, working in partnership with IPAF and its PAL card license.

Also important to rental, and contractors, is the ability to create a mesh network using Trackunit’s Bluetooth technology; “For every IoT device and tracker you put in, you are strengthening the network that can pick up your tools.”

How many devices?
Ultimately, though, the opportunity for Trackunit is based on the vast number of machines and tools which are still not connected. Brogaard estimates this to be 70% of all construction equipment and tools used globally.

“It’s important to remember that when we think about equipment, you have the very heavy equipment at the top of the pyramid, and then very quickly when you get to compact excavation, aerial work platforms, lighting towers, compressors, generators, and hand tools like Hilti.

“The connectivity goes from 75% globally for heavy equipment down to 1%. The large OEMs have been putting connectivity on their machines for the last 20 years. And we see somewhere between 60% to 75% standard connectivity in that space.

“Large equipment is less than 5% of the total pool of equipment on a construction site, and we tend to forget that…Our focus is the everything below. We are bringing reliable, high-quality data into the rest of the equipment pyramid.”

He says new asset classes are also becoming connected, such as attachments, including demolition tools; “There is a natural connection in digitising not just the location and utilisation, but also abnormal shock sensing. Basically, putting a digital twin to something that historically had no brains.

“And think about it as its own asset, but also as a connection to a piece of equipment. When the equipment grabs the attachment, there could be some immediate logic that happens, including that the attachment is not built for that machine.”

Growth prospects for 2024
All this opportunity and increased connectivity has led to some healthy growth for the business. It reported 18% revenue growth last year to US$170 million, and Brogaard says a similar level of growth is forecast for the current year.

That will be good news for HG Capital, the London-based private equity business that took a controlling shareholding of Trackunit in March 2021. Brogaard says they have been very happy with the support from HG; “A lot of the things we’ve been able to offer is due to HG’s willingness to invest in technology.

“And I want every customer to understand that we are truly committed to continue to evolve and grow and be domain specific. That’s an important thing to keep stating. There are so many opportunities to take tracking technology and apply it in many ways. You do that when there is no more growth, but we have a lot more to do in this space.

“I’ve never seen so much rich opportunity. When I came into the business, we had a hundred thousand devices connected, in 2023 we had 2 million. When I look at that curve, it looks crazy, right? But what if that’s just the beginning of a curve that is exponential? That’s how I actually feel about it.”