Qualcomm Sells Omnitracs for $800 Million
September 10, 2013 Alex Woodie
Qualcomm last month sold Omnitracs, its division that develops truck- and trailer-tracking technology that was often integrated with carriers’ dispatching applications running on IBM i servers, to a private equity group for $800 million.
Long before CDMA or the Snapdragon processors were a gleam in Irwin Jacobs’ eye, Qualcomm was–if you can believe it–a mainstay in the rough and tumble world of interstate trucking.
The tale starts in the glorious year of 1988, when the San Diego, California, company started developing the Omnitracs systems that would combine cellular, satellite, and IBM midrange technology to track and monitor trucks and trailers as they travelled into and out of every nook and cranny on the North American continent (and parts of Latin America, too).
Network connectivity is taken as a given in many parts of the world, particularly areas of Europe and Asia with very high population densities. But the fact remains that, until recently, there were large pockets of the North American outback that remained untouched by cellular coverage. In these areas, Qualcomm used satellite communications to enable trucking companies to track the whereabouts of their assets, and to communicate with them in real time.
Over the years, the product did very well, and in fact helped support Qualcomm’s other units as products like CDMA were being developed. Nearly every Omnitracs installation was also an AS/400 installation. In fact, in 2003, officials with Qualcomm Wireless Business Solutions unit (as it was then called) said that 70 percent of Qualcomm’s 1,600 Omnitracs customers run their Omnitracs systems on AS/400 and iSeries servers.
In those days, the iSeries was still the dominant server platform in the North American trucking industry, backed by the strength of i5/OS and OS/400 ISVs like TMW Systems and Innovative Computing. Those software companies are now both owned by Trimble, and the iSeries is no longer the dominant force in trucking that it once was. Nevertheless, there are undoubtedly still hundreds of Omnitracs installations on the platform, but it’s not a business Qualcomm wants to be in anymore.
Vista Equity Partners has agreed to take the Omnitracs unit off Qualcomm’s hands for the sum of $800 million in cash. The companies agreed on that price in late August, but the transaction has not been finalized.
In a statement accompanying the announcement, Vista Equity Partners founder and CEO Richard Smith says the company is a long-term investor. “We are impressed with the compelling value proposition Omnitracs’ products and services offer their customers. We look forward to working with them and helping them to reach their full potential,” he says.