Software company capitalizes on machine-to-machine technology

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MEET STRATTON NICOLAIDES

Job: Chairman and CEO of Numerex Corp.

Age: 59

Family: Wife, three adult children, three grandchildren

Education: Bachelor's in business administration from St. Joseph's University in Philadelphia

Hobbies: Reading, cycling and chess

Reading: "The Historian" by Elizabeth Kostova, and "A War Like No Other" by Victor Davis Hanson

Event that shaped your life: Getting married at an early age

Atlanta-based Numerex sells “smart” software and gadgets that allow machines to directly communicate with each other without human involvement.

Technology from the publicly traded company enables vending machines to automatically report when the supply of sodas is low and dispatch a truck to fill it up. Or when a gasoline station is running out of unleaded regular and needs immediate attention.

If you’re the one who needs to know, the information can be transmitted to the smartphone in your pocket, said Stratton Nicolaides, chairman and CEO of Numerex.

If you’re running a trucking company, Numerex’s products can tell you where your trucks are, when they stop and for how long, Nicolaides said. The company’s “M2M” (machine-to-machine) technology can tell when drivers start dosing off and send an alert.

For the first nine months of 2012, the company posted revenue of $48.6 million, up from $42.4 million for the same time in 2011. Earnings rose to $6.6 million from $1.2 million.

Q: Can you explain M2M in simple terms?

A: It means linking machines to track any kind of asset over a network. Our tagline is, "Smart data delivered."

Q: Could you give me an example?

A: In real estate, our customer solutions could monitor how many times lock boxes on houses for sale are accessed. Or how many agents were in the houses, for how long, and customers would see a report. You could set it anyway you want.

Or if you owned vending machines, our technology could tell you if a machine has been unplugged. Or if it accepts cash, whether the box is full. Any information like that can be sent back to your data terminal or iPad or smartphone. If a machine runs out of a particular soda, customers would automatically be told.

Q: Who are your customers?

A: We operate in the business-to-business market; our customers are not consumers. Our customers are dry cleaners, oil pipelines, anything you can think of that can be monitored, measured or tracked. If somebody wanted to monitor crash barriers on highways, they would put a sensor into the crash barrier and be alerted when it needed to be repaired.

Or a customer could keep track of how many beers were sold in a stadium, and what kinds. We have a number of customers who are dealing with retail types of applications, such as knowing how many bottles of soda are on a shelf at any particular time. This is a typical solution for what is called supply chain, and it is an area we are very interested in.

For instance, we have a particular customer who makes pallets. They embed a sensor that can track a pallet anywhere in the world, and also what is on the pallet. That pallet can end up in a supermarket, and inventory being delivered can be tracked that way.

Q: How does machine-to-machine technology work?

A: Machine to machine refers to technologies that allow a device, mostly a sensor, to draw raw data from an asset and transmit that to an application that turns that data into actionable information. It's a combination of devices, software and services that operate with little or no human intervention.

It is a booming industry.

Q: How many employees do you have?

A. We have 150, with 95 in Atlanta, 30 in Dallas, and others scattered around, including in the United Kingdom. About a third of our workforce is engineering related.

Q: What is it that you sell?

A: We provide the entire ecosystem, all the necessary components of an M2M solution, from a central site. The sensor is nothing more than a device. Its purpose is to draw the data out of the machine. Whatever the device, it sends that data to a mobile application like a smartphone.

We have it all under one roof. We serve all our customers worldwide from a single site. We have well over 1.7 million subscribers and we generate billions of messages for a variety of different applications, like vending machines as only one example, lock boxes, fleets, cars.

Q: Cars?

A: We have solutions that can remotely monitor and control cars. If the vehicle is stolen, the tracking solution can kill the motor if it stops. One application, in the sub-prime lending market, is if you have difficulties with your credit and you need to buy a car, they will put this sensor in your car by agreement. If the payment isn't received, it will shut the car off so it can be located and repossessed.

Q: Do you also work with the federal government?

A: We play a critical role in the support of FEMA's disaster operations. We provide continuing managed services for its Asset Tracking System, which includes tracking of all FEMA owned and commercial owned trailers and equipment as they are moved to support bases. The system provides near real-time tracking of relief supplies as they are transferred into disaster areas.

Q: What are the challenges of running this company?

A: In any industry like ours where regulation and technology are in flux, we need to be attentive to changes in the environment and to be familiar with the challenges our customers have to face. One of the biggest challenges is finding good people who understand what we are doing.

Q: What do you see in the future?

A: Nanosensors, which are sensors at the molecular level, will play a greater role, especially in healthcare. For instance, nanosensors would be inserted in our bodies and would monitor early warning medical signals that could be screened by healthcare specialists whom we've never even meet and who might not even reside in the same country.