An Entrepreneur’s Tale: Diego Borrego and the Twists and Turns Behind Networkfleet

11/4/09Follow @bvbigelow

To a large extent, the story of San Diego-based Networkfleet is also an intriguing tale about co-founder Diego Borrego. The privately held company, which currently has more than 100 employees, is one of the nation’s largest providers of technology and services for monitoring the location and status of company-owned vehicles.

Borrego, a Mexican-American who says his first language was Spanish, helped start the company in 1999, quit when he realized he had lost his ownership stake, and rejoined Networkfleet before the business entered a period of double-digit growth. The 42-year-old engineer says his name is on about 10 of 30 patents issued so far to the 10-year-old company.

While wireless fleet management systems are what my Xconomy colleagues politely refer to as “mature” technologies (as opposed to our usual focus on the sweet spot of emerging tech), Networkfleet maintains that not all fleet management systems are alike. Many systems simply use global positioning satellite technology to monitor the locations of company-owned vehicles. Networkfleet’s technology also helps customers reduce their fleet operating costs and vehicle emissions by using the computerized sensors in every vehicle to monitor the vehicle’s performance and engine efficiency.

Diego Borrego

Diego Borrego

“There are processors now that control the brakes, the engine, transmission, airbags,” says Borrego, Networkfleet’s vice president of engineering. “There’s a rich set of information that we call diagnostics.” He views the technology as more of an IT challenge, because nowadays there is essentially a local area network (LAN) in every new car and truck that links together an average of 25 different computers. “Extracting that data from the vehicle, and somehow transmitting it (in conjunction with GPS) and turning it into information that can be used by fleet vehicle managers is the innovation,” Borrego says.

Networkfleet provides its Web-based service to customers that range from plumbing companies with 10 trucks to the state of Delaware, which operates more than 2,400 government vehicles. Networkfleet installs a piece of hardware that connects to the LAN in every vehicle, gathers information about the vehicle’s operation and transmits the data via cellular links to a data center operated by Networkfleet. Each customer’s fleet manager is given a login to Networkfleet’s website, where he or she can monitor the location of the company’s vehicles. Data about each fleet also can be converted into reports that fleet managers can use to schedule maintenance, optimize operations, and monitor driver behavior.

The company generated about $30 million in sales last year, a 45 percent gain in revenue growth over 2007 that made Networkfleet the second-largest company in the business (based on number of subscribers), according to Keith Schneider, Networkfleet’s president. (The largest is Trimble, a Sunnyvale, CA-based GPS technology company that acquired rival @Road in 2006 for $496 million.) Schneider says many of their competitors tend to specialize in narrow segments of the technology-based business, such as GPS-based vehicle location, advanced routing applications, and workforce management—and he sees the technologies converging. “The industry is poised for massive consolidation,” Schneider says.

The Networkfleet president indicated during our conversation that Networkfleet, which has been owned by the New York private equity firm Apollo Management since 2006, aims to take an active role in that consolidation.

Still, Networkfleet has taken a winding road to get this far—after beginning more than a decade ago on a strategy that came … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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  • Mimi Stansell

    Diego Borrego is amazing! I think this idea is innovative, if a bit like Big Brother is watching. Diego Borrego has come up with a practical idea for monitoring the systems of the fleet vehicles. He is obviously very hard working and bright!

  • Louis Perkins

    Borrego’s ideas have been spreading too. His principles are the standard for plumbing companies in Calgary right now. He has a lot to be proud of, and we have a lot to thank him for.