Zebra changes stripes, extending technology reach, market scope
As a global leader in bar-code printing, Zebra Technologies startled some market watchers in January 2007 with its $126-million cash acquisition of WhereNet, one of the largest and best-known suppliers of real-time location systems, or RTLS. “When the WhereNet acquisition was announced, we got calls from people who couldn't understand what Zebra was doing,” says Drew Nathanson, dire...
As a global leader in bar-code printing, Zebra Technologies startled some market watchers in January 2007 with its $126-million cash acquisition of WhereNet, one of the largest and best-known suppliers of real-time location systems, or RTLS.
“When the WhereNet acquisition was announced, we got calls from people who couldn't understand what Zebra was doing,” says Drew Nathanson, director of AIDC/RFID technology for Venture Development Corp. (VDC), a Natick, Mass.-based industry analyst firm. “But it was perfectly clear to us that they wanted to shatter their perceived market image and set the stage for growth in new markets.”
Zebra followed with acquisitions in October of Navis Holdings LLC and proveo AG for $145 million and $16.3 million respectively. Navis does asset-tracking for marine terminals as well as cargo management solutions, while proveo specializes in RTLS solutions for airports. The resulting portfolio, says Zebra, leverages its strengths, positions it strongly in new markets, and offers its customers options to address business needs.
“People know Zebra as a vendor of industrial print-on-demand solutions—a space where we've been very successful,” says Phil Gerskovich, Zebra's senior VP of corporate development and strategy. “But we realized we could offer customers other technology to track, locate, and identify assets—whether those are people, inventory, or products.”
Even prior to the WhereNet acquisition—which gave Zebra a strong footprint in active RFID—the company already was involved by way of its label printing business in passive RFID, and well versed in the mandates from Wal-Mart and the Department of Defense (DoD) for RFID labeling. While passive RFID hasn't taken off as aggressively as originally projected due to several factors—e.g., tag costs, the HF/UHF frequency debate, lack of compelling ROI, and a softening on mandates—Zebra's historic expertise provides a solid foundation for working with customers to address requirements for real-time asset tracking.
“The Wal-Mart and DoD mandates greatly raised awareness for RFID, but the market hasn't reached the level that people originally anticipated,” says Michael Liard, RFID director for Oyster Bay, N.Y.-based ABI Research . “It was probably the right time for Zebra to diversify. They realized the value of offering a total solution and wanted to ensure they got a piece of the opportunities that were unfolding in new markets.”
Liard also says vendors realize end-to-end solutions are important to users. “If you look at RTLS, key markets include health care, life sciences, and automotive.” he says. “WhereNet has strong positions in all these. Cargo tracking and security also show strong growth potential, which is where Navis is strong. Zebra's acquisitions make sense when you look at where the growth is.”
NYK Group of Tokyo is one of the world's largest marine transportation and logistics companies. NYK Logistics (America)—a long-time customer of Zebra Technologies and WhereNet headquartered in Long Beach, Calif.—operates three warehouse facilities in the United States.
“The acquisitions were excellent strategic moves,” says Rick Crawford, director of operations for the NYK Logistics warehouse division. “Zebra solidified its position in asset-identification tracking using multiple mediums such as RFID. We've [benefited from] WhereNet being able to fund development for us that might have been more challenging without Zebra behind them,” he asserts.
Juliann Larimer, a Zebra VP, believes Zebra's Business Value Map clearly articulates its scope of offerings. “The X-axis on the map showcases how technology improves the efficiency of people and processes, while the Y-axis shows where our solutions can be deployed—whether to support workgroups, the enterprise, or the extended enterprise,” says Larimer. “Every Zebra application derives value from fitting at the intersection of those two dimensions.”