TTI interview Bill Osborne
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Photography courtesy of Lex Kembery
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Having spearheaded federal signal’s recent acquisitions spree, Bill Osborne is adamant he’s got the best tolling tools in the box to compete at the highest level.
When Bill Osborne appears in his LinkedIn profile photograph shaking hands with President Barack Obama, it’s a little disconcerting but pretty damned impressive at the same time. Thankfully this online discovery occurred following our interview at Intertraffic Amsterdam in March, therefore avoiding the chance to get stagefright in the presence of someone so seemingly well connected, as well as embarrassing questions such as ‘So, you actually got to touch him?’
Osborne may well have friends in high places – and indeed is kind of a big deal himself – but he couldn’t be more down to earth. He has a friendly and engaging manner, a no-nonsense attitude and – unusually for the CEO of a US corporation – is not flanked at all times by over-eager PRs poised to intercept any questions on a ‘classified’ list. Perhaps his time in the male-dominated, plain-speaking automotive industry has helped shape this ego-free, direct demeanor – Osborne was a Blue Oval boy for many years, heading up truck engineering for Ford North America, then becoming president and CEO of Ford Canada before assuming the same role at Ford Australia, a country he regards with great fondness. Although his job title hasn’t changed, the role he assumed at Federal Signal in September 2008 has meant getting to grips with a very different set of tasks, priorities and people – and quickly.
The family guy
The ITS industry often moves frustratingly slowly for some, yet Federal Signal has been undergoing an extraordinary period of growth that has set the traffic management sector talking. Acquisition after acquisition has been announced and Osborne’s feet have barely touched the ground over the past 18 months. So what has this buying frenzy been all about? “When I came to Federal Signal it was clear that one of the things the company needed was a platform for growth,” says the man who formulated the plan. “We have some very good cash-generating businesses, but in many ways we lacked the vehicle for growth. When we looked at our business portfolio, the fastest growth was with PIPS Technology [the ALPR technology specialist, acquired by Federal Signal in 2007], so that’s where we decided to focus. PIPS serves two markets: it has a public safety customer base as well as an ITS customer base, and when we looked at the two markets, we felt that the bigger of the two opportunities was ITS. We also felt that in the long-run a standalone ALPR company wouldn’t be enough, and that we needed to participate in other elements of the value chain.”
ALPR alone not being “enough” alludes to the company’s ultimate goal – to become a seriously big player in road-user charging. “We felt a complete road-user charging solution would be something that we could use eventually around the world,” Osborne explains. “So that was the acquisitions strategy – to be able to build a complete solution and effectively become a one-stop
shop for road-user charging.”
The original plan was to snap up a large integrated company that already had most of the necessary components for RUC, rather than buy several smaller organizations, but as Osborne says laughing, “Nothing ever goes to plan!” The revised version – plan B, if you like – saw the company acquire Sirit, Diamond Consulting Services and VESystems in short succession, and has actually allowed Federal Signal to have more freedom with regard to who it works with and how. Osborne emphasizes how important it is to work with people of a similar mindset in terms of goals and working practices. The ‘pick-and-mix’ strategy also enabled Federal Signal to go after the technology it truly wanted to get on board. “We were looking for companies that we thought had the best-in-breed technology in their particular segments – and we feel pretty confident that’s what we have got,” Osborne explains with a smile.
Commenting on each of the companies individually, it’s clear how that confidence came about. “We believe Sirit has the world’s best high-performance RFID readers. The 510 Infinity series is an industry standard. We also felt Sirit had a great lead in passive tag technology and we feel passive tags are going to be very important in the future. “What we liked about VESystems is the high level of customer satisfaction. It has a great track record in terms of the flexibility of their solutions and the level of customer service that they provide – those were the elements that made them very attractive to us. Plus the processing and accuracy in their back-office system was second to none. The roots of VESystems go back to Lockheed Martin’s payment systems, so this very small company in California that had world-class leading technology was a great find.”
Perhaps the most unexpected acquisition to outsiders was that of Diamond Consulting Services – to the uninitiated eye, a little company on the opposite side of the Atlantic to Federal Signal, based in rural England. But technology conquered geography when it came to Idris – the jewel in Diamond’s crown. “Idris vehicle classification software is almost a de facto standard in the USA, with about 85% market share on smart loop detectors. We worked with Idris on the E470 cashless tolling application in Denver, and that relationship proved we could have a seamless link between Idris and PIPS. It is strategically important to have this integration, which we can now replicate around the country for cashless tolling.”
A new dawn
Following the acquisitions, a new business unit called FSTech has been formed, which is effectively an umbrella division for all ITS activities and is headed up by former VESystems founder and CEO, Manfred Rietsch. Although the plan is to go to market with an all-in-one solution, Osborne is keen to allay any fears that these well known brands will disappear: “ITS is an industry that relies very heavily on partnerships, so our goal is certainly not to hold any of these brands hostage! If a customer wants just one component, a PIPS camera for example, then we will certainly offer that. But the brands will operate as one business unit and we will offer integrated solutions.”
If the past six months are anything by which to judge, by the time that this article lands on your desk these initial acquisitions could be old news, and Osborne hints that the spending spree may not yet be over. “All of us regard this as a global industry, so while UHF is predominant in the USA we know that DSRC is far more prevalent in Europe and we would love to be able to partner with a strong player that brought those technologies to the table,” he admits.
“Then there’s traffic data management, which we think is also going to be important. Ultimately, what we’d like to be able to do is build a technology infrastructure that can support all of those different uses, so not just road-user charging but traffic management, safety and security, capacity, utilization, and so on. We really believe that the long-term potential is to have one common technology platform that serves a variety of uses.”
It’s an ambitious aim to go for such an all-encompassing strategy (our discussion also touches on the role that Federal Signal could play in IntelliDrive, video analytics and security), made all the more challenging by having such a fragmented domestic marketplace to start from. On this issue, Osborne looks to Europe for inspiration: “The European market is far more integrated, with a great deal more technology, whereas the USA appears to be lagging a bit in comparison. I attribute that to the lack of technical standards. What’s clear in Europe is that the European Union has created some very important standards that have allowed companies to be able to operate at a larger scale. To get big investments in technology and R&D means being able to have a scale to recoup those investments. I think what’s missing in the USA are common standards, but I do believe we’re on the right road and we’d like to play a part in that. Federal Signal would like to see more open architectures and more transparent standards, which will obviously create more competition but will also grow the entire market space. We believe that the broader the dissemination of these technologies, the quicker you’ll get adoption. And specifically for road-user charging, it will help people get to grips with paying for their use of the roads.”
Increasing competition is something that Federal Signal is already used to dealing with in the US market – for every Sirit there’s a Mark IV or a Transcore and Osborne lists “a whole plethora” of companies competing with PIPS. But it’s the European market – so crucial to Federal Signal’s long-term goals – that’s more of a concern. “One of the trends we’ve noted in Europe is that many of our customers are now getting into the ALPR business,” Osborne says. “Where we used to pretty much sell exclusively to Siemens, the company has announced its own speed product using ALPR. Q-Free, another big customer of ours, recently bought ALPR software supplier Dacolian. It’s a shifting landscape. Some people who are customers today could be competitors tomorrow.” That of course, is assuming Federal Signal doesn’t buy them first...
Interviewed by Louise Smyth
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