A black box is guiding me to the stock market
A black box is guiding me to the stock market
Business News

A black box is guiding me to the stock market

It all began in a garage in Turin. And now, with his Viasat, Domenico Petrone has his sights set on the Milan stock market. Thanks to the black box the government wants to install in every car

by Francesco Signor

Forty-five million euros in billings, of which 80% in Italy, 220,000 customers, four operations centers (Rome, Turin, Potenza and Aquila) and two factories in Venaria Reale, just outside Turin. Just a few numbers to plot the success of Viasat, the Piedmont-based company leader in the sector of satellite protection, security, assistance and logistics devices and services.

A sector that has been buzzing ever since Italy's Monti government announced liberalization measures for insurance as part of its Salva Italia (Save Italy) package. "Finally, these measures put into force what we have been saying for some time," explains Domenico Petrone to Panorama Economy.

Petrone, president of the Viasat Group, was recently named 2011 Businessman of the Year in the Technology and Innovation category by the Ernst & Young consulting firm. "The black box that will be installed in cars makes it possible to avoid insurance fraud and fake accidents because it certifies what occurred 70 seconds before and 70 seconds after the incident in order to know exactly what occurred with the accident and - no less important - allow the operations center to determine in real time the gravity of the accident in order to get emergency services to the scene quickly."

If anyone thinks Viasat is just a sophisticated satellite burglary system, they should think again, because the devices made by the company in Venaria are much more. They can manage a broad range of services that extend from emergency roadside assistance to real-time assistance, vehicle pool management and merchandise transport tracking to improve safety and optimize operating costs. And we're not talking peanuts.

A Transport Ministry study estimates that the logistics system in Italy loses over 40 billion euros each year due to network inefficiency and congestion. But that's not all. As Petrone envisions it, the Viasat project is much more. Above all, it is confirmation of an idea he has harbored for a long time. "We are living proof that electronics can be done in Italy as long as it produces high-technology components," he says with visible pride. "To do this, however, major investment in innovation is required, as we have done in the past and will continue to do: 5% of our billings each year, or two million euros." So, for the owner of Viasat, "there's no reason to close factories in Italy and go to China. That way, you lose control over the technology and production supply chain, and the intelligence and ability to design and produce in Italy exist."

Said by someone who started thirty-seven years ago in a garage in Turin and not in the Silicon Valley, we can believe it. In fact, before Viasat, there was Elem, Petrone's first brainchild and which became a success in the electronics sector thanks to its know-how in processes that allowed the company to make the leap from industrial automation to cutting-edge information technology.  Petrone learned the ropes at Olivetti, producing computer mother boards.

Today it would be called outsourcing, but back then it was called jobbing-out in order to maintain greater cost flexibility. "We were the first suppliers on a world level and we produced over half a million computers, printers and copiers," he recalls.

But the real shift came in the 1990s when Elem industrialized and began to produce the first satellite route planners for Sepa-Magnet Marelli. "For thirty years we manufactured for third parties, specializing in process management rather than individual products. A winning hunch that allowed us to structure the plant into production islands on the basis of process logic," Petrone explains.

This makes it possible to produce for more than one client at a time and asynchronously, without committing the entire factory to a single product, while also making it possible to quickly re-tool equipment for other products. "If you do something for thirty years and you're not a total fool, you become good at it," he adds with a wink. And so it was, and at the start of the millennium, Elem designed and manufactured the first satellite device that integrated three technologies: GPS, GSM and computers.

An interactive navigator whose core is the operations center and not just the inside of the famous black box."At the beginning, we tried to sell it to Viasat which was a major client, but we did not succeed." So, Elem's founder decided to buy them up. "Viasat was born as part of Telespazio, then FIAT-Magneti Marelli and SEAT-Telecom Italia came into the picture, a joint-venture between big-name brands. We at Elem Group were certainly not on the same level as these giants which had the right stuff and expertise. But despite this, Viasat was not working. The company continued to lose money and they were about to close it. At that point, we took over."

It took major investment to restructure and modernize the company, continued in the years which followed to keep it up-to-date from a technological standpoint, all financed from within the company. And in coming days a new, very small satellite device will be launched with unique features, guarantees Viasat's owner. And with it the company intends to revolutionize the market. It is a project that also includes plans for international expansion. The group, owned 100% by Petrone, is scouting abroad to identify similar companies to acquire in view of potential listing on the stock market. "Becoming quoted is on the books, but we need to be cautious and wait for the right moment."

In the meantime, Viasat has become the third partner with a 5% share of Israeli-owned Pointer Telocation, the third largest player in the world in technologies and services for the automotive industry, with over 65 million euros in billings, a presence in forty countries and quoted on NASDAQ. Synergy in terms of product and technology to do business together in Europe and throughout the world. And an initial entry into the stock market.

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