Cloud-based commercial fleet telematics units to reach 16.8 million by 2018

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The number of cloud-based commercial fleet telematics units is forecast by ABI Research to reach 16.8 million units by the end of 2018, up from 1.1 million in 2012.

For cloud-based fleet telematics applications, the data processing is performed in the cloud rather than by software and hardware in each vehicle.

"The platform is easily scalable and all IT services can be outsourced to the cloud provider, which means that the telematics provider can focus on its core competence of developing telematics applications," explained Gareth Owen, principal analyst at ABI.

Leading cloud-based telematics providers include Fleetmatics, MiX Telematics, Telogis and XRS.

ABI identified a number of challenges posed by cloud-based telematics, such as data privacy, data ownership and security issues. For example, a hacker could modify or disable a firm's operating systems or introduce malware by compromising the "over-the-air" transmission of firmware updates.

"Virtually all of the major commercial fleet telematics providers have moved to some form of cloud-based system, and are offering SaaS-based services, although there are wide differences in the types of services offered by these companies," Owen said.

"As a result, a number of these companies are reporting an increase in higher-margin software revenues and a corresponding decrease in hardware revenues. However, most SaaS-based revenue lines include a hardware component in the monthly subscription fee although this is not normally broken down," he cautioned.

Owen noted that older telematics equipment might not work properly or at all using the cloud, so cloud-based fleet telematics systems must be designed with the cloud in mind.

For more:
- see ABI's release

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