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					Business plan for RTK Correction Delivery Service
South East Queensland


                            Graham Wirth / Lienhart Troyer

                                  Sponsor: Matthew Smith
Project Charter
Business Plan for RTK Correction Delivery Service
South East Queensland
   Leica Geosystems is strategically interested in increasing revenues from service activities. Senior
    management have discussed the opportunities available to Leica Geosystems through the
    establishment of an RTK Correction service to our traditional survey customer segment and to
    customer bases through our new and emerging product groups. Billing issues and wide area
    technical aspects have been significant concerns in taking these ideas to the next stage. The latest
    version of Spider software solves these problems.
   The major opportunity for the SmartStation concept in SR Asia is in Australasia. To really benefit
    from this latest technology it is important to have access to permanent reference stations with
    efficient wireless delivery systems. As this technology will also increasingly become a requirement
    for Machine Automation and Networked Job Site opportunities in future, Leica Geosystems is
    interested in establishing a commercial RTK Delivery Service in South East Queensland. The
    location is chosen to take advantage of the BU Engineering facilities in Brisbane and also because
    South East Queensland has the highest projected growth rates in Australia for the coming years.




2
  Business Plan for RTK Correction Delivery Service
  Team




 Graham Wirth: Regional Manager GSR Australasia

 Lienhart Troyer: PM Reference Station Sensors, BU Engineering




  3
Business Plan for RTK Correction Delivery Service
Contents
 Services in reference station networks
 Current market situation in South East Queensland
 Proposed network
 Launch and promotion
 New markets
 Pricing structure
 Financials
 Risk analysis
 Conclusions
 Q&A




4
Perspectives in Service Management


                                                                                        ... To producing
                                                                                        service provider
    Contribution of Service to




                                                                                                 product

                                                                                       Service
                                                        ...to service providing
    differentiation




                                                             manufacturer...
                                                                Services

                                 From manufacturer...           product

                                   Core-
                                          Services
                                  Product



                                                                          Contribution of services to total
                                                                          revenues

5
Services in Reference Station Networks
Motivation




6
Services in Reference Station Networks
Why are services attractive for the customer?

A potential RTK network operator

 has to manage complex technology

 faces continuous technological changes

 needs to provide 24/7 service

 wants to reduce capital outlay




7
Services in Reference Station Networks
Why are services attractive for Leica?
Business
 Source for additional revenue
 Increasing customer loyalty
 Differentiation

Technology
 Internet is closely integrated into our RS products AND
 The Internet is an ideal tool for remote service/mainentance
 Strongly centralized components (data centre)

People
 Use competence built up over the last years



8
Services in Reference Station Networks
Overview

Traditional services

 Training

 Software and hardware installation

 Software and firmware maintenance contract

 Hardware extended warranty




9
Services in Reference Station Networks
Overview
New perspectives

 Customization

 Consultancy on network architecture

 Implementation of network (site selection, full installations, coordinate
calculations)

 Providing active support on new & existing customer’s networks

 Hosting customer’s network


10
Services in Reference Station Networks
The Leica Spider Control Center



 GNSS Hardware owned by customer

 Central management

 Hosted in data center

 Leica invoices customer on a monthly rate for the service.




 11
Services in Reference Station Networks
The Leica Spider Control Center - Conclusions

 Technically feasible

 The larger the network, the lower the running costs

 Most expensive parts are renting the servers, access routers and ISDN
subscriptions

 Transparent for all customers

 Needs to be validated by pilot project




  12
Services in Reference Station Networks
Overview

Highest level of service

 Leica as network corrections provider

 Today’s example: BRISNET




13
Services in Reference Station Networks
Challenges


 People: High level of expertise required!

 Liability

 Competing with customers




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Services in Reference Station Networks
Challenges

What resources/skills/infrastructure do we need to control, monitor,
operate and administrate a Network ?

• Human resources (engineering, sales & marketing, logistics,
  accounting)

• Technical expertise (Geodesy/GPS + IT + communications)

• Technical infrastructure (Buildings to host HW + IT + communications)




15
Brisnet
Business Plan

16
    Current Market Situation
    Overview

          Existing reference stations

          Market shares (GPS, GIS, MA)

          Feedback from the market

          Opportunities

          Technology & competitor analysis



References: PWC, CR Kennedy, North Surveys, CWDC Surveys, Hepburn&Thorpe civil contractor


    17
Current Market Situation
NR&M Network – Objectives & Status


      Partnership between Department of NR&M, Trimble and Trimble dealer

      To investigate technical and financial aspects of a VRS Network

      Established in 2001

      Brisbane to Gold Coast corridor, 4 sites




18
Current Market Situation
NR&M Network – Pricing & Results


      Administration handled by Trimble dealer (Ultimate Positioning)

      $AUD 7000.00 yearly flat rate

      $AUD 240.00 daily access costs (including rover hire)

      Results
        Mixed success
        Used by several private survey firms and the QLD road department




19
Current Market Situation
Other Base Stations


      Private surveying companies discussing user group

      CR Kennedy base station running GPS Spider




20
Current Market Situation
Leica vs. Competitor – GPS Surveying




      Brisbane area total 22 Leica customers with 66 GPS units
21
Current Market Situation
Leica vs. Competitor – GIS

      3 units/year through CR Kennedy

      No market feedback received from CRK

      Trimble having obviously lion share of the GIS

      Trimble dealer hiring dedicated sales person




22
Current Market Situation
Leica vs. Competitor – MA

      Last 12 months disappointing

      Strong product basket – future opportunities presenting themselves

      Leica in Brisbane area: Currently 2 graders, 1 compactor, 1 dozer

      Trimble as the market leader (80%)

      Topcon #2 in 3D and #1 in 2D

      Topcon recently opened R&D facility in the Brisbane region



23
Current Market Situation
Feedback

      NR&M
        Concerned about second network running in parallel
        Interested in testing SpiderNet
        Future shared data streams or cooperation are an option


      Private surveyors
        Generally positive
        Questions on pricing, stability, accuracy, localisation, legal issues


      Civil contractors
        Very positive feedback
        High interest in reference station network
24      Questions on localisation
Current Market Situation
Feedback

      CR Kennedy
        Questions on funding, installation, managing and maintenance
        Understand importance for SmartStation sales
        Concerns of lower Base Station sales




25
Current Market Situation
Opportunities

     GPS Surveying

      Customer awareness of Network RTK

      Improved productivity by converting base into rover

      Increase rover sales through ease of use

      SmartStation

      Hire options for rovers through distribution partner

      Non-traditional markets
26
Current Market Situation
Opportunities – others

     GIS and mapping

      Increase rover sales through ease of use, demos

      Mapping division office now located in Brisbane

     Machine automation

      Increase productivity with RTK network

      Use of SmartStation for MA



27
Current Market Situation
Technology Analysis – Current Situation

     Software – GPS Spider

      Spider 2.0 with SpiderNet released

      Extremely positive feedback

      Gained significant technical experience

      Made a big step

      Will continue to improve to catch up completely



28
Current Market Situation
Technology Analysis – Current Situation

     Hardware – GRX1200

      Competitive product

      Several USPs

      More improvements planned




29
Current Market Situation
Technology Analysis – Future Trends

      Additional signals

      Localisation of RTK corrections

      Close integration of web platform and RTK software

      Receiver as client in the internet (email, FTP)




30
Current Market Situation
Competitor Analysis
Trimble




      25-30 networks, 1500 receivers
31
Current Market Situation
Competitor Analysis
Geo++




      20 networks, 700 receivers
32
Current Market Situation
Conclusion


      Currently strong #2

      Competing with Trimble

      Overwhelm Geo++

      Thales, Topcon and Sokkia currently no threat




33
     Current Market Situation
     Internal analysis

Strengths                                   Weaknesses
 Brand                                      Current distribution agreement
 Ownership of core technology               no cable-less all-on-the pole GPS
 Brisbane as technical base                solution
 SmartStation                               No dedicated RS resource yet
 Spider
   “4A” as core component of Spider
   Flexible and modular software package
   First software with RTCM v3
 CR Kennedy sales & support



     34
Providing an RTK Service
Brisnet – Proposed Network




35
Brisbane Network – System Architecture
                                                                                                            MAX
     CRK
                                                                                                          Auto-Cell




                Site Server
RC    Remote Control

FTP   FTP Data push
                                              Site Server
 FD   File & Raw Data
                                            Network Server
      Data Archive
                                            Cluster Server
                                  Receiver control (except CRK)
      CC                                Raw data storage
                                            Processing
                                                              user2
                                        User Management
                          ADSL




 RC
                                                                          RTK Proxy Server
                                                                            Web server
      IC                                                                   RTK Data distribuiton
                                 Ethernet
                                                                      Post-processing data distribution

 NC

                     SI

                                 LGS

36
Network Service Promotion and Marketing
BRISNET
Promotion Launch for this service will need to be split into the three main
categories to be of benefit to both our sales teams and customer bases.

 Surveying Customers


 Machine Automation Construction


 GIS and Mapping




37
Launch And Promotion
Launch Location: Brisbane R&D Centre




38
Launch and Promotion
Surveying Market
Who to Target?
Traditionally Leica and our Partners launch products to our best
customers.

“CHANGE” is needed

SURVEY Companies with Manufacture product MIX
         Ideal CUSTOMER opposition GPS and LEICA TPS


SURVEY Companies only using COMPETITOR equipment

OUR TPS only CUSTOMERS

AND OF COURSE OUR GPS USERS

 39
Launch And Promotion
Surveying Market
FOCUS - LEICA GEOSYSTEMS the SOLUTION SERVICE Provider
Product focus
             SPIDERNET
             NEW ROVER (subject to timing)
             SMARTSTATION
             GPS Monitoring
             ROADRUNNER
             Overview all other GPS products


Location - The Brisbane R&D centre.

CR Kennedy and Co our Surveying Products partner

The Launch can provide the opportunity for customers to view the Data centre
in action

Customers will benefit from an incite into the future directions of Leica
Geosystems in Brisbane.

40
Launch And Promotion
Our Tools Surveying
Video Presentation and Hands on Field Day Theme

Network access demonstrations

Data Flow Demonstrations and Roadrunner

Technical Specialists to handle Solution enquires

GPS on site Demonstrations

SmartStation on Site Demonstrations



41
Launch and Promotion
Machine Automation Market
Who to Target?

SE QUEENSLAND CIVIL CONTRACTORS (DIRECTOR Level)

SE QUEENSLAND CIVIL CONTRACTORS (SITE Superintendents)

CIVIL CONTRACT SURVEYORS

PLANT HIRE COMPANY MANAGERS

A MIX of LOYAL and COMPETITOR users




42
Launch and Promotion
Machine Automation Market
Location Brisbane R&D centre and the Ipswich test site
Theme “Solutions service”
Highlighting “Advantages of MA using Reference Network”
Promotional Video and presentation of Leica MA products
utilising a reference network
Promotion of Solution service in MA
           Product solution to suit their needs
           Installation
           GPS
           SmartStation
           Localisation and Data Management services
           Support
Overview of other non GPS product offerings and the R&D
Centre role.



43
Launch and Promotion
Our Tools Machine Automation
Video Presentation – Spidernet and MA Products
R&D Product specialists

Virtual Data Flow Demonstrations – Design to Machine
Virtual Localisation Demonstrations

GPS Guidance and the Reference Network
SmartStation Gradestar Grader and the Reference Network

Ipswich Test Site
GPS Gradestar Dozer
GPS Gradestar Grader
3D Excavator



44
Launch and Promotion
GIS and Mapping
GIS and Mapping are now based in the
Brisbane office. We will utilise their Australia
wide customer base to launch and promote the
network. These customers along with our GS
product users and users of competitor
products will also be invited to a launch of this
network. Utilisation of the Brisbane R&D
centre for this group will again be cost
effective and suitable. The Launch will focus
on:
    Networks and Mapping
    Our GIS product basket
    MobileMatrix
    GS Products and the network
    Service Products




45
Launch and Promotion
Media Advertising
Local News Papers and Television will receive press releases of the
launch.

Construction Magazines and the Surveyors Position magazine (6 months
each) Budgeted $AUD12000 pa.

Seminars and Survey conference Papers ( “The service Advantage”)

Leica Geosystem Website

Mail out to all Survey companies (competitor users included). As the
Surveying industry is small this can be the best form of notification.



46
Launch and Promotion
Long term Promotional Tools
Mail out flyers following launch at 3, 6 , and 12 month intervals to
maintain customer awareness and momentum.

Detailed Network specification and service sheets

User friendly versions for our civil and machine customers.

Progress to web based customer service communications.

Progress to web based sales of the network service. The customer can
purchase and register over the net.

MA Sales to have GPS Gradestar in Vehicle



47
Marketing
Markets “Outside the Box”
A Reference network in South East Queensland will offer Leica
Geosystems and Our Distribution Partner the opportunity to think “Out
Side the Box” and offer Solutions in Non Tradition markets for our region.

Brisbane will soon become one of the largest container terminals in
Australia. Interest has been expressed in using GPS to track materials
movements.
Emergency services management.
Marine services Management
Port and Morton Bay Dredging management
Truck fleet management




48
Distribution Method
“Stand-alone Commercial Venture”

As a viable commercial venture the RTK Reference Network will require
efficient channels for distribution.

It is Planned to include our Australian Partner CR Kennedy and Co in the
distribution network. A “spotters fee” of 10% for the sale of an annual
package will be offered.

Direct sales through Leica Geosystems Brisbane.

Web Based registration and sales is a future proposal

Further planning may include customer “spotters fee” discounting.



49
RTK Correction Delivery Service
Pricing
Market Feedback Considerations
From our Customer feedback its is not surprising - price is an issue.
To achieve value for Leica, service pricing has to match the user needs
and equipment.
SmartStation’s use of the network is minimal. How to achieve value for
Leica?
DGPS vs RTK value to the customer?
GPS Machine Automation users require continuous multi user access.
Charges on a time basis is not viable for contractors. They are only
concerned with Machine cost per month.
Further in depth market investigation will provide clear understanding of
the pricing options available to us, to provide the best priced service. This
research is recommended.


50
Pricing
Service Package options
Annual RTK correction

Unlimited access fee per rover $ AUD7000.00 per year.

This will match our competitors pricing and will offer the most cost
effective solution to the customer if the service is used more than 35
weeks per year

For example - usage of 48 weeks per year, 30hrs per week the rate is
$AUD0.08 per minute

Additionally it will be beneficial to SmartStation Users, who have multiple
daily setups.



51
   World Wide
   Price Comparison

           SAPOS NETWORK GERMANY
        RTK ACCESS RATE 0.10 EURO Per Min
                 Approx $AUD0.16




             SWISSTOPO
          AGNES NETWORK
RTK ACCESS RATE CHF0.70 Per min
           Approx $AUD0.76




   52
Pricing
Service Package options
Short term RTK access

An initial log on access fee of $AUD10.00 and $AUD0.13 per minute there after. For
6 hours a fee of $AUD56.40

Without an access fee our administration costs could be very prohibitive to this
service. Under 3 days per week usage this is a cheaper alternate whilst not
inhibiting our returns from the user.

 The Access fee is also placed to gain benefit from our Smartstation users. As this
product only accesses the Reference network for a very short period. There is a
need to financially capture this usage. Each setup will cost the customer
$AUD10.13

Further market studies will need to be completed to understand the customer
perception of charges and the Smartstation



53
Pricing
Service Package options
DGPS access
This service is priced at 33% of RTK pricing

Machine Automation access
There are of course the RTK options above.
However a more beneficial offer to our customers is available through
radio communication systems.
To initiate a customer to this service firstly there is the radio receiver
cost. These costs can vary and have not been finalised, for the purposes
of this plan a generic costing of $AUD3000.00 has been used.
It is proposed to charge our GPS Machine Automation Customers an
annual hire fee for this service of $AUD2500.00 for the customers first
Machine and then subsequent machines at a rate of $AUD500.00 per anum.
 Support service for Localisation and Data management at the rate of
$150.00 per hour.

54
Pricing
Maintenance Package
Customers will be offered a support contract to assist their employees
with training and access issues.

This contract will need to be non negotiable to the customer and
marketed as part of the package.

The Suggested fee is $AUD500.00

This will result in an annual RTK access fee of $AUD7500.00 (7000+500).




55
Financial Analysis




56
Financial Analysis




57
Financial Analysis




     Summary – Hardware components $AUD155,424.00
                     GPS Software                    $AUD 92,314.00
                     IT components                   $AUD 16,988.00
                     Eng and Install                 $AUD 22,400.00
                     TOTAL                           $AUD287,127.00
     Note: Pricing Australian dealer Landed costs.

58
Financial Analysis




59
Financial Analysis




60
Financial Analysis
Summary
The analysis has be used to assess the customer base required to
achieve a break even situation against operational expenses.

The revenue and expenses listings on the previous pages indicate a
minimum customer base of:
15 RTK or Smartstation users
10 DGPS users
10 Civil Construction GPS Machines

Given the SE Queensland market Size this an achievable target.
Not taken into account is the additional sales generated due to the
Network.



61
Risk Analysis
Factors effecting a positive performance from this Reference network service
business proposal.

Competitor NR&M expansion with the support of there sponsor Trimble

Pricing competition with Trimble

Customer failure to acceptance the service in preference to individual base
stations

Having the internal resources to provide our solution service

Will the radio Solution for MA provide the continuous correction service to the
required accuracy and range?

Finding a radio solution including user authentication


62
Conclusion
Continued communications with the Department of Natural Resources and Mines, to gain a full
awareness of our competitor and understand their future directions. As the governing survey
body in Queensland it is important to maintain this relationship at a high level. Keep open the
option to use their bases to stream data.

Complete a full market investigation of the customer base for all segments. Particular attention
to Non survey opportunities.

Finalise agreements with base station location providers.

Continue planning network implementation to meet BU rover product release date

Investigate solution abilities within LGS to ensure we have the necessary resources.

Test through the Brisbane R&D the radio correction flow limits.

Proceed with the Network.




63

				
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