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Samsara CEO - "We have achieved scale, but this is still just the beginning"

Derek du Preez Profile picture for user ddpreez July 1, 2024
As Samsara launches its Asset Tags on the world, CEO Sanjit Biswas says that the vendor is just getting started in connecting physical operations to its digital platform.

Sanjit Biswas

When diginomica last sat down with Samsara CEO Sanjit Biswas, he said that buyers "didn’t have to squint" to see an ROI when adopting the vendor’s Connected Operations Cloud - pointing to the fact that companies with a large number of physical assets had largely been ignored by the technology market during the previous decade’s adoption of digital-based tools.

Organizations that rely on the operations of physical environments, with assets that include everything from trucks to trailers to pallets to generators, have typically been forced to make use of manual processes (pen and paper) to get work done. Or have had to cobble together multiple systems to try and digitize processes and workflows themselves, leaving plenty of room for error and unnecessary friction. 

To date, Samsara’s technology has largely prioritized large physical assets, such as vehicles or LGVs, with the primary use cases being improving safety through the use of AI-enabled cameras, or operational efficiency and tracking via sensors and telematics. 

And this has delivered scale across the Samsara platform, evidenced by the Connected Operations Cloud receiving 75 billion API calls and processing nine trillion data points. However, at the company’s user event in Chicago last week, CEO Sanjit Biswas noted that this is just the beginning and said that there is far more of the world of physical operations to get connected up. 

And whilst the hardware (and associated software) has been moderately lightweight compared to previous industry attempts - for example, we’ve spoken to customers where fitting out a vehicle with Samsara kit takes approximately five to ten minutes - Samsara’s priority, as noted, has been on large equipment and vehicles. 

This is now set to change with last week’s launch of Samsara Asset Tags. These lightweight tags are aimed at organizations that may want to track and manage smaller, but high value assets. The new device, which is approximately the size of half a small chocolate bar, has a battery life of four years and uses ‘supercharged Bluetooth’ capabilities, which connect to the Samsara Network (an industrial network that is enabled by Samsara’s existing connected devices on the ground - the Asset Tags essentially pick up signal from other Samsara gateway devices nearby). 

The key thing to note is that the tags are small, easy to fit and extremely durable. They can be connected to anything and everything pretty easily (as we witnessed during some demos) and open up the option for organizations to keep track of all of their equipment. 

As is often the case with how Samsara approaches things, when Biswas sat down with diginomica last week, he said that the vendor will listen to feedback from customers about how they’re using the Asset Tags beyond use cases such as tracking, to feedback into the platform additional software capabilities: 

Let's wait to see where the customers take these things. We have some initial ideas of tracking assets, tools, that sort of thing, but already our customers are asking: can I put this on a pallet? Can you put this on a case? Can I track it through a very complex supply chain? Could you make an even smaller one? Could you make a bigger one? 

We're starting to get that feedback loop running and I think that's going to be deeply interesting, because it'll show us more of our operations. We see a lot of field operations - there are a lot of other physical operations that are still hidden to us. And so I think this asset tag will actually take us into those use cases.

What’s been interesting to witness when talking to customers of Samsara is how the sensor data is being closely coupled with the introduction of workflows and notifications. For example, we saw an example this week where one customer is using Samsara’s in-vehicle sensor and AI equipment to trigger alerts to safety managers when an incident occurs with a driver. The driver is then immediately provided with a workflow to report the incident, take pictures of the vehicle if it is damaged, and provided with follow up training or documentation, all within the Samsara app. 

Biswas said that the advantage of the Connected Operations Cloud is that with the introduction of the Asset Tags, customers will immediately benefit from the effects of the platform, without having to do too much heavy lifting:

I've had a few customer meetings on site and it's really fascinating because if you think about their operations, it's not limited to just vehicles. And now they're seeing our vision really start to expand, they're excited because they're saying, ‘wow, think of all these other systems that we have that we can bring onto the platform’. 

And it’s already connected behind the scenes. Everything that we showed during the demos, it's live and it's available. And the amazing part about the framework or the platform we built is, as we innovate and build new things like the Asset Tag, it inherits all the properties, like the users, the alerts, the workflows.

So this idea of triggering a workflow if an asset enters the job site, for example, is now possible - and that's the kind of experimentation we're seeing customers already take on.

Scaling effectively

If the launch of Asset Tags begin to gain traction as Samsara expects, given their lightweight nature, this could lead to a significant increase in data points being processed across the Connected Operations Cloud (adding to the trillions processed to date). And whilst not all the use cases and software capabilities are yet known, Samsara has the task of also scaling internally to meet customer demand. The company recently hit $1 billion in ARR - experiencing 37% year over year growth - but Biswas says that it is still early days in terms of the total addressable market:

At this point, I think we have achieved some significant scale - but we still view it as the beginning. We want to sustain this high level of growth, while maintaining profitability. That's an ongoing challenge for any business, right? 

We need to make sure that we're investing enough in the future and not just not just staying put where we are. So, just pushing the organization, which means we're hiring a lot of people, we're going to continue investing in headcount, we've got a lot of product announcements, so we're going to be doing more of all that. 

Biswas is also looking ahead to expanding into lesser mature regions:

And then on the sales side, our new geographies, or frontiers as we call them, are performing really well. Mexico is doing fantastically. Canada is doing well. We need to continue to invest in those frontiers because there's a lot of TAM that, frankly, we’re under-penetrated in, because we started here in the US. 

It’s just our most mature market. But we want to now really start opening up those other geographies. 

As well as new geographies, it’s also possible that Samsara could now see a new type of customer as a result of the Asset Tag launch. Historically the vendor has entered into enterprise sales discussions with organizations that have a fleet of vehicles to manage. These organizations operate across a diverse range of industries, but the common denominator for a lot of Samsara’s install base is that they manage a fleet of vehicles. However, with the Asset Tags providing a new range of use cases and a lower entry point, Samsara may find that its prospects list broadens: 

It’s very possible, yes. We’ve just launched it but I think it will be very interesting to see over the next year what comes out. 

Another interesting thought, one which I proposed to Biswas during our discussion, is that Samsara is going to be one of very few organizations that understands how a lot of the world’s physical environments operate. When you look at the live data maps of sensor data coming into the Connected Operations Cloud, you are quickly struck by the wealth of intelligence the vendor holds on how our infrastructure works - everything from roads, to towns, cities and supply chains. 

There’s a potential revenue model, I suggested, where Samsara provides big picture insights to public sector entities on how to improve their environments. This is what Biswas had to say: 

We work with a lot of municipalities, state governments, local governments, and they're keenly interested in things like: what are my most dangerous intersections? Because they can actually change the traffic pattern, right? I think that'll be an area of partnership over the next decade, which is to say, let's feed some of this data back. 

And then the supply chain is actually quite complex. It's no one company that runs it all. So, how do we connect our customers together? I think these are all network effects that you get with scale.

What’s to come

Whilst priority number one for Samsara appears to be scaling efficiently, it was notable (and refreshing, if I’m being honest) that during Biswas’ keynote at the event last week there was zero mention of Generative AI. Having sat through dozens of keynotes during this current conference season, this is certainly noticeable - where every other vendor is trying their best to shoehorn Generative AI into every product announcement going. 

There are two things to consider here. Firstly, Samsara has been using AI broadly across its product portfolio for many years. It’s the key technology used in much of its platform to advise and guide its customers to more efficient and safer operations. Secondly, Samsara is selling to customers - and users - that may not be heavily invested in digital technologies yet and are already leapfrogging to a connected, cloud-based platform. Samsara arguably has plenty of TAM to capture with its current product portfolio, before it starts down the path of Generative AI opportunities. However, according to Biswas, those opportunities are coming: 

We're working with it. It’s not that we're allergic to it or - and like you said we've been doing different forms of AI for some time. The safety product is really made possible because of AI. The way we see AI is that it’s a tool, right? It's a technology. So we plan to embed it and infuse it in basically every product that we build. 

Generative AI, we use it in a number of ways. I'm actually going to do a demo at the investor day. We have the chatbot use case. And our focus is more on: what is unique to the platform? That's the customers’ data. We have the operational context. 

ChatGPT does a great job for things that it's been trained for that are on the internet. Most of our customers’ data is not on the internet. It's their maintenance data. It's their location data. It's the dash cameras. So that's where we're investing - how do we connect the unique data asset we have to foundational models? 

For what it’s worth, some of the conversations I had at the event last week suggest that Generative AI will be deployed across the platform for use cases that include: customers asking the platform for specific insights about their data and for conversational training tools that can help improve user safety. 

Finally, I was curious to hear from Biswas what advice he is giving to prospects that perhaps are immature in the digitization of their physical operations - the ones that are perhaps feeling overwhelmed about where to start. It’s worth remembering that physical operations are often complex, vulnerable to things going wrong because of unpredictable environmental factors, and are being operated by people that are used to working with manual processes.

Given Samsara’s success in recent years, there’s clearly a desire to adopt, but it can be difficult to know where to get started. Biswas said: 

The first thing we tend to do is focus on an initial project. Don't try to do everything all at once, because operations is complex. And the change management required - when you have thousands of frontline workers in your operational context - you need to make sure that you're educating them, you're communicating with them, showing them what it does.

I think if you can find a win…that's why we focus on safety, for example, it's a win for everyone. Everyone wants to be safe on the job. If you can get them a win and recognize their great work, get the technology in at that point, people start saying ‘we want to do more’. 

As opposed to the company or organization pushing it top down. So, we always try to find that initial project and then work with them closely, using learnings from thousands of other companies to say: this is what works really well.

My take

The overwhelming impression given by my time with Samsara last week is that this is still early days for the company. Dealing with a market that has historically been underserved by technology providers means that our understanding of where customers will guide use cases is still a work in progress. What’s becoming clear though - and is interesting compared to other traditional enterprise system of record providers - is that when dealing with the world of physical operations, Samsara’s platform works as somewhat of a ‘nudging’ tool to customers. 

If you think about physical operations, it’s not something that’s static. They are complex and are often always moving. Listening to customers last week, the use of sensors and complementary workflows are not only being used to improve efficiencies, but to provide near real-time nudges or adjustments to how people and operations carry out their processes. 

In addition to this, the Samsara platform is being used as a data record for other systems of record, such as ERP systems, to provide more accurate records of what assets a company holds and where they are. When Biswas says that ‘this is just the beginning’ - he means this is in the broadest sense. It’s just the beginning in terms of the number of assets or environments being connected up. It’s just the beginning in terms of the company’s options for growth. And it’s just the beginning in terms of how we think about future use cases. Execution is obviously still key, that’s always an uncertain variable, but the prospects that lie ahead for Samsara are very compelling. 

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