Not a long time ago, Gartner announced the annual Field Service Management (FSM) Magic Quadrant report. The report is fundamental to understand the changes in the market. In Tasker and my case, it is the FSM market.
If you have any experience in remote workers management, I invite you to read what I wrote below.
About the Gartner Report
First of all, you have to be significant to appear in one. I mean, very substantial. To be more specific, you have to generate more than 7.2 million USD in annual turnover, sell 100 licenses on average, work with several industries and continents. More to that, Gartner surveys with at least five different clients and tests products themselves.
To comprehend this study in great detail, I have to mention that the limited products in the study are those that cannot serve 1000 (yes, three zeroes) remote workers operating in various locations.
I would say that bigger is not always the fastest, which means that regarding the technological side of the document, this report doesn’t represent the actual progress of the FSM market.
So, What Are the Veterans and How They Established in the FSM World?
Oracle, Microsoft, General Electric, SAP, Salesforce are familiar, but probably you don’t recognize them from the FSM perspective. Yes? However, all of the mentioned companies have their own FSM solutions and are tirelessly competing with original FSM players such as Clicksoftware, Astea, and Servicepower.
In 2017, General Electric finished the deal worth 915 million USD and obtained ServiceMax, one of the leading companies in the FSM market. It led General Electric to become one of the leading companies in the Magic Quadrant. Yet GE will have to start selling ServiceMax and other investment projects due to recent troubles facing the business. However, it’s another story about one of the biggest companies in the world.
A few months ago, there was an announcement that Salesforce is negotiating with ClickSoftware, an FSM platform that has the most extensive client base. The deal could have reached 1.5 billion USD; unfortunately, the negotiation was over (after that, Salesforce paid way more than that). Despite failed procurement of the FSM giant, a few years ago, Salesforce introduced its own CRM module for remote employees’ management. Software is called Field Service Lightning, and it appears on the Gartner report.
In 2015, Microsoft bought FieldOne Services, and after more than a year, Microsoft followed Salesforce’s example and introduced Dynamics 365 for Field Service to the market.
SAP had a similar case when the company obtained CoreSystems and Canadian enterprise Fleet Complete. The latter company entered the European market, in 2018, after buying Estonian company, Eco Fleet. So far, the company is too small to be mentioned on the Gartner report.
A brief of significant acquisitions:
|2015||Microsoft||0.04 bn.||FieldOne Services|
|2017||General Electric |
|0.92 bn.||Service Max|
|2019||Salesforce||1.50 bn. incomplete||ClickSoftware|
FSM Market and Why Is It Appealing to Investors?
The estimated value of the global FSM market is 5 billion USD; nonetheless, it has the potential to reach 25 billion USD in the following years. The FSM market is less affected by economic changes, usually generates recurring revenue, has a client base, which, in the case of an investment, creates a closed market for upselling. It’s necessary to mention the progress of technological connection, hardware, and different services.
In most cases, acquisitions are made because of speed and relatively low risks. However, after seeing significant acquisition prices, not often we evaluate upsell possibilities. For example, how many licenses does Microsoft sell to its clients and vice versa? Therefore, the establishment of a closed ecosystem becomes a legal threat.
Another reason for acquisitions is legacy systems. They are too old and perplexing to adapt to new mobile-first tendencies. In many cases, possession of a small stakeholder is a rapid solution with a more modern user interface and user experience.
The synergy between CRM or ERP and FSM is obvious. SAP, Salesforce, and Microsoft did not only understand it but also implemented it. Companies in the USA, a homeland of FSM, struggle to understand the European market (different currencies, languages, the legal bases). Therefore, USA companies will continue entering the European market through acquisitions. I believe we will see many exciting deals.
If we abstractedly compare* CRM and FSM production numbers in the market, we can see that FSM is not a rookie anymore and come down to CRM only by 35%. Knowing that these segments are only five years apart, we can applaud FSM for rapid growth.
* Getapp, Capterra, Software Advice, and G2Crown software quantities in Field Service Management (1207) and CRM (1879) categories.
Small and Medium Companies
Coming back to veterans, the question is what’s left for small and medium companies, like us?
To begin with, we are focusing on several target industries. Big enterprises can serve these industries, yet it would be too difficult and expensive for SMB to adapt its processes to the solution. Yes, the solutions mentioned in the Gartner report won’t adapt to your operations. They don’t even brag about it. Unfortunately.
A simple solution: if you have less than 100 remote workers don’t take Magic Quadrant solutions into account.
Second, user experience. The situation is getting better, but it’s not as excellent as it should be. As mobile-first is a focal point of the present, a part of the solution still got stuck in the past. Their attempts to recreate functionalities of a WEB to a 5-inch cell phone screen failed before they could understand that differences between mobile and WEB aren’t only the size of the screen.
Third, we are there where more prominent companies don’t get what they need. The population is too small, the audience is not educated enough, not enough people speak English. On the other hand, we are patient. We educate consumers, and a client with 20 licenses is a fortune for us. We not only onboard clients individually, but we also consult them about transfer processes to digital space.
There’s enough place for everyone. Yet. USA statistics show that FSM penetration is 25%. I bet that in Europe it barely reaches half of the number. We experience it, especially when our main competitor is paper and pen and not other suppliers.
What’s the current situation?
Present = IoT. Perhaps, the formula is too optimistic, but I can strongly say that IoT is no longer a buzzword, but reality. It’s the most transforming technological innovation since the mobile implementation to provide service.
After the first three industrial revolutions were focused on manufacturing (mechanization, mass production, automation), it’s difficult for manufacturers to acknowledge the differences in the Fourth Industrial Revolution. Manufacturers become service providers, and API becomes the central point of competition.
Yes, manufacturers are the beginning of everything. When someone asks me whether we are ready for IoT, I say that we are prepared as much as the tools that Tasker will have to use are ready.
Now about the present. Today, the coffee machine says how many coffee beans or plastic cups left in the machine, a tractor can tell when it needs oils changed, and the conditioning and ventilation system warns about a broken fan. The only thing we, FSM stakeholders, need is for them to talk and that all manufacturers would understand that silence is in the past. Later on, it’s our job to direct remote engineers to damages and explain how to eliminate them. We plan for him, we calculate for him, we record for him, and we report for him.
That being said, we can save up to 45 hours per month of an engineer’s working time.
However, saved time is not the only value we can bring to service providers. Think about how SLA-based services, after-sales maintenance, uptime calculation, and predictive maintenance will get easier. Everything is going upside down, and it’s one more challenge of adaptation.
We haven’t reached halfway. It is predicted that in 2020, artificial intelligence will monitor 10% of the urgent field service tasks, and workers outside the company will perform 40% of similar jobs. FSM solutions that used to operate remote service tasks are now becoming FSM platforms that can administer the whole business.
Gartner foresees that in 2022, more than 50% of remote service suppliers will use digital solutions to manage multi-channel communication. Generally speaking, the way you communicate with a courier through messages regarding the time or location of your delivery, after a few years the same way you will interact with a plumber, electrician, or landscape designer. I personally believe that the given period is too long; there are already solutions that can be implemented today, including Tasker. As previously mentioned, the biggest is not always the fastest, and Gartner doesn’t mention the fast ones.
Gartner shares another insight that in 2022, only 30% of remote service suppliers will be ready to provide AI-based service. Frankly, the number surprised me because, in today’s startup scene, we can see AI everywhere. I’m quite against buzzwords because whenever a new trend is born, everyone forgets about the present and turns to the trendy future. Currently, those trends are AI and 5G, and not IoT, which I mentioned before.
Yet… Tasker with colleagues from Estonia tested a prototype. It went like this: we would throw trash or knock down a trash can in a filming area, then artificial intelligence recognizes it and creates a task on the Tasker system. It shows the exact location where the mess is.