Nomad Digital is an example of a “solutions” business model. The company provides wireless communication solutions for the rail transportation industry by providing both devices and services to rail franchise operators as well as rail engineering and manufacturing companies. These solutions are used for passenger internet services, rail service information displays, and rail operator maintenance and monitoring. While Nomad has developed and patented specialized networking equipment, the company’s true expertise is in deploying and integrating an overall system, and does not sell its networking equipment separately. Thus, Nomad is an exemplar of a solutions business model, and not a product business model.
Nomad Digital was founded in 2002 by Nigel Wallbridge and Grame Lowdon. Observing the prevalence of high-speed wireless services in Canada, the two thought of applying such technology to non-fixed settings, with trains seen as an ideal candidate.
Nomad developed key technologies for its wireless product, particularly the ability to use multiple simultaneous mobile 3g/4g connections for high sustained data rates in order to satisfy large numbers of passenger connections. This train wifi service is the most visible to consumers, but a key part of Nomad’s business is utilization of this wireless capability for a variety of valuable services for train operators. This includes data connections for information displays, real-time status monitoring of train systems, fleet monitoring, and CCTV security systems. As opposed to the ‘nice to have’ passenger internet feature for rail operators, these latter services help operators deliver on their core performance goals of reliability, utilization, and safety.
Today, Nomad is one of the largest providers of rail internet communications equipment and can count high profile customers such as Eurostar, Virgin Trains, Bombardier, and Alstom amongst its customers.
Nomad Digital markets to two customers; train operators such as Virgin Trains, who may elect to implement Nomad’s wireless systems to existing rolling stock, or rolling stock manufacturing companies such as Bombardier and Alstom, which would select Nomad’s solutions as part of proposed new rolling stock.
Learn more about the Solutions Business Model
A dyadic relationship where your physical good or service can only be designed and delivered after prior interactions with the customer.
Engagement — Value Creation Proposition
Nomad’s value creation proposition focuses on its knowledge of deploying communication systems on trains. It allows train operators to provide their customers with wi-fi services on board, even while the train is moving at high speed. Nomad also provides train operators with tools to monitor the wi-fi network – to see, for example, what the signal’s strength is and whether it is working – in real time.
Delivery — Value Chain
Nomad designs central control units that aggregate the train’s multiple internet clients (passengers, component monitoring devices, etc) and route this traffic to multiple simultaneous wireless internet channels to the service provider. Upon winning a contract for a particular route, Nomad will partner with a wireless communications service provider (such as T-Mobile) to co-design the wireless transmission equipment along the route, where necessary. Nomad will also collaborate with the operator (or rolling stock manufacturer) in order to integrate the necessary equipment.
For example, in the case of the Heathrow Express, Nomad collaborated with T-Mobile to plan the 3g wireless reception along the main route and also with the rail operator for the deployment of 4g WiMax devices within the tunnel approaching Heathrow Airport and the appropriate 4g antennae on the exterior of the train carriages.
Rail operators can then utilize this communications ability either directly as a revenue generating service for passengers who pay for internet access, as an indirect revenue generation service via advertisements, or for core business efficiency enhancement such as component monitoring in order to optimize maintenance.
Monetisation — Value Capture
Nomad operates on a contract/project monetization basis – i.e., it receives payments upon completion of agreed-upon milestones.
East Midlands Trains Website: http://www.eastmidlandstrains.co.uk/information/media/news/Broadband-Boost-for-Thousands-of-East-Midlands-Trains-Passengers/
Nomad Digital Website: http://nomad-digital.com/nomad-digital-chosen-technology-provider-t-mobile-poland-largest-eastern-europe-wi-fi-multimedia-deployment-date/
Hitachi Rail Website: http://www.hitachirail-eu.com/hitachi-rail-europe-selects-nomad-digital-_104.html
Nomad Digital website, Heathrow Express case study: http://www.thejournal.co.uk/business/business-news/nomad-digital-train-deal-set-4470300
Disclaimer — Written by Matthew Fung and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016