Hertz

"While the rental industry overall was slow to computerize, the larger regional players were more tech-savvy. By 1997, nearly all of them, including Hertz, were running on software developed by a company called Wynne Systems. This told me that the software was capable of managing hundreds of thousands of pieces of equipment flowing on and off jobsites. I bought Wynne. Owning Wynne accomplished two things. We had an industry-best platform that we could continue to develop internally for our own use, and the acquisition gave us access to aggregated, anonymized data on macro-trends across the industry. This gave us a high-level view of emerging market trends, such as equipment gluts or shortages in the making. We could proactively adjust our pricing and asset management, while the rest of the industry was being reactive. For example, if our data flagged an instance of too much equipment of a certain type in the Southeast, we’d lower the rental rate there and target customers who wanted the machine for several months, rather than just days or weeks. In other words, we were able to manage our rental rates efficiently based on equipment utilization to get the best return."

"I was discussing the construction industry with one of the analysts when he asked me what I thought about going into construction equipment rental. I hadn’t heard of it, but I kept an open mind. It turned out to be exactly what it sounds like: Companies buy machines like boom lifts and backhoes and rent them out to contractors who need the equipment but don’t need to own it. My team and I moved fast to scrutinize the industry before concluding the big trend was the most exciting we’d come across so far. The addressable market had only 15 percent rental penetration, which didn’t make any commercial sense. A lot of the equipment in the remaining 85 percent was sitting idle on worksites getting rusty and dusty. We could capitalize on that disconnect. In addition, the equipment rental industry was growing organically; had only one national provider, a subsidiary of Hertz; and offered thousands of potential acquisitions, without widespread computerization or standardization. It was a big, juicy opportunity, and only a matter of time before economist Adam Smith’s “invisible hand of capitalism” swooped in. United Rentals was born."