Former senior executive at Optibus Ltd
- Transportation management software sector operating environment and thematic trends, highlighting cities partnering with vendors and ride-sharing companies
- Competitive dynamics among vendors such as Optibus, Omnibus, Cubic Transportation (NexBus) and more
- Product roadmaps and differentiation across modules such as transportation planning, scheduling, rostering and operations and more
- Upsell and cross-sell motions, adjacent products and regional market differences
- Outlook for H2 2022 and beyond
How do you define the public transportation management software market? What 2-3 key trends or drivers do you think are the most important to monitor in that sector today?
What are some key themes in transportation management software? Can you expand on what’s impacting current demand for cloud-based transportation management software vendors? Do you expect any solutions to be more in demand as the sector continues to mature across optimised scheduling, planning, RTPI [real time passenger information] and data analytics – all the technologies that may be adopted today?
What is the impact of lower-for-longer public transit ridership in a post-pandemic world on capital spending projects and the market? What was the demand environment like during the pandemic? How is ridership and public transit demand for these types of solutions shifting?
Do you think the coronavirus acceleration in demand was a pull-forward tailwind over the last couple of years and may peter out, or did this create more of a step function permanent demand increase for cloud-based solutions?
What inning would you say cloud penetration or adoption for public sector transportation entities is in? How early on are we in this overall digital transformation journey for a lot of the decision-makers?
We’re seeing a lot of signs that we’re probably entering a recession or flat-to-declining economic period. Would you expect agencies’ modernisation efforts to continue at the same pace even through a recession? How could a downturn impact the sector?
Do you think OPEX on software from transit authorities will only continue to increase over the next 1-3 years? Are there any risks to potentially seeing a slowdown in momentum for that type of spend allocated to these types of solutions, or is it full steam ahead for the time being?
You mentioned rising EV adoption and how EVs could change public transportation infrastructure. How might this shift the landscape for transportation authorities? How does this translate into an impact on the transportation software vendors?
You mentioned the budget increase. For California, how much of the budgets that are allocated for zero-emissions or EV programmes can transit software vendors actually address? How much is translated into a real opportunity for the software vendors vs spent on hardware, infrastructure and other pieces of the CAPEX allocated by those programmes?
What goes into sizing the TAM? Is it mainly just a function of increases in the amount of transit vehicles sold – so the fleet size increase – or increased spend on IT and digital solutions from agencies?
What are the main drivers of market size and growth overall? Is it rising auto prices, the increase of ride-sharing opportunity, the rise of EVs and increased investment in zero emissions, the rising transportation costs in general or population growth?
How deep is the product or competitive moat for vendors? Once they’re integrated into a market – so are in a city or working with a private company covering transit – how high are the barriers to entry for new vendors looking to disintermediate the entity’s legacy solution?
You seem to be describing the importance of coupling the software and services offerings. Is that a point of differentiation for vendors in the space? How important is providing scheduling and consulting services alongside the software offering for success?
What overall investment goes into the go-to-market strategy? What does it take to make inroads into a region once the product is built and comprehensive? What else has to come together to offer a solution in a new region, city or market?
How established is the right to win for the disruptive cloud-based platforms offering a new technology, so the AIs, vs the competing services function in the private sector? There’s nuance in the public sector around the operators, so the private companies operating transit vs the public. Is it easy for them to go into the private companies and sell their services and software? Are there higher barriers to the public side?
Can you outline the major players’ competitive positionings? How does the market segment across vendors? The landscape seems pretty fragmented. How do you think about creating competitive buckets?
Are you describing the trade-off in working with a core system platform as opposed to multiple best-of-breed solutions vendors? How often do you think customers prefer to work with an all-in-one, single-pane-of-glass solution provider vs multiple vendors for best-of-breed solutions? You highlighted mobile ticketing and I think planning is often provided by niche providers as well. What’s in demand from customers and how might products trend as they follow those demand trends?
Are you familiar with other vendors such as Init, Avail or Cubic Transportation, which all seem to be platform plays? How do you think the core system platform vendors can differentiate? How do customers differentiate in an ROI calculation for two core systems platforms ? Is it mainly on product functionality, marketing, branding, price or regional domain expertise, as you mentioned?
You mentioned functionality earlier. What are do you think are the most essential modules that tend to perform the best within a customer once integrated? What is the landing point for a core system, which a software vendor can then expand to the rest of their system within the customer? What are the strongest or weakest offerings that cloud-based solutions providers are offering their customers today?
What’s your opinion on the rising trend of cities partnering with transportation planning, management and scheduling software vendors and ride-sharing companies to increase access to public transportation? How is that a beneficial partnership for the software vendors?
You said some niche providers or point tools may not have a great value proposition as standalone vendors in the medium-to-long term. Do you think M&A in the sector is mainly driven by platform vendors looking to augment their product suites with more innovative solutions to cross-sell for their install base and keep competition at bay? Are any other factors driving all the consolidation we’re seeing in the market?
Some customers may switch along with the vendor that is consolidated. How high are the switching costs for customers, either from a legacy vendor or from a cloud-based solution onto a new one? Do customers ever work with multiple vendors, even while replacing that existing solution? What does the hand-off look like as the cloud-based platforms win new logos?
When you described the integration, you seemed to mention the human management component. We talked about the consulting services in the sector. Do you expect the major vendors that are looking to implement net-new logo wins with their cloud-based platforms to prioritise the use of the channel or indirect sales to unlock future growth? Is the channel an important focus for vendors in this space? What does that look like in terms of a relationship for the cloud-based solutions platform plays?
Could you expand on how the purchasing life cycle is different between accounts in North America and Europe? We talked about the privatisation trends. How elongated is the sales cycle in North America vs private companies in Europe?
Are there any regions that you would expect to be the fastest-growing adopters of cloud-based transit software systems globally?
Are there any possible disruptors or wildcards that we should monitor throughout the sector? Might any regulatory requirements or hurdles pop up in any specific sectors?
Do you have any concluding remarks or is there anything we haven’t covered on transport management software?
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