Thanks, everybody. Welcome to Greensboro. Good to have everyone back at Gilbarco Veeder-Root, first time since 2004. Excited to have everyone here. For everyone I haven't met yet, I'm Matt McGrew, Vice President of Investor Relations here at Danaher. We have Lisa Curran, Vice President of Investor Relations at Fortive. I know some of you have met her in the past, but excited to have Lisa on board. Forward-looking statements, not going to read all these. I do need to say one thing. Today's presentation may include forward-looking statements, and actual results may differ materially from these statements. Please refer to the slides for more information. Okay, the agenda. Great day planned for you today. First, we're going to have Jim Lico, Fortive President and CEO, come up and give some opening remarks on Fortive. He'll have a short Q&A session after that.
Martin Gafinowitz, Senior Vice President of the Transportation Technologies platform, will come up along with some of his team members, go through some of the details of the platform, including GVR and Telematics, as well as talk about some of the opportunities for the platform going forward. Martin and Jim will have a short Q&A session after that. We'll ask that you leave any detail or specific questions on Transportation Technologies, GVR, Telematics until that Q&A session. We'll take a short break for about 15 minutes at a little bit after 2:00. A little before 2:30, we'll go through our tours and demos, get you out of your seats into the factory. Cocktail reception will start at 4:00, and we'll have everything wrapped up here at 5:00. Thanks again for joining us. Jim, bring on up.
Thanks, Matt. Good afternoon, everybody. One of the tried and true strategies that Martin Gafinowitz often employs when he reviews strategic plans with myself and the executive team at Danaher is to have a large barbecue meal right before the really important strategic discussions as a way to avoid conflict. We've attempted to employ that strategy today with you guys. Hope you enjoyed your lunch, and welcome. It's great to have you here. We were back here in 2004.
I was running the DBS office back in those days, and we certainly, I think if you were at that event, and you have an opportunity here to see what Martin and the team have done with the business here in the time between that, I think you're going to be incredibly impressed at the platform that we've created, not only really for success today, but also for wonderful growth and margin expansion into the future. First, we took the opportunity as we have at Danaher and several times, knowing that you've got lots of bags and water bottles and things like that to use the money that we would normally deploy on those kinds of gifts and really give it to charity. We've really focused on two charities here.
The Gilbarco team here in Greensboro has had a longstanding, almost 10-year tradition of building a home with Habitat for Humanity. We'll have money going to Habitat. Our Telematics team, a team that's only been with us a few years but has really looked at a global charity to really give the opportunity to all their associates to participate in helping cancer research. You can see all the number of charities that that foundation supports. A number of dollars that'll go to a great cause, and hopefully, that works out with all of you. I think as we've often said, we really want to make a difference more than just the great businesses we have, but we want to make a bigger difference in the world. By avoiding those gifts, you're helping us make that contribution.
Maybe first an update before we get into the business, a little bit on the details of the separation. July 2nd will be the date, with a record date of June 15th. The trading day will be slightly before that, probably. You know the stock dividend. The stock symbol, if you haven't seen it yet, is FTV. We announced the other day that the state registration statements have been declared effective with the SEC. We've received the favorable IRS ruling. A number of the regulatory things that we needed to complete are very much in the back burner at this point, and the leadership team's fully in place. We're very much ready for the separation.
I hope by the end of the day today, you get a great sense of the opportunity in front of us based on the quality of the businesses that we have and the opportunity to take advantage of the great things we have going at Fortive. First, who do we want to be? I think when you think about a diversified industrial growth company, a lot of things come to mind as to how you would answer that question. I think we're really going to tell you today in a couple of ways how we think a great company ought to be. The strength of our market-leading brands, the great positions we have with customers, the financial profile of the business, the breadth of the portfolio that we have for opportunity is really what you'll see today in spades. Let's get into that.
Many of you have seen this slide. We'll go into some detail in a variety of parts of Fortive. About $6 billion worth of revenue, a little over $6 billion worth of revenue, two segments that we will report in. We'll go into detail on those businesses. Not as global as Danaher. About 58% of our business in North America. That certainly provides a growth opportunity for the business to globalize the business in ways that we know how to do relative to our experiences at Danaher over the number of years. Our growth drivers, you'll see a number of them today, of really the growth drivers for the business. You'll see how Gilbarco and Veeder-Root and our Telematics, the Transportation Technologies businesses are taking advantage of those drivers, whether it be environmental regulations or some of the opportunities in innovation that come from energy efficiency, safety, security.
We certainly, as I mentioned, have an opportunity to globalize the business more. Certainly, a growing trend around the world of connecting devices with software and services. You'll hear from Andrea Mulhall today how we're doing that very specifically with Insite360 in this business, but I think it'll really give you an example of how we're doing it more broadly all around the portfolio. Our business characteristics are good, and we'll certainly talk a lot about this in later slides. Really the thing that gets excited about for us is good growth drivers, great financial profile with tremendous financial strength, and a team ready to take advantage of the opportunity. We normally don't put the entire organizational chart in front of you, but I think it's important for us to lay a little groundwork with you so you know the who in Fortive.
I think it's, the board, we're exceptionally excited about our board of directors with Mitch and Steven Rales, who have been the founders of Danaher, who will continue to provide great advice, and strategic insight to us, as well as be our large shareholders in Fortive. Alan Spoon will be our chairman. Alan, with Polaris Partners for a number of years. Alan will be our chairman, has been with the Danaher board for a number of years, over 17 years. Good continuity with, in terms of a lot of the things relative to how we create value in businesses, great strategic insight like they provided to Danaher with three new folks, with an emphasis really on technology and capital allocation.
Feroze Dewan from Tiger Capital, who really has been a great investor over time, really understands the world on a global basis, really is a tremendous asset to helping us think about the business differently. Kate Mitchell from Scale Venture Partners. Kate was a founding member of Scale Ventures out in Silicon Valley and brings a real technology bent to really understanding how to create value through capital allocation relative to technology. Israel Ruiz, who, as a financial expert, because he's the CFO of MIT, gives some great financial insight to help us understand the opportunities that'll be available to us financially. Also having, at the hotbed of technology and one of the best global technology institutions in the world, really gives us some insight as to some of those very early-stage things that are going on around the industrial marketplace.
Really give us an opportunity to really see around corners in new and different ways. That group as a whole really combines a number of years of experience, both in Danaher and outside of Danaher, I think, to give us a great advantage as we get started here in a month or so. The team, exceptionally excited about the team. A lot of years of Danaher experience here. Many of you have met Chuck McLaughlin, our CFO. Chuck has been with the company for a number of years. He's done some great things. He was Tom's partner at Beckman when we bought Beckman Coulter to really drive the improvements that were in the business there, do a number of M&A transactions that have accelerated our diagnostics platform.
His last job with us was running the largest platform in Danaher, the diagnostics platform, as the chief financial officer for that business. A lot of breadth of experience, both in Danaher and in acquisitions that really, I think is going to be a tremendous partner for me and the rest of the leadership team. You'll meet Martin. Martin's been with us for a long time. In Danaher, he and I have been partners since I started 20 years ago at Veeder-Root, and he was on the team at Veeder-Root. Martin's created a tremendous amount of value, and you'll see a lot of that today. Along with the other three operating executives, Pat and Wes, really make up a tremendously experienced operating team for Fortive.
Our M&A team, Raj Ratnakar and John Schwartz, have been with Danaher for a long time and give us both strategic insight and corporate development expertise. Raj has been with the company on a number of deals. John has pretty much been the corporate development leader as the number 2 guy for Dan's team for a number of years and has really been involved in almost every major transaction we've made over the last 10 or 11 years. Then you'll get a chance, if you happen, to say hi to Barbara Hulit. Maybe you know Barb. She ran Fluke for a while. She, for a number of years, did a great job at Fluke, has run our DBS office for a number of years now.
Great insight, will come over and not only run DBS for us, but also high-growth markets and a number of other opportunities to help us be a great partner to me and the rest of the team. Stacy, probably not someone you've met, but I think really a great partner, been with Danaher a number of years. Then Peter Underwood, who's the new one to the team, the only outside hire on the team. Peter's a great legal partner for us and he's here today as well. His last job as general counsel for Regal Beloit really gives us that expertise that from a public company perspective, that I think really rounds out the team from an experience perspective as well. That's the team, and we're exceptionally excited about it.
The thing that makes me more confident about the success of Fortive is the fact that unlike a lot of companies who try to bring a continuous improvement culture to their company, we have 24,000 team members around the world that have been steeped in DBS. Wherever you go, anywhere in a Fortive company, that's going to be a company that has had a lot of experience with the tools of DBS. That's really what gives me the confidence that we know both on the lean side, we'll talk a little bit about that, but also on the growth side. With 10,000 growth leaders, whether they're engineers or sales and marketing folks, a tremendous opportunity to leverage the success that we've had in the past, the skill set that we've had in the past to the Fortive businesses.
When you think about the breadth of experience, not only with that team, but the leadership team, 200 acquisitions, almost 100 years of Danaher experience, it's really, I think, a very experienced team on a go-forward basis. We'll talk about the platforms a little bit, but just to kind of give you a little bit of a sense, two segments, professional instrumentation with about the same size. Professional instrumentation, a little bit higher gross margins, a little bit higher operating margins, but still two great segments. Really, what you see below on the page is really an outstanding group of brands and market positions. We'll talk a lot more about those as we get deeper into the segments and the platforms. First, professional instrumentation.
This is really a segment that comes together because of helping customers measure and monitor physical parameters and increasingly around helping them create actionable intelligence around the data and the measurements that they create. In field solutions today, two great businesses Fluke and Qualitrol, our largest platform within the segment. Good profitability, good market size at $7 billion in market size. These businesses really today provide online and offline software and monitoring tools, hardware and software monitoring tools to really help professionals think about reliability, think about uptime, and really try to help our customers think about new ways to bring the data to their uptime solutions.
Going forward, these businesses have an opportunity to build a platform around that, to build a great strategic platform around uptime and to really be, in terms of preventive maintenance, really a solution for a variety of industries, not just in utilities and in a variety of industrial applications, but also in biomed as well, with a growing biomedical business at Fluke. Really a great platform and a great number of extension opportunities over time. Product realization might be a little bit different name in terms of what you've seen before, but what brings these businesses together is really a common view about helping a multitude of industries think about how to help customers develop products in a variety of markets. At Tektronix, historically an instruments company, a test and measurement company, but increasingly more software and services, helping digital designers, helping engineers develop new products for next-generation technologies.
Invetech doing the same thing, but in the medical industry, primarily in the diagnostics markets. EMC doing that in very much a similar way for aerospace and defense, and increasingly in satellite markets. Their propulsion technology and their design capability and their deep understanding of customer workflows is helping them bring those technologies to small satellite technologies as that market continues to grow. A good set of new applications and a growing set of software and service models to build out and, with great global strength, help end users really understand how they can better grow their business through relationship with us. Finally, Sensing Technologies. Sensing Technologies is really a business that's been around Danaher for a long time.
At almost $500 million, it's a good set of businesses, good profitability, there is an opportunity to take the sensing information that we've created over time and create broader solutions around that, and really for IoT applications in a number of markets from food and beverage on through a number of other verticals. Industrial technologies is probably a little bit more of a technical equipment and component company, some software, particularly Transportation Technologies. I'm not going to steal Martin's thunder today around Transportation Technologies. You're going to get a deep understanding of that. A real opportunity, which you'll see in evolution over the last several years, is really helping the business continue to take it into new vectors of growth, new adjacent markets, and really build great capability for a number of great growth drivers around the world.
You'll hear about EMV today, what I hope you take away is a not just EMV story. What Martin will really talk to you about is all the other vectors for growth that really are in Transportation Technologies, whether it's the things that are right in front of us, or it's helping customers with advanced supply chains, logistics models, or helping people think about smart transportation as the world becomes more urbanized. We're attaching ourselves to some really great macro growth drivers over time. Automation and specialty is a business that you've known for a little while. Certainly, Jacobs Vehicle Systems, the initial starting point of DBS for Danaher 30 years ago, part of this. Our automation platform, I think, has really started to really change itself from really going after new and important verticals.
Obviously, you know the motor and drive business, what we've done, I think, in the last few years is really build that portfolio more around niche applications where we can really add customer value, but also help customers in great markets like surgical power, where we have tremendous technology and innovation advantage. In franchise distribution, many of you know about Matco because it's been a part of the company for a long time. You know about Ammco-Coats. Matco's story is just a wonderful growth story for us over the years, and it's probably one of the great examples of DBS or FBS really at its core, driving considerable improvement year on, year out, 23 of the last 25 quarters of mid-single-digit growth or better. It really shows and demonstrates the power of FBS or DBS in the business.
Hopefully that gives you a sense of these six platforms, what they do, more importantly, what they can do. When you look at our market position relative to the served market, considerable opportunity for organic growth, and real opportunity to create what I often call the flywheel, the strategic flywheel. You're going to hear about that in Transportation Technologies, where when that's done and done well, you've got a great example of it, that's really how we're going to spend most of the day. What that really means is using M&A on a consistent basis to advance strategy in the business. Sometimes that's bolt-on acquisitions to bring in technology. Sometimes it's maybe a slightly bigger business to take the business in a new vector for growth. Sometimes it's a high-growth market acquisition to extend our reach into a new part of the world.
When you pull all that together, I think you really build the flywheel, and we have an opportunity to do that in all of these six platforms. What you'll see today in Transportation Technologies is that done exceptionally well. One of the great things today is you're going to hear FBS and you're going to hear DBS probably so many different times. The first thing is they're the same. That's, to me, the great part of the Fortive story.
Those of us who've been around Danaher for a long time and love Danaher because of DBS, one of the great really things about Fortive is that we get to bring FBS into the company with the same passion, energy, and tenacity that's made Danaher so successful for a number of years is going to be that same way with the 24,000 folks that I talked about a few minutes ago. We'll talk a little bit about how that is a foundation for growth and profitability over time. First, the model. If you followed us for a while, you've seen this. It starts with leadership who's experienced, who understands how to apply these tools, not in one year, not in two years, not in one business, not in two businesses, not in just the core business, but also in acquisitions.
That leadership is very much a part of the Fortive leadership team, but also part of all of our operating companies that we have within the business. The lean tools, very often you hear a lot about those as factory tools, but in summary, those are really tools for thinking about reducing cycle time and eliminating waste. Those tools, whether they're applied on the manufacturing setting, you'll see that today, but you'll also see it in other settings as well. It's really the forefront of improving quality, delivery, and cost for our customers and as well as our shareholders. Then the growth tools. The growth part of the business, you'll see several examples of that today.
Gilbarco's a great practitioner of the growth side of DBS or FBS, it's really those three coming together, which really provides for the fundamental culture and competitive advantage that we have in the business. We've talked a lot about the great cash flow in the business and what that'll look like over the next few years, but we should also talk about the core growth opportunities because they are good. Number 1, you'll hear today, and I think in a number of businesses as well, the size and scale of our installed base and the strength of our market positions really gives us the opportunity to continue to build gain share in a number of markets, including high growth markets. That's clearly an opportunity for us over time. Some of those markets are noisy.
Obviously, not every market is the same these days in terms of high growth markets, but there's clearly opportunities over the next 20 or 30 years, certainly in the next 5 to 10 years as well, for growth in those selected markets. We're making those investments in a smart way as we see those markets play out. Regulatory opportunities. You'll hear a lot about EMV, but a number of other regulatory opportunities that really allow for us to really take advantage of our installed base, take advantage of our market position with a growth driver that may be happening to us over the next several years. You'll hear a lot about data, and I'm sure a lot of industrial companies talk about the data that gets created.
I think with us, it's really about a number of our businesses that are accelerating opportunities and to really use data, whether it's sensing or condition monitoring or robotics. A number of our businesses looking after and taking advantage of good market drivers relative to that. Creating more value with better customer relationships through software and through services. Finally, thinking about connected instruments. A number of software-as-a-service examples within Fortive today. We have a number of software startups within Fortive, and I think that's one of the most exciting parts of the Fortive story while still early on in our career or early on in our businesses, a lot of examples of software startups in the business. You've heard us talk about Fluke Connect and what the Fluke team is doing around connected data and factories to really add value into the business.
You'll hear about Insite360, and I'll talk about a minute at Matco in an automotive aftermarket application, which is very unique, all of which those businesses are really creating value through extended relationships with customers through SaaS. You'll hear today from Renaat, who talks about a very large software-as-a-service business, our telematics business. Our largest SaaS business within Fortive really not only gives us a great business model, but it also is something that we can replicate throughout the rest of Fortive. We're using the learnings that we have from a large scale $200 million-plus SaaS business at our telematics businesses to apply those lessons to what we do in some of these other opportunities. Matco is a great example.
Matco, one of our best businesses over time, and really the use of the FBS growth tools, web marketing to really, this business is a franchise model, and growth is partly determined by the number of franchisees you gain every year. Using digital marketing to really create a new relationship with people, potential franchisees, they've been able to accelerate the number of ads that they can do every year through digital marketing. Even more important than the growth of that is the quality. They understand a lot more about those people and can really get them ramped up and selling much faster with the tools of FBS. This is a very innovative business. Again, I mentioned a SaaS business using accelerated product development and voice-of-customer tools within our growth family of tools.
They've really brought together a number of product lines, including in diagnostics, that is helping drive their growth. Just continuing to be great at the tools of Lean, which have driven great margin expansion on a continuous basis. One of our highest margin businesses continues to be that way, as well as working capital turns as well. Great performance, a great road ahead as well. Innovation will continue to be a hallmark and an important part of Fortive. Technology leadership through innovation, thinking about how to solve big customer problems is a big part of how we think about innovation at Fortive. I mentioned maxME in the last couple of slides at Matco, and this is really helping our customers, mechanics, scale their business by being able to have a SaaS or pay-as-you-go model for diagnostic applications.
Instead of buying diagnostic tools for a number of automobiles that they may never do, they can download in a monthly subscription, they can download that diagnostic software for however they're going to use it. This just brings a brand new solution to the marketplace at Matco. In a business that traditionally we think of as maybe a toolbox and a ratchet business, bringing unbelievably innovative technology to the marketplace.
In Portescap, part of our automation business, we've really seen great innovation there, and as I mentioned, really thinking about surgical techniques and how to make that safer for the patient by having autoclavable technology, which allows for the instrument to be sterilized in a much faster way, in a much more complete way, and using the key aspects of miniaturization to really get that into new tools that are going in the market, which really gives us a great position in a very high-growth market. Tek is the leader in the world in oscilloscopes, and the first company to launch a 70 gigahertz oscilloscope. The top-of-the-line technology for the biggest technologies that are going on in the world really gives us an opportunity to bring patented technology to a lot of the high-speed bandwidth applications and data centers, wireless applications, and cloud computing.
Finally, Fluke, the leader in the world in digital multimeters and a great position in thermal cameras, brings those technologies together in a way that allows for a safer, more usable work experience for the end user, reinventing a category that they've been a part of for over 30 years. Not only makes the workflow streamlined through the data that Fluke Connect brings to them, but also keeps engineers and technicians safer on the job. A number of essential technologies for customers that we serve in new and unique ways that I think will continue to be a hallmark for us going forward. There's often been a story that because the margin structure for the business is very good, that maybe there's nothing left.
I think one of the big things to really take away from today is how we continue to be able to find margin expansion opportunities in all of our businesses. Whether that's some of our highest margin businesses that have continued to drive significant margin expansion over the last 3 years through the combination of lean tools, supply chain tools, smart pricing out of our growth playbook, really bringing great execution to continue to bolster competitive advantage and drive margin expansion. Or with many parts of the existing portfolio where we have that are below the fleet average, who have opportunities to really come up to that fleet average over time.
Two wonderful opportunities to continue to drive margin expansion, along with, of course, the healthy cadence of bolt-on acquisitions that are always coming into the business that provide opportunity for FBS in a variety of ways, whether it's in lean or growth, to really drive above-average market expansion in the new businesses. Clearly, three great examples of how we'll continue to drive margins in our core business over time. I think anyone who knows me, and the Fortive folks will probably laugh at this, know that there's always opportunity in all these businesses to continue to drive margin expansion. Qualitrol is a great example of that. Company that's been with us for 30 years, one of our highest margin businesses, as I mentioned, continues to drive margin expansion over the last 5 years through lean conversions, over 200 Kaizens over a number of years.
Great purchase price variance, continued great quality improvements. Then building competitive advantage through the growth tools, funnel management, and then reinvesting some of those savings back into the business to create that flywheel as well, along with some strategic M&A over some of the years in order to continue to build out that business. A great business in its market position really with utilities and power companies who are really looking for someone who doesn't supply the generation assets to really give them condition monitoring applications. Those are really applications and opportunities throughout the world. Hopefully, you get a sense of FBS is alive and well in the business, but it's also going to continue to provide a lot of opportunity into the company over the next several years.
Certainly, our opportunity is significant in part because of the great cash flow that we generate and our bias to deploy cash flow to M&A. It's a set of lessons that those of us who've been around Danaher for a long time have learned. It's a process that we've learned of how to do it, and we will apply all of those processes and learnings to Fortive. It starts with looking at a market. Do you like the market? What are the things about that? Do they have good secular drivers over the long term? Is it fragmented? It gives us more consolidation opportunities over time. Those are some of the principles in markets that we'll look at. We look at the company. Does the company have a good market position with potential to do more? Is it a leading player? Does it have a strong brand?
Does it have higher margin businesses in it? Does it have opportunities for higher margins as well? We really look at the value creation opportunity. Is it significant from an FBS perspective? Does it have synergies maybe with existing businesses, either at the operating company level or within the platform level? Very often, this will be a combination of value and growth deals. Some value, some growth. As you see some of the slides that Martin will have, you'll see a combination of those. Some acquisitions that were real turnarounds, and we did a great job turning around. In other situations, we may have paid up for a technology addition to the portfolio, but with a great global position, we could scale that tremendously in a short period of time to create value. That's the process.
When you think about that, what does that really look like in terms of our platforms? First is large value creating opportunities. A couple of examples there where there's big FBS opportunity to improve the business. Certainly, we think there are a number of those over time. A number of other things to add to those businesses, whether they're platform extensions where we have synergies. Some great examples here. You'll hear about all the Gilbarco examples over the next few hours. Certainly in a number of our businesses where we've really leveraged our strong brand and channel to create tremendous value or new growth vectors. Really trying to improve the portfolio of the platform through new vectors. You certainly are going to see that today in a variety of places at Gilbarco, but we really have an opportunity to do that in all the platforms.
As I mentioned before, here's some number of examples across the portfolio where today we've done some work to leverage ourselves in high growth markets, but still a lot of opportunity left. Some examples below where we've done some of this, but I think even more importantly, there's a number of examples that we think we have going forward to really do this kind of M&A throughout the portfolio over time. You'll see this slide for Gilbarco later. Here's the Fluke slide, and really, as you can see, done out over almost 20 years, $1 billion worth of capital deployed, 32 acquisitions, building a number of great businesses, strengthening Fluke in a variety of ways. You see that a little slower at the tail end, the last five years. That's part of what's the opportunity.
If I were to create this slide in a number of places, you'll see where some of that is slower over the number of years as Danaher has really moved to a different business model, therein lies the opportunities to bring that back and accelerate that at a pace that we're confident we can do. Obviously, the financial returns are substantial. Started with a $340 million business in 1998, roughly four times bigger. The operating profit dollars, though, are about 10 times bigger in that timeframe. The cash generated and the OP dollars are significantly greater, that's what's really provided for a really high ROIC over a long period of time, with additional runway to go forward.
I know the Fluke team, speaking for the field solutions team, they're exceptionally excited about the opportunity going forward to really deploy some of this cash to accelerate their business. That really builds this model that hopefully resonates with you, which is really think about our growth, which is probably GDP, maybe GDP plus in some times. Margin expansion on that of about 50 basis points. Use our free cash, roughly about $1 billion, to deploy primarily to M&A. Free cash will continue to be a critically important metric for Chuck and I, just as it has been for Tom and Dan and all of us who've been around the company for a long time. That free cash flow conversion ratio continues to be important for us. Investment-grade rating is important to us.
We feel we have a tremendous amount of capacity with the rating we have today. When you really look at that and run that flywheel, we really believe upper quartile performance and great earnings growth performance over time is really the model we'll really be running here. To sort of sum it up, a couple things. One, hopefully, you get a sense at the platform level of the quality of this high-quality, diversified industrial company. Six platforms with $500 million or more of revenue gives us tremendous scale in a number of markets, not only to build on the current business, but to help those management teams leverage into new vectors to build better portfolios in each of those platforms, and subsequently build a better portfolio for Fortive. I think that's what gets everybody in our organization tremendously excited about the future.
Hopefully, that's what gets you excited about the future as well, is that opportunity to do that. Do that, for us, in a culture that is so well-known to us and in an environment that we love, and that's FBS. It's the foundation for how we've built Danaher over a number of years. It's the foundation of how we'll build Fortive over the number of years, and we really believe that's one of the things that makes us truly unique amongst a number of companies that maybe are in similar markets and things like that. Finally, the capital deployment opportunity here. It's big, obviously, as a ratio to our revenue. We think it's a great opportunity to build a better company.
I think you've often heard all of us from Danaher say, I know Tom has said it a number of times, is really, it's not about being bigger, it's about being better. The opportunity for capital deployment is as much an opportunity to make our company better as it is about making it bigger. If we make it better, over the long term, it will be bigger. First and foremost for us, it's about becoming better. I think what you're going to see today is a real set of examples of how we're making the Transportation Technologies platform better through capital deployment and FBS, and ultimately be the story for all of our platforms at Fortive. With that, I'll take a couple questions.
Thanks, and congrats. Welcome. Sounds exciting. Jim, when you think about in 2003, 2004, Danaher had about $6 billion or so in revenues.
Yeah.
You were there, and you saw the playbook and saw what worked and what didn't work. Over that period of time, I'm not sure if the growth rate was enhanced a lot, but there was a ton of value creation. Now, you talk about taking GDP-ish type businesses and making them into higher growth businesses with M&A. How is that different from the playbook in 2003, 2004? Is it a nuance that you're just trying to buy better businesses? Or the reality is, if we look out 10 years from now, that you want to have a portfolio that's substantially different than it is today?
Well, I think we certainly like the portfolio we have today. I'd start first, Scott, with in that reference of 2003, about the size of Danaher, is about what we are today. I think it first starts with using M&A to make our current portfolio better in a number of ways. You'll see that in Gilbarco today, how it's so much better, and I think that's absolutely what we will do within the current platforms. While at the same time, and I think you see a board that's really built this way, is to help us think more broadly around the secular drivers that are really going to be outstanding for the next 10 or 20 years, and try to sort through which of those opportunities we want to go after, and then attach ourselves to them. Those could be within the current platform.
I think sometimes we get questions, are you going to be in healthcare? Well, Portescap's in healthcare. We're supplying surgical instruments. It's a good business. That's a way to play that market. Part of it will be within the portfolio to figure out how to attach ourselves to good, better secular drivers, and then also looking at maybe is there a new platform out there over time or something like that we could do as well. I think it's a combination of both, and I think that's exactly what you saw at Danaher in that timeframe, which was making the businesses that were there better. Fluke, Gilbarco, Videojet, Water all got much better during that timeframe. While at the same time, we added better, new platforms as well. I think, without forecasting the future, always hard to do, I think we'd see a combination of that.
I come back to the fact that these six platforms that we have today really do give us some really good runway to run that playbook.
Follow-up.
Just as a quick follow-up, what do you think the right level of R&D spend is for the organization?
We're at about 6% right now. I like that range. It gives us an opportunity to flex sometimes in some of the businesses where we have a bigger platform opportunity. I think six is the right range. Depending on the kinds of portfolio businesses we buy, that number may flex a little bit, because there is a fairly wide range within the portfolio today. I like that range. As long as we go after higher gross margin businesses, then you can pay for that kind of R&D. Steve?
Hey, Jim. Thanks a lot for today. It's really helpful. How are you sizing both M&As? The window of about $2 billion-$3 billion, sort of the potential over what number of years are you thinking? Also on that same front, dividend payout ratio, are you guys thinking similar levels to where Danaher has been? Then one follow-up, if I could.
Okay. We think about $3 billion. Your numbers are right in the zone in the next couple of years, that number around is about right for capital deployment. I think our payout ratio will be maybe slightly lower than what Danaher does today, and then grow it over time. Again, I think one of the big things about whenever I talk about dividends is our board is not constituted to talk about that. At the end of the day, that kind of policy decision, we need to be out on our own with the board having decision-making ability at that point to really talk about it and finalize it.
As a follow-up, FBS, clearly DBS massively differentiating you all. When you're looking at these targets, you mentioned higher margin companies, you talk about higher gross margin, are you willing and actually preferring in the same way you might have before to find the kind of high gross margin, low operating margin, operating improvement plays? Is that sort of very secondary to all of the strategic factors that you put on the table tonight?
I think over time, it will be balanced. In any one year, it's going to sway towards a couple of deals, and it's sometimes easy to think about, well, we're going in a different direction because of what we might have done in a particular year. I really like the concept of a combination of value deals that might be turnarounds, and then some additions from a growth perspective that might be slightly pricier, but are going to give us a better growth advantage over time. I think when we do that right, and I really think you're going to see that in spades today. You're going to see how that not only builds a better business over time, but is an incredible value creator for shareholders as well.
Yeah. Jim, over here.
Oh, Shannon. There you go.
You showed the Fluke example where you did a lot of acquisitions and then it kind of slowed. There's other platforms where you really haven't done much of anything. As you think about kind of the current pipeline by platform, where is it where you've been looking at some businesses for five years that you just go back to and pull the trigger and you didn't before? Where is it just trying to find something new because you never took a look?
Yeah, I think when you look at Fluke, there's a starting point there to work from and kind of go back to. Whilst maybe some of those deals had slowed, there was still some cultivation activity. You got a couple of platforms like that. Then you got Sensing Technologies, where we really haven't thought much about it in a few years, so we need to kind of go back to square one. Then maybe the rest of the platforms are somewhere in the middle there. We like where the funnel is now. It's a good starting point for us. We've staffed in the last 60 or 90 days, we've really amped up the resource deployment towards it. We'll see where it goes.
I really believe we're in a good position across all the platforms to do some things here in the next couple of years.
Just how should we think about the mix of hardware versus software service in terms of things you might be looking at?
Well, I think probably still more hardware, definitely from where we think about businesses. I think what we've seen, you'll hear from Andrea, when we do some small acquisitions in the software side and really amp that up, those businesses, so maybe on a revenue perspective, it may be small, but it goes bigger over time. That's probably the profile. Again, those things ebb and flow at times. The good thing I think about Fortive is with a number of these businesses and these software startups that we have throughout the portfolio, we've got a number of our business leaders who understand what those business models look like. Ultimately, that's one of the tricky parts about buying software companies, is understanding how to run them and how to build value there. We've got not only the operating level, most of our businesses understand that.
Quite frankly, we've got a board of directors who really understands that as well. Where?
Jim, I have one right here.
Jeff.
It's actually very similar to Shannon's, but maybe a different angle. As you've watched
these businesses evolve and not been active on M&A, have you seen things kind of trade away and move somewhere where they're kind of out of grasp? You're obviously very smart guys, you know your business, you know your competitors, you know what would've made sense to buy over time even though you weren't active. Is there anything that's just kind of changed competitively in the businesses that makes you. You talked about vectors. I mean, you're not going to sit idle and do nothing, but is the vectors in some of these businesses now different than what they would've been had you had free rein to do M&A over that timeframe?
Well, it's a big question because of a broad portfolio and a strength of positions. I don't think I can really point to one particular situation where we just completely went away and that opportunity completely went away. Generally, most of the markets that we like and are looking at may not be consolidated yet, there's still other opportunities there. I don't think of anything as really shut off. I would say on balance, a lot of them are still available. They may have traded into PE or something like that, or maybe they traded into another PE in some cases. In other cases, entrepreneurs decided not to sell. Just as some things go away, other things crop up. I think net, we're in as good a position as we were several years ago with really not too many vectors closed off.
Are we going next?
Just a question on growth, Jim.
There. Sorry.
Just a question on growth. You target GDP plus. If I look at the growth at what is Fortive right now, it's quite a bit below that. If I look at my universe, if I look at all the acquisitive companies, I mean, people are struggling to stay at zero. How long does it take to transition to this normalized rate of GDP plus for Fortive?
Well, I think certainly the macro, when you look over a long period of time, I think we'll be at that level. Probably takes a few quarters to start to get some of those things amped up and over time. I think the benefits of some things we've got going right now will help us into the second half. EMV will be a bit of a obvious tailwind here as well. I think in the next six to 12 months, we're in pretty good shape relative to GDP kind of growth.
Thanks.
Jim, just a question on margins. I just wanted to follow up on where you see the most scope for expansion. You called out that half the portfolio has below average margin. That will always be the case, I guess, mathematically. Maybe put it another way and talk about what the margin range is on the different businesses you have. Not the two segments, but one level down. How wide is the disparity on margins today? Or where do you see the one or two brands that have the most margin room for expansion?
Well, I think, first, we probably have a disparity between high and low that means that, yeah, there is an average, but there's a number of businesses that are maybe farther away and have opportunity. I think, certainly in our automation portfolio, I think even here in some of our businesses in Transportation Technologies, we've got some opportunities as well. I think those are just two examples of where we have opportunity. That said, we've got a lot of big platforms that have done a really good job, as I showed on the slide, who've continued to drive margin expansion despite high margins because of unique market positions, the ability to really bring more innovation, and you'll hear a lot about that today. Even in high margin businesses, we think we've got opportunities.
It really comes back to having a mindset that we can continue to drive margin expansion in every business and doing that on a across-the-board basis. Obviously, some better than others. Some we might relieve them of a little bit of their margin expansion in order to reinvest back in the business. You see a little bit of that at Gilbarco right now, to be able to take advantage of opportunities as well. On balance, I think there's opportunity throughout the portfolio. Where are we going? Cliff.
By creating Fortive, you've destroyed one of my great lines, which is the biggest asset at Danaher appears nowhere on the balance sheet. It's the Danaher Business System. Now I'm going to get to say it about Fortive as well. On that note, while you have certain requirements to preserve the tax-free separation status, would you give us some examples of how you intend or don't intend to cross-fertilize the Danaher Business System with the Fortive Business System over time? I don't mean over this transitional period.
Yeah. First, maybe a little bit of level setting. For the next couple of years, we have capability to share in tools and processes and those kinds of things. First and foremost, for the next couple of years, we don't lose anything. I think it starts with the people first. The fact that we've really balanced the FBS office and the DBS office at the two companies with seasoned people. You know Barbara, obviously. Barbara, who ran DBS for Danaher, Kirsten Poulsen, who ran the growth side, coming over to Fortive as well, but then a number of people like John Sekowski and others staying at Danaher. The balance of leadership and skill sets is very much balanced. I think Tom and I feel very good around how we've built out the opportunities. The new leader of the DBS office at Danaher is outstanding.
I think on balance, we're very well capable of being, if we had to, being completely independent with what we need to do going forward. That said, good friends never park too far away from each other. We've always done benchmarking with other companies over the years, and there's no reason why that can't continue in an informal basis.
Just going to go last question. Rick.
Rick.
Yeah. Jim, just two things. One is there any concentrated effort on your part to build out and expand the service and consumables piece of the business, which I think is 35% currently?
From an M&A standpoint?
Across the portfolio, about 20%-25% software and services. There is a deliberate attempt to continue to build on that. Yes. I think that percentage will ebb and flow depending on if we go buy an instrument company of some sort or a sensor company. I think when you look at, and you'll certainly hear today, is really good examples of how we're building that capability out in a number of the presentations today, deliberately through M&A, also through organic and R&D investments as well.
Of the six platforms that you bust out as part of Fortive, is there the same access to M&A capital to grow all six of those? Or do you view two or three of those as being cash generators?
First, it starts with the idea. If a great value-creating idea wins every time. If you go back to market, company ability to create value, that's first and foremost, if we see that opportunity within a platform to do something, that's how we're going to lead the effort. That's how you transform platforms as well. That's how you make platforms better. Best ideas always win. It's been that way at Danaher forever. There'll be some deliberate attempts around some business models like software and services in order to change the portfolio as well. Growthier value creation opportunities within all of those platforms are going to have opportunity. Again, those platforms, some of those will be different, and the best ideas will always win. Are we done? Thank you. You get another shot at me at the end, we're excited about that.
We're going to play a video here, but before we do that, let me introduce Martin. I mentioned before that Martin's been a great partner, and I guess partner in crime in many respects over my 20-year career. We started Veeder-Root together a number of years ago. I think what you're really going to see today is, he's been a part of this business for his entire Danaher career. He's been leading it for a number of years, and I think what you really see is really a great business leader who's really built an exceptional platform, but more importantly, not really focused on what he's built, but also focusing about where he can take it over time. I think that's one of the great stories about today in Transportation Technologies.
Gilbarco has been around 150 years, one of the great things about our visit today in the factory, it's too bad the folks on the web can't experience this. I think it's a very special opportunity to be here on the factory floor. A lot of heritage here in the business, a great company over a long period of time that has a great future.
While much has changed in our 150 years, one constant remains. Our focus on improving lives through groundbreaking technologies and world-class services. It all started when our company founders invented a way to light buildings outside of a city's main area by converting crude petroleum into gas vapor. Within 20 years, they had become the largest single retailer of gasoline in the U.S. As the automobile took hold, Gilbert & Barker saw the future of the company shift, over the years, the company led the evolution of petroleum technology. By 1950, sales expanded to the U.K., the company opened manufacturing facilities in Brazil, India, and across Europe. The Gilbarco name was registered in the 1930s, it wasn't until 1966 that the Gilbert & Barker Manufacturing Company officially became Gilbarco.
The next 50 years saw the rapid development of technology that continually changed the face of fueling, driven largely by a series of acquisitions, mergers, and partnerships that significantly grew the Gilbarco Veeder-Root family and capabilities.
Thank you, and good afternoon, everyone. That was a very flattering description that Jim gave of me, but I have to say that the only word I've ever heard from him before my performance reviews was crime. We really are delighted on behalf of the entire GVR team to welcome you to our facility in Greensboro over here. We're also delighted to have the opportunity to showcase the progress we've made since the last investor visit over here in 2004. What you'll hear from us today and where we're going to focus is how we've strategically built this platform out over the last 13+ years since we acquired Gilbarco in 2002. We've really built just much more than a dispenser business over here through a mix of strategic acquisition and a focus on organic growth.
We are significantly more than a dispenser company, as I said, really having transformed the business into a systems and solution provider. You'll certainly hear a lot about EMV, and rightfully so, you hear a lot about EMV. It's a big opportunity. I think, and I'm confident that you'll actually leave here today with an understanding that this is much more than an EMV opportunity and is a sustainable growth model well beyond the end of EMV. We win in a number of ways, but I think mostly we win through an unparalleled product portfolio and a tremendous install base that we've got and are continuing to develop around the world.
We'll talk a little bit that EMV actually helps us build out that install base and puts that install base in a better technology position that enables us to really leverage it and continue growing through the future. Just a quick view at the overall market that we operate in and our position in that market. As Jim said, we're talking about our Transportation Technologies platform, comprises the Gilbarco Veeder-Root businesses, largely a petroleum vertical-focused business. The Teletrac Navman businesses, the telematics businesses that we acquired in the last couple of years. We operate in approximately a $7 billion served market. We're about $1.6 billion of that. Operating margins north of 15%, definitely with room for improvement. I would think about the geographic mix as traditionally being more of a 50/50 geographic mix. It's quite skewed at the moment due to the strength of the North American market.
This is a very strong, high-growth market with great presence in all of the good growth markets around the world, and a lot of opportunities still over there. Looking at those growth drivers, I'd really want to highlight two of those. Firstly, regulations. I have to say, we love regulations in this business. Those regulations are both on the environmental side, with Water Quality and air quality issues affecting the petroleum market, payment security regulations affecting our indoor C-store point-of-sale business and our pay-at-pump business out on the fuel islands. It also even affects in a significant way, the telematics businesses, with increasing set of regulations around the world governing driver safety, hours of service for drivers, and recording and monitoring those safety regulations.
The other point on the drivers that I would draw your attention to is the build-out, and this is around the world, a build-out of larger retail networks. Although we'll talk about some of the work we do in the U.S. market still has a large number of single-site operators, the trend is for fuel networks to get bigger and bigger. That size adds complexity. The complexity adds a need for more control and automation. One of the themes you'll hear from me as I go through this presentation is how that complexity and the automation adds long-term growth drivers to this business that we're capitalizing on well today and will continue capitalizing on well into the future. 2015 was an outstanding year for the business. Just an outstanding year for us. We had a really strong growth, mid-single-digit growth for the business.
That mid-single-digit growth came from a lot of the geographies. It was fairly well-spread. It came from also a very strong core dispenser business, where we had approaching high-single-digit growth around our core dispenser business. One of the things I think we're most pleased with is that next point around our point-of-sale business. This is the point-of-sale system that resides inside the convenience store and controls the customer transaction for us. Over the last 3 years, we've grown this product line on a compound annual basis of over 20% every year. As I said, the reason why this is so important to us will become apparent through the rest of my presentation. Operating margins increased over 100 basis points. We did this while increasing our investment significantly to ramp up for EMV and some other growth opportunities.
On the telematics businesses, we undertook a significant restructuring between Navman and Teletrac, bringing those 2 businesses together and really creating a good strong platform for us to go forward. A good strong platform both from a cost and a technology position as we brought the worldwide business onto a single global platform. Lastly, we completed 2 bolt-on acquisitions, one for the petrol business coincidentally, and one for the telematics business. Both of these are, I would think of them as technology acquisitions. They will enhance our portfolio in both of those areas over a number of years. Finally, 2016 is actually off to a great start. We're continuing the progress from what we saw in 2015. When investors last in Greensboro in 2004, I'd like to think that it's a very different world.
Although this factory fundamentally looked the same, a lot has changed in that time period. Back in 2004, the business was growing at market. We were really a basic box business, building and shipping boxes. It was largely a developed market-focused business. The operating margins at Gilbarco were in the low double digits. Fast-forward to today, we're a 6% CAGR growth business, which we think is roughly 2 times market growth. The business has evolved significantly past the box shipping type business model into a service systems business, as well as into adjacencies like fleet management of the telematics businesses. Our high growth market business over this time period has grown it to over 20% on a compound basis. The operating margins of the Gilbarco business have expanded by over 500 basis points in this time period.
As I said, this is both an organic and an inorganic growth model that's led us to the success. Down at the bottom of the page, though, I started mapping out for you what that inorganic strategy looked like. We started off with the Veeder-Root business. We acquired the Gilbarco business, and then we took two streams, if you like, of acquisitions. Two streams, two directions of acquisitions and how we thought about it. Firstly, we looked at how do we enhance the core business. You'll see a number of acquisitions over there where we went into areas like adding hanging hardware onto our dispensers or adding submersible turbine pumps for the underground storage tanks to push the fuel up from there to our dispensers. We also added significant high growth market geographic expansion where that made sense for us.
The other vector for us was really how we looked at the breaking out our business, how we looked at breaking down the barriers just of within the retail petroleum vertical. We made a number of expansion areas over there. Examples of that would be expansion into the natural gas fueling market or indeed the Telematics businesses where we were really focused on an adjacency and we said, "What happens to the south of the nozzle on a gas pump?" That led us to trucks, drivers, vehicle efficiencies, driver efficiencies. The business itself has evolved greatly since 2004, and I think we've moved on and our evolution has moved on from a fueling platform to truly being a smart transportation platform. I'm now going to focus a little bit on that transformation, on how we've actually achieved this.
This focus on the next couple of slides will be more on the retail fueling business than it is on the Telematics businesses. We have for a number of years had this focus on our payment and point-of-sale businesses. We like these businesses a lot. I'm going to continue talking about why we like those a lot, hopefully I won't bore you. We like those businesses a lot. Higher margin profiles, technology drivers creating more rapid upgrade cycles, much greater stickiness, et cetera. We've had this very good focus on those businesses. Secondly, we've looked, this is a little bit more recent in our time, at operational services.
These are cloud-based services that we're able to drive value for our customers and revenue for ourselves on top of connecting these cloud services to a large installed base of equipment that we have around the world and delivering value to our customers. A lot of drivers across both of those areas, some of the impact that this has had on our business when we spoke about the changing growth profile since we last shared, and also the changing margin profile, is due to our focus in these two areas. You can see from the charts on the right, if you look at the profile of 2002 to 2008, a lot of revenue volatility that actually led to our growth being substantially flat over that period of time.
As our strategic change of direction started taking effect in the latter years since we last shared, you'll see low to mid-single digit growth with substantially less volatility as these strategies took hold. As I said, I think that we're uniquely positioned to win. How we view the world and why we in no way are implying that the dispensing business is not key and important to our business today and our future going forward, our strategic focus is really on what we call the automation systems. If you look at that area inside the blue box on the right-hand side of this page, the automation systems are the systems that control all the transactions at the station. All the other intelligent devices connect to those devices.
By obtaining a strong position in those automation systems, we're able to drive those type of results I was talking about that we've achieved through the North America business. We're also able to pull through a lot of the other equipment as illustrated on the boundaries around those blue circles. From a strategic perspective, this is really important to us and it is equally applicable in both the mature markets as a strategy and the high-growth markets, although for some slightly different reasons. In the high-growth markets on the left-hand side over there, you will see a tremendous amount of white space. Stations that just simply don't have automation systems. There are a lot of reasons why they're driving towards automation systems and installing automation systems, including the increased control that I was talking about, but also the adoption of debit and credit card and mobile payments.
We've already demonstrated our ability to successfully execute this strategy in high-growth markets. We're expanding our business quite successfully in these areas in markets like the Middle East and Latin America. On the right-hand side over here on the developed markets is obviously not the same degree of white space for automation systems and control systems. Obviously well penetrated. There is a major transformation going on as the market transitions or a large portion of the market transitions from primary gas-focused small format C-stores to large format C-stores, often with food services and prepared food. These require significantly enhanced systems and a tremendous upgrade opportunity. We believe that our portfolio positions us well through the coming years and well beyond 2020 to continue driving this as a sustainable long-term growth vector for the Gilbarco Veeder-Root businesses.
I'm now going to just retrospectively look a little bit again at how we built out the platform. You saw a similar slide. Jim showed a similar slide to this when he was talking about Fluke. Back in 2002, we owned the Veeder-Root business. We somewhat opportunistically acquired Gilbarco. Then we set out on this very deliberate path to build out the platform and really transform the platform as I've already described. Overall, we deployed over $1 billion of capital on 19 acquisitions since 2002, and this has significantly enhanced the growth profile, the profitability profile, and also moved us into some important adjacent markets. In contrast to what Jim did show on the Fluke illustration similar to this, is that you'll see we actually probably accelerated acquisitions as Fluke was slowing down acquisitions. We were fortunate enough to continue attracting the capital over here.
I think you can see the overall benefit that us being able to do that has had on our business, obviously something we expect now that across the rest of the Fortive portfolio, we will be able to continue doing this. Making the acquisitions is only one part of the story. The other part is really being able to extract value from the acquisitions you made. I think again, we have been able to do this quite successfully and we have got a good example over here of what we achieved with an acquisition we made in India just over four years ago. We bought a dispensing company, a pump and dispensing company from Larsen & Toubro, a large diversified industrial in India. It was a loss-making business at the time we bought it, principally focused on the domestic India market.
Just as an important piece of background over here, the domestic India market is the most price competitive market we have by a large factor anywhere in the world. We were able to take that business and through the deployment and continuous deployment of DBS tools over this four-year period, we have really been able to transform that business. You will see some of the results down the right-hand side over there. We have grown the revenue over 2x, improved customer service and on-time delivery, tremendous improvement in quality from the business. Most of all, we have been able to improve the operating margins from that business by over 1,500 basis points. Just a tremendous accomplishment in that most cost-competitive market in the world. That business we have in India today is now also a center for supplying components to other Gilbarco factories around the world.
It is also a center for us building and exporting low-cost dispensers. That capability we acquired in India is serving us well as we look to grow the business through other high-growth markets around the world. I think a tremendous accomplishment from that. One of the other important byproducts of this, we have got a workforce over there that is as strong a set of zealots around DBS and, in the future, FBS as we have anywhere else in the world. Tremendous capability that we built there. Just putting together the financial evolution now of the platform. Some of you may have seen this slide before, but I think we started off just north of a $400 million business back in 2002, and we have grown that to over a $1.6 billion business today.
Transformation of the operating margins, we have done that through this mix of acquisition, inorganic growth, and organic growth, as you can see highlighted on the page over there. One last point to make on this is that I think we have really built a playbook on how to do this, and we have built capability on how to do this. I believe this is going to serve us well, not just in the Transportation Technologies platform, but I think we are going to be able to take this and apply this across the other four businesses. In summary, we have achieved a real technology leadership position. We have a uniquely strong and unparalleled portfolio of products in this industry. We have a large installed base, and we are able to capitalize on that large installed base. EMV is going to provide us a significant growth opportunity over the next several years.
It's also going to position us for future growth and ongoing growth. As Jim said, this is much more than just an EMV story. We have a long runway for growth in this business. We are transforming it, we'll continue to evolve it as moving into more of the transportation segment, and we're very pleased with where we are. Thank you very much for your time on that. I'd now like to move on and get into some of the more specific presentations over here. Firstly, Steve Moule. Steve is the president of our North America business. He's been with Gilbarco Veeder-Root since 2007. He started off in working for us in the U.K., expanded his role looking after Europe, then in Europe and a number of the high-growth markets.
We eventually imported, actually imported him from Australia into the U.S. about two years ago to really help us make sure we maximize this EMV opportunity, and Steve's just done an outstanding job on doing that. Thanks.
Thanks, Martin. Good afternoon. I'm very pleased to have the chance to present this afternoon on the opportunity that we're seeing across the United States relating to the upgrading of payment devices to accept the chip that's within our credit and debit cards, commonly known as this EMV opportunity that Jim and Martin have referred to. For our C-store retailers within our petroleum industry, this really means that they've got to upgrade their payment device inside the store, outside of the dispenser, as well as upgrading their point of sale. In terms of maybe just some clarification, EMV is an acronym for the card brands, Europay, Mastercard, and Visa, who devised the initial security regulations that are being used to combat the card fraud, the significant card fraud that's occurring annually in the United States every year.
In terms of my presentation, I'd like to give an overview of how we're seeing the EMV opportunity, the underlying value that we're seeing from it, and also the drivers that have led to the introduction of the EMV regulation in the United States. We'd also like to talk a little bit about the dates, the important liability dates when the card brands transfer the liability of the card fraud back to the retailers who own the gas stations.
Also give an update on how the industry is progressing in terms of actually updating and upgrading the payment devices, and also how our customers are viewing this investment envelope as an opportunity to not just put in place EMV software and hardware, but also take a chance to actually acquire new payment and merchandising technologies to help them not only run their sites more profitably, but also drive some greater consumer loyalty. Finally, I'd like to use a case study of a new customer in Las Vegas that we have been working with to upgrade their network to meet EMV. Really to illustrate the strength of our range of products and solutions, and how the EMV opportunity gives us a chance to not only to win some very strong upfront revenues, but also create a longer-term recurring revenue base once the initial EMV upgrade cycle has passed.
Talk a little bit about what we're seeing with EMV today. A lot of our customers have started programs to upgrade their indoor and outdoor payment devices and also their point of sale. The card brands don't actually mandate that a site has to actually take EMV transactions. If there's any fraud at a site post the liability shift date and that site has not updated its hardware, that cost of that fraud will be transferred from the card brand back to the retailer, and we're already starting to see some significant amounts of chargebacks going back to our customers from the card brands. I guess in terms of the way we look at the increasing in data security, a proliferation of skimming devices that we've seen at dispensers actually leads to a lot more enhanced understanding of consumers for the need for enhanced payment security.
That consumer understanding of the need to have secure payment transactions is really leading and driving our retailers to upgrade towards EMV. Upgrading towards EMV for a large industry like the petroleum C-store industry represents a significant investment, not only to protect consumers, but also for the retailers to protect themselves from the significant chargebacks that are liable to them if they don't upgrade their networks. Thinking about EMV, there's really kind of two important dates. First date is the upgrading of the indoor Payment device and the point of sale. That date was actually set as October 2015. Now, while that date has already significantly passed, actually, we believe only about 5% of the sites within the U.S. are actually taking EMV transactions today, primarily down to the complications of being able to certify a point of sale to take EMV transactions.
The second date of importance is to upgrade the payment device outside the dispenser, and that's upgrading the software and the payment device. That's October 2017. We're already starting to see a significant number of customers start to upgrade the program, but we believe that that upgrade will take significantly years past the 2017 liability date. When we look at EMV, you can see here on the slides, we see it as a significant growth driver for our industry. About a cumulative $500 million opportunity, and we think that that kind of translates into around about 85% of the current installed base of dispensers having to be either upgraded with brand-new certified EMV dispensers or retrofit payment devices. Maybe I'd spend a little bit of time just talking about indoor and the upgrade progress with indoor.
Primarily because that date was October 2015, has obviously already passed, from what we can see, around about 50% of the sites have the hardware in place to take EMV transactions, but only about 5% are actually taking transactions. You see that as you go to a gas station today, you're still swiping, you're not dipping that card. At Gilbarco, we were the first actual point-of-sale provider to be able to release our EMV certified software. Our point-of-sale customers today are installing our software and being able to take EMV transactions. They're no longer incurring chargebacks. In terms of our competitors, they're obviously still working through that process, but we are certainly first to market and pleased to be so.
In terms of Gilbarco, we're actually unique in that we're able to provide a combined solution of EMV certified point-of-sale and also an EMV certified dispenser. Getting a site to EMV, particularly if you've got a large network of gas stations, is extremely costly and also very complex. What resonates with our customers is the Gilbarco ability to be able to provide an upfront point-of-sale and a dispenser, one certification, and it really eases the road for our customers to be able to get towards EMV. In terms of looking at the way that we continue to drive growth, DBS has been tremendously impactful for that.
The rigorous application of DBS from a growth and an engineering perspective has enabled us to not only be first to market with our point-of-sale, but it's also helped us position ourselves to be able to find opportunities, convert leads, and drive share. We invested heavily, and you'll see later today, we've invested heavily in transformative marketing, built out our inside sales capability to be able to pass good quality leads to our sales team and also to our distributors. This inside sales capability, you'll see, helped us so far this year generate about $17 million of new business in the really hard-to-reach single site owner segment that makes up about 60% of the U.S. market.
A bit later on the tour today, we'll also take you to our EMV war room, where you'll be able to see somewhere that we go every day as a team to look at our actions, put in place countermeasures to make sure that we continue to remain on track to deliver EMV for our customers. Turning a little bit here to the outdoor payment. Now, we were pleased last month to be able to release, which you can see on the screen, is our latest secure outdoor payment device. This was the first of our products that we launched with our partnership with Verifone. It really brings to market leading security that our retailers can then buy and then ensure that their consumers, that they are getting real EMV security.
The product was released with a full series of merchandising and media options, as well as full retrofit kits. A customer can buy this upgrade legacy Gilbarco dispensers, but also competitive units as well. The advantage, again, for our customers is they can take this one payment device and install that across their entire network, thereby simplifying the certification process irrespective of whose dispenser they actually have on their forecourt. We're seeing at the moment a lot of customers start to have their upgrade programs. Actually, we've been successful at securing a lot of exclusive rollout deals with the largest retailers in the U.S. You can see some of the brands that are listed there, where we've already started to have exclusive agreements to roll out.
In terms of the broader market, although the upgrade date is October 2017, we actually expect it's going to roll out for many years past that, just given the experience with indoor and also the sheer number of sites that are going to have to be upgraded. Thinking about it from a retailer's perspective, to get a large station network upgrade for EMV is a tremendous investment. We're seeing our customers not only buy a payment device, but also a lot of additional features around that. Those features that help them give them longer term flexibility to either be able to improve the profitability of their site or drive greater consumer loyalty. Things like mobile payment, media at the pump, things that can also help from their perspective, improve that fueling experience, and also drive some greater consumer loyalty.
One part of EMV, although it provides for us some good upfront revenue streams, there's a requirement for every site to put in high-speed communications. That high-speed communications is needed to take an EMV transaction. It also opens up the ability for us to provide a whole array of additional software services for our customers to be able to access. That provides long-term recurring revenue streams for Gilbarco and enables our customers to be able to operate their sites more profitably. Those services typically are billed monthly on a long-term contract basis and can include things like remote maintenance or our SaaS-based predictive upsell technologies or media at the pump, right through to even just standard site support systems and upgrades.
In terms of Gilbarco, when we look at EMV, the increase in store base that we've got through gaining share, this provides the opportunity not just for upfront revenues, but also for us to build a long-term recurring revenue base off this increase in store base by giving our customers additional software services and solutions that they can use to run their stores more profitably through and after the EMV upgrade cycle. Just want to turn quickly to a case study of a customer in Las Vegas who's been working with us to upgrade their network towards EMV. Terrible Herbst is a pretty progressive retailer, in Las Vegas. It's got about 100 sites. They've not been a traditional Gilbarco customer.
They worked with us and our team through a complex sale process to hand to us their point-of-sale business, the first time we'd ever secured a point-of-sale business with them. This provided for us the ability to be able to provide tremendous share gain. Terrible Herbst was looking for a partner who could not just get them to EMV, but somebody who could also help them simplify the process and also provide some sort of upsell technology that would enable them, when customers come into the store, to be able to find other opportunities to be able to sell additional items and increase in average basket size inside the C-store. Terrible Herbst represented for us a great opportunity for not just upfront revenues, but also to build a longer-term recurring base and take share.
When we look at Terrible Herbst, winning that point-of-sale business, I think as Martin mentioned, provides tremendous pull-through for us. Whilst we roll out the initial point of sale, and they also signed a long-term agreement to use our SaaS-based impulse upsell technologies, we also expect to be able to sell additional software services and upgrade their dispensers with Gilbarco equipment as they go through the EMV process. The interesting thing about this case study is not only will it represent share gain for us and opportunity for us to win our point of sale, but it also enabled us to be able to start to build a recurring revenue stream through additional services that we already have, such that the upfront revenue represents about half of what we think the total value of this deal will be.
Post EMV, we actually believe that about 50% of it will then occur once we've already done the initial EMV upgrades. In summary, for Gilbarco, we've been able to differentiate ourselves from being simplifying, helping our customers simplify the road to EMV. Our broad range of products and services have resonated, and we've been able to take significant share. We need to take that significant share and increase in store base and really build out our long-term recurring software-based businesses that will help us, post the EMV opportunity, continue to grow. Thank you.
Thanks, Steve. Great job. Thanks, Steve. Great job. I think Steve gave us a pretty clear picture of how we're going to win through the EMV cycle. I'd like to just emphasize where he was wrapping his presentation up, which is how EMV is going to help us win after the cycle as well. Think about EMV as having been, or our success in EMV, as having been built on top of our large install base. The reason we're going to be so successful, there are a lot of other reasons, but the fundamental reason is that we're going to upgrade our existing install base. The install base we're going to have at the end of the EMV period is going to be a significantly better install base. I'll give you just a couple of thoughts on here.
Today, this is a largely unconnected, not smart industry in terms of connectivity to your devices. At the end of EMV, every single dispenser we have out there is going to be IP addressable, capable of us interrogating it remotely and downloading software. Just as one example. Many opportunities are going to be created for us through the EMV cycle. With that lead in, I'd like to introduce Andrea Mulhall. Andrea is the Vice President and General Manager of our Insite360 business, part of our Veeder-Root business. Andrea's going to come along and explain what we're doing, just a little bit of Veeder-Root overview, and then what we're doing with our Insite360 business.
She's been with us, with Danaher, in a number of roles in a number of different Danaher companies for over 10 years, and just a great leader in helping us grow this new part of our business.
Thank you. Thank you, Martin. Good afternoon, everyone. I'm thrilled to be here today to talk about Veeder-Root and Insite360. This is really a story about how Veeder-Root, a leading supplier in the petroleum equipment industry in software and services, wants to continue to deliver incremental value, tangible value to our customers. Traditionally, we've been known to supply compliance equipment to our customers. Our desire is to provide our customers increased business tools to allow them to more effectively run and manage their fueling operations. Therefore, we created Insite360, which you'll hear me talk about today. It's our service solution that provides our operators more visibility and control over their entire fueling network. To help tell the story today, I'll go through a brief overview of Veeder-Root and Insite360.
We'll talk about a story where we've delivered tangible value to a very strategic customer of ours. Finally, we'll talk about the future vision of Insite360 for Gilbarco Veeder-Root. Who is Veeder-Root and what do we do? Well, Veeder-Root is the foundation of Danaher's petroleum vertical. We are the standard in the industry, often sought after to create products and solutions that meet regulatory drivers in environmental and air quality regulations. As such, we enjoy significant penetration and significant market share as we develop those solutions. We also have a wonderful growth trajectory as those regulatory drivers continue to expand both domestically and internationally. What do we do? Many of you have probably been to or seen a gas station. Well, Veeder-Root makes most of the equipment that you don't see on a gas station.
Starting underground in the underground storage tank, we make the pumps that pump the fuel out of the tank. We make the sensors and the probes that tell our operators whether there's a leak on the site and tell them how much inventory that they have in their tank. Going above ground, we make vapor monitoring equipment and vapor recovery equipment, which is very critical to maintaining air quality across the globe and becomes ever increasingly important as air quality regulations continue to expand globally. Traditionally, this equipment has provided exceptional value to our customers in looking at their compliance in a single site. However, our customers have not had an efficient way to look across their network and gain actionable insights as to what is happening across the network. Therefore, we created Insite360.
We've leveraged our extensive installation base and our leading share position to connect all of this equipment and extract these data streams and put them into a cloud-based application. Therefore, we can translate those data streams into meaningful insights to our customers that enable them to better manage their business. In turn, we're able to sell this as a software subscription solution, SaaS-based model. Let's take a little closer look at what Insite360 is and what it does for our customers. As I mentioned, Insite360 is our service solution. It really enables our customers to better see, control, and manage their entire network of sites. It also enables them to take the right action at the right time at the right location in their sites so they can more effectively manage their fueling operations, ultimately saving them time and money.
In turn, for us, this is a double-digit growth opportunity as we look at increasing and capitalizing on our extensive market base and the networks that are ever increasing. We provide our customers a fully scalable solution, starting with a basic do-it-yourself solution for customers that want to take action themselves, and scaling all the way up to a fully managed solution for customers that want us to do the service for them. This enables us to get customers on a service and upsell them over time to increase advanced services, thus generating that recurring revenue stream and that double-digit growth. Finally, Veeder-Root is uniquely positioned to do this better than anybody else. We can provide the equipment, the services, and the financing in a complete package for our customers to deliver a single solution that meets their needs. We are doing this across nearly 40,000 sites today.
This is real. This is live. This is happening. We're providing this value to our customers. We talked about tangible value. This is a customer story that we're really proud of. For those of you with military connections, you've probably heard of a company called The Exchange. The Exchange's mission is to provide goods and services to our military and its families to make their lives more comfortable, both domestically and abroad. As such, The Exchange's desire is to effectively manage their fueling operations so that they can keep our military families supplied with fuel and offer that fuel at a very competitive price. To do so, The Exchange has partnered with Gilbarco Veeder-Root and has taken on the entire suite of Insite360 services to help them better manage their fueling operations. How do we do this?
We help them make sure that they can buy fuel at the best price. We help make sure that they don't run out of fuel. We help them understand where every drop of fuel is going in their network and that they're not losing any. Finally, we help make sure that they receive every drop of fuel that they bought, and they paid the right price for it. What does this mean from a tangible value perspective? On our services in the past year alone, we have saved The Exchange over $17 million in cost savings on comparable gallons on their fuel purchases. We've also, through our fuel logistics services, helped them manage through one of the most recent significant natural disasters of our time, Superstorm Sandy.
If you could rewind a couple of years with me, if you can imagine Superstorm Sandy wreaking havoc on the East Coast. You can imagine during that time how difficult it must have been to get fuel to gas stations in that area. In fact, it was so difficult that sites that were not under our service only had fuel 20% of the time that they were in operation. Conversely, The Exchange, that subscribed to our fuel logistics services, was able to keep their 250 sites in fuel and running 98% of the time. This meant that we were able to supply a continuous supply of fuel to the U.S. military and its families. Obviously, The Exchange is very proud of this accomplishment, and we are very proud of this accomplishment.
This is only one example of the many ways that we are delivering this tangible value to our customers every single day with Veeder-Root equipment and Insite360. What's the future of Insite360? Where are we going? What's the vision? We talked today about the retail fueling side of Insite360. On that side alone, we still see tremendous upside opportunity. As Martin talked about the retail network expansion, we see tremendous growth opportunity as we continue to layer Insite360 onto our vast installation base and grow it in both mature markets and high-growth markets. The Gilbarco Veeder-Root vision for Insite360 is much bigger than the fueling side. Our vision is to connect all of the equipment on the site to provide true site automation, as Martin mentioned.
In being able to leverage our installation base, our leading market share position, and our footprint on these sites, Gilbarco Veeder is uniquely positioned to be the only complete site automation supplier in the industry. We see tremendous runway with IoT in retail fueling applications, we know that as we can open up and extract those data streams, we can therefore open up and extract additional recurring revenue streams in this business as we connect this equipment. In conclusion, Veeder-Root will continue to leverage our vast installation base, connect all of these sites to generate double-digit growth and recurring revenue streams. We will continue to expand our service offering to deliver cost-competitive solutions that bring tangible value to our customers by combining our services, equipment, and financing in complete solution packages.
leveraging Insite360 with Gilbarco Veeder-Root's footprint on the station, market share position, and installation base, we will be the only site automation supplier in the industry able to deliver this value to our customers. Thank you.
Thanks, Andrea. Another great example of a growth opportunity, but also another great example in common with Steve's presentation of this growth flywheel. Create a large, valuable installed base and grow on top of that large, valuable installed base and keep doing that over and over and in different parts of the world. We're going to change tack a little bit, and I'm going to ask Renaat Ver Eecke to join us or to come and do a presentation on the telematics businesses, Teletrac Navman. Renaat joined Danaher relatively recently when we acquired the telematics businesses or the Navman business in 2013, and I think he's a great example of another benefit that we've got over the years from acquisitions, which is great people joining Danaher and growing their careers and helping us grow our businesses. Thanks, Renaat.
Thank you, Martin. I'm excited to talk about Teletrac Navman. Today, I wanted to go through a little bit of a telematics overview for those of you who don't know about telematics, give an update on the integration, talk a little bit about how we're driving technology into the workflow of our customers, and what that means in translating to new markets and how we think about verticals. Finally, I want to talk about a live example with Domino's in Australia, how we actually did this and what that looked like. Telematics, we've heard the word probably 1,000 times, but I thought I would describe in more detail what it means to us. We provide a black box that really has two components.
One is a GPS chip, which gives you location information, and the second is a cellular chip like you find on all the cell phones you all have here. We take that and put that into a vehicle, and what that does is that transmits the data every one to 15 minutes of a vehicle over either AT&T or Verizon here in the U.S. and goes into our servers. What we actually sell is the software behind that. All of that gets aggregated. Our customers log in, and they have new visibility into their fleets. What they typically do is drive down the cost of fuel, they drive productivity, or they drive compliance more recently, or the combination of those three.
For us, from a Danaher and Fortive perspective, the benefit is really a SaaS business that has extremely attractive gross margins in an under-penetrated market that is highly fragmented. We are about a $200 million business with high single-digit growth and great runway to expand our margins over time with FBS and DBS. A little bit of an update for those of you who do not know the history of Teletrac Navman. Danaher acquired Navman Wireless at the end of 2012, and six months later acquired Teletrac. Navman was a historical business that was mostly outside the U.S., and Teletrac was mostly inside the U.S. We let those businesses run independently for 18 months, and we brought them together at the end of 2014. Now they are fully consolidated, both from a leadership perspective, but as Jim talked about, management and product, and also back office.
One of the things that created is a top five player here, which we think as we look forward, allows us to leverage great opportunities in the U.S. and around the world. As we think about that and we look going forward, here is one of the things we have really thought about recently and one of the changes we see. Historically, our business and our industry has been in the middle of a workflow, if you take a look at this diagram and think about the workflow of a customer. We were all about execution and visibility. However, as we broadened our horizon and started thinking about what we could do in the future, looking at our customers' workflow and taking the real-time data.
A lot of these things in our industries have been existing for a while, but they have had a missing component of understanding what is happening real time with their vehicles, and we can provide that now. Let me give a real example of what that looks like. In transportation, there is lots of software packages around routing. They take multiple delivery points, use mathematics, and spit out a route that is optimal. Historically, it has been really difficult for fleet managers to understand what happened once the route was planned. What we can do is take the live data that I talked about and feed that into routing packages, and then all of a sudden, there is a new possibility to see the route, the plan, and the deviations from those plans. Great opportunity to drive improvement into our customer base.
For us, it is a great opportunity to increase revenue into our subscription base and create stickiness by having uniqueness for our customers. There is also an enhanced amount of compliance going around in transportation, whether that is hours of service here or in Australia or in our European business. If we take that concept of workflow and drive it into verticals, we feel like we can create some unique software opportunities and some unique elements that we can drive into some verticals I will talk about today. One of those is private fleet, and the second one is construction. In private fleet, I just talked about routing on the left side of the workflow. On the right side, there is a lot about safety, whether that is compliance or cameras being put into trucks.
We can trigger moments to go tie the live data of camera information into events that we know are happening into the vehicle and create new insights. In construction, which is a market we've been really in for some time and have had very consistent growth in, it's a market also that has a lot of problems knowing what's happening on job sites. We take that same black box, ruggedize it, stick it into yellow iron, and allow it to transmit data real-time back to job costing systems that plan projects. Now all of a sudden, what historically in that market took a month to understand if a job was running over or under, we can do virtually in real-time for our customers. I always like to think about a real-life example. One of the great examples here is with Domino's.
I want to stress that one of the great things here is this is just one example of taking our technology platform and extending it. We can do this over and over again across multiple industries, multiple verticals, and multiple segments. Domino's came to us. For those of you who've ever ordered a pizza from Domino's, you know that they have a pizza app, and this is in Australia. You can take an order, and you can see it actually being created right there in the store and right to the end of the door when it leaves. They came to us with a challenge in saying, "We want to extend that.
We want to create a new opportunity where we can bring the experience all the way to the door of our customers." They gave us 60 days, which even in our rapid software development cycle, is a pretty short time. This is where we're able to leverage some of the DBS tools, even as a new opco, and take that in and understand rapid development cycle times and apply it to this. The net output was 6,500 vehicles that we won. We deployed into Australia and New Zealand very quickly. For Domino's, it was an incredible benefit, not just on their operational efficiency, but all of a sudden, they had something to market to their customers, a new customer experience, and they saw tremendous top-line growth, same store. This is a great story about what we can do.
In conclusion, I think this is a great platform for us, right? Not just its growth, but obviously, this is a great place in which we can deploy the Danaher Business Systems, right, and opportunities. Not just by DBS, by getting leaner and getting more efficient, but certainly, I haven't talked about it yet today, on the left and right side of those workflows in those verticals, awesome opportunities to do inorganic additions. As I leave today, just wanted to say thank you, and what I've got here is a small video of Domino's and how they extended into the customer's house and how we enabled doing that. Thank you.
What do we do?
Usually drink, usually dance, usually fuck.
All I want to do is tell you I love you.
That's when I start romancing the world to a brand new girl, I don't even know yet. Next thing she's wearing my Rolex.
What do we do?
Usually drink, usually dance, usually fuck.
All I want to do is tell you I love you. All I want to do is tell you I love you.
That's when I start romancing the world to a brand new girl, I don't even know yet. Next thing she's wearing my Rolex. My shelf got lit like a police. Here's my number, she already knows it. This club is locked, better close it. Just looking around for some heat. Wild as a party guy and she knows it. Usually drink, usually dance, usually fuck. That's when I start romancing the world to a brand new girl, I don't even know yet. Next thing she's wearing my Rolex.
What do we do?
Usually drink, usually dance, usually fuck.
Pump it out, guys.
Is tell you I love you.
That's when I start romancing the world to a brand new girl, I don't even know yet. Next thing she's wearing my Rolex.
What do we do? What do we do? All I want to do is tell you I love you.
Video, the normal reaction from people is to end up really, really wanting a pizza, but I'm not sure if that's the case after that barbecue lunch. Fantastic business, organic and inorganic growth opportunities. The other benefit that might not have been as apparent from that presentation is that it gives us a base of expertise as we look to grow our software and SaaS businesses. Base of expertise in technology, service delivery, and also importantly, commercial execution expertise. I'd now like to move on and introduce Rob Tykal. Rob is the VP of Global Operations for Gilbarco Veeder-Root. He's got a long career at Danaher, a number of different businesses. He was president at our Jacobs Vehicle Systems business before coming to Gilbarco. We're very pleased to have him over here as he helps us really drive and improve the efficiencies on QDC for our businesses. Thanks, Rob.
Thank you, Martin. Who knew you were going to get to visit an Australian nightclub tonight? As Martin said, I'm very fortunate to lead a group of individuals, some of which are in the room today, that collectively run our global operations here at Gilbarco and Veeder-Root. I know you've been sitting for a while. I have just 10 minutes, a little bit of time pressure, I reminded myself that if anybody should be able to deliver a quality product on time with high efficiency, it better be the guy talking about DBS. Today, I really am excited to illustrate just a few ways in which DBS is driving superior results across the business portfolio. Everyone, beginning with Jim, has referenced our FBS DBS culture.
In my presentation, I hope to reinforce just how we're using that in all functional areas of the business and point out some of the results that we've realized across those different areas. Whether it be in the traditional area of operations, where, of course, the lean tools continue to drive productivity and improvement in quality and delivery. In our commercial teams, where our growth tools allow us to reach new market segments through better visibility and customer insights. Or in our engineering and product development areas where we use the DBS tools to shorten the development cycles while delivering offerings with improving quality, reliability, and durability. DBS continues to evolve. I think that's really important. In my 10 years with Danaher, I've witnessed this firsthand, with new tools and best practices being shared across the businesses and across the portfolio.
Segmented into the categories of lean, leadership, and growth, as Jim alluded to, here are just a few of the results we've delivered recently. Consistent core growth in the mid-single digits over the past three years, better than 300 basis points of margin expansion, and improved cash flow, as evidenced by the 20% improvement in our working capital turns. Additionally, from a customer perspective, in 2015, we saw a 250 basis point improvement in our on-time delivery performance in Gilbarco. We also saw a 45% improvement in quality for our flagship fuel dispenser, Encore, which you're going to see during the product tour this afternoon. On the growth side, $15 million of incremental revenue from tools associated with our transformative marketing efforts that Steve talked about and a 3x velocity gain in some of our product development timelines.
A real specific example, Martin talked about the acquisition in India, and the fact that we now get a lot of the standard components, taking advantage of that low-cost region. Our meter cell in India last year alone improved their labor productivity by 25%. Here's a specific example from operations, one that you're going to see out during the tour in a few minutes. The strong dispenser growth we're seeing as a result of share gain and the EMV opportunity forced us to look at how we could leverage the DBS tools to increase our capacity without the need for extensive capital. We're looking at some substantial volume increases, and we wanted to see how we could leverage the existing assets. Lean DBS tools, including the production preparation process, we refer to that here as 3P. Lean conversion, standard work, visual management, and Kaizen have all driven some substantial benefit.
In addition to obtaining the 50% capacity increase that we were looking for here in this factory, with these tools, we were able to also see improvements in labor productivity by 500 basis points already realized this year, and we've increased our first pass yield through the production process. Just as importantly, we've improved the working ergonomics for our associates on the line. Helps with engagement and helps with fatigue. More broadly, the application of these DBS tools across the portfolio have resulted in better on-time delivery. You can see 200 basis points there. Solid margin expansion, due in part to some of the DBS tools that are designed around our supply chain management and our direct material cost reduction. In the next couple of examples, I want to focus where we're using DBS in non-manufacturing areas, how we're driving growth.
In our commercial teams, tools such as transformative marketing, digital marketing, VOC, sales funnel management, et cetera, are driving top-line growth while improving the efficiency of our processes as well. Better market visibility and some insightful segmentation of our served markets allows us for more specifically targeted and differentiated value-selling efforts. Monthly revenue attributed to these tools alone has increased five times since January of last year. We're on a trajectory based on our Q1 results to triple that again in 2016. Note also the significant improvement in the efficiency these efforts have in converting our leads into orders. You'll see this in a lot more detail later on this afternoon in our digital marketing breakout session. As Steve referenced in his presentation on EMV, clearly the takeaway here is that we're effectively reaching more customers and new market segments by using these growth tools.
The last specific example I'd like to talk about is within our engineering and product development area. This is done in all of our engineering groups across all of the business in the portfolio. We're using DBS to drive organic growth here as well. Here to see an example from Veeder-Root, where DBS growth tools focused on improving our product development processes have been utilized. As part of these tools, practices such as rapid prototyping, increased use of proven technology, parts, things that are already in our parts bins, and competitive teardown analysis has really started to pay some dividends. 65% improvement in the development cycle for some of our products here, including the one that you see here, the TLS. We'll talk more about that in a moment. On-time delivery for some of our project timelines from a low of 30% to well over 80% today.
Using these tools, we launched our new automated tank gauge system, we did that with appropriately differentiated feature sets for both mature markets with our TLS 450 Plus and for the emerging markets with our TLS 4. To kind of wrap up and summarize from a DBS standpoint, as I hope we've shown, DBS, FBS shortly, touches all aspects of the business. It really is who we are and how we do what we do. It is rooted in the belief that everything has to be improved and must continually be so in order for us to continue to outperform. It continues to evolve, and I think really importantly, it's equally applicable and it's equally effective in the mature businesses within the portfolio, but also within the newer businesses that we bring in.
The DBS fundamentals are really timeless, to that extent, they ensure that we'll be able to be uniquely positioned to drive superior results over the long term.
We're really glad you guys came today and appreciate your patience and attention during the presentation. Thank you.
Thanks, Rob. I think this really highlights an area where there are a couple of questions for Jim. Even in a mature business, a mature Danaher business like Gilbarco, where we've been part of the Danaher family for some time, DBS and FBS still provide significant opportunity for margin enhancement, customer service, and other areas. All of that is still possible. Just summarizing the day for us before getting Jim up here to help with some Q&A. I think you've heard about our technology leadership position. I think you've heard about the power of our install base and how we're going to be able to leverage that through the EMV cycle and well beyond the EMV cycle. I think you've also heard about the adjacent market opportunities that we're creating, both within the retail petroleum vertical, as well as outside of that vertical.
I think also, hopefully, you've taken away the strong message about our unparalleled power of our portfolio and strength of our portfolio in this industry. Just a last view of the financial evolution of this business. I thought it was just worth one last look at it. Again, I think this is, and the reason we're putting this over here is, again, as a pointer to what the future can be and the continued runway, both in the Transportation Technology segment as well as across the other Fortive platforms and businesses. Thanks very much for that, and we'll get Jim up to help with the Q&A section.
It's probably for Martin. Obviously, a lot of what you're doing at GVR is focusing on software and connectivity, but it does come with investment. We've seen, when you look at the company overall, and we've seen it in the margins at least early this year around EMV investment. Can you talk about the payback period for what you're doing here? Talk about the barriers to entry as well. When I look at Teletrac and Navman, what I see is you're probably competing against the fleet OEMs themselves, and they're pushing that, too. Software guys can get into it. Why are you guys, why is GVR why are you ahead? Why would you say ahead?
Okay. Look, there are a number of different questions. I'm going to answer the fleet telematics question separately from the GVR questions. We've certainly invested heavily ahead of the EMV period in particular. We needed to invest in capacity expansion. We also needed to invest greatly in the product development side to prepare the product and get ahead of the market, which we succeeded in doing with the technology. The payback cycles are actually very rapid for us. I think very short cycle payback for that. We're spreading some of the load on the heavy development cycle, and what we're doing in our partnership with Verifone was an important part of that because Verifone can leverage their horizontal expertise across the payment market and bring that into our vertical. That was also an important component of what we did there.
In terms of barriers to entry, I think there are very strong barriers to entry in this market. Steve Moule spoke a lot about the certification complexity that exists around the industry. There's actually one of the reasons everybody's so late in implementing EMV is actually that certification. There's a lot of certification still ahead of almost all the manufacturers, payment networks, and customers. That in itself, leaving aside the technology challenges, creates a significant barrier to entry. On the telematics side, just not to forget that question, this is a business we like a lot. It's a business we like a lot. There is consolidation opportunities. There's opportunities to expand into the workflows. There are some opportunities to bring the Gilbarco fueling businesses together and our expertise in some specific verticals.
Mostly, we like the growth profile of the business and the opportunity to build additional vertical businesses. Thank you.
Yeah.
Got it right here in the middle.
Yeah.
Just was wondering if you could just help us with a few kind of basic building blocks. Just roughly the size of the POS business and how to think about your market share. Thinking about the market share, I'm sure I'm not coming to the right conclusion looking at this slide, if 50% of people have these systems and only 5% of them work, and you've got the only one that's certified, it sounds like you have 5% share, I don't think that's the right conclusion. What am I missing in that rough arithmetic there?
Well, I'm not sure your arithmetic's incorrect. Let me clarify the 5%, if I can. We're talking about point-of-sale systems and taking EMV transactions indoors. Actually, over 50% of the market has acquired the equipment to be able to take EMV transactions, only 5% of that 50% is currently executing EMV transactions. The rest of them are still running on magstripe technology. The install base of EMV-capable equipment in the store is over 50% at this point.
The way to think about that is when you go to, a lot of times you go indoor, you'll see the opportunity to put the EMV card in, you're still swiping it. That's really what's happening. The equipment's there, they're not using it.
Are you also saying your system is technically certified, the retailer or whatever has not done some additional step that certifies them to interact with the payment system? Is that what you're saying?
Here's where part of the complexity is. Most of the retailers have either individual payment network systems, so they're on an Exxon network or a Shell network or a First Data network. The complexity over here is the dispenser, the point-of-sale system, and the payment network have to be certified together. Our system was the first on the market with a number of certifications, but not everybody is certified yet. That's part of the complexity and those entry barriers we were talking about earlier.
Can you give us an idea of kind of size and market share?
I'll give you an idea of market share, which is actually very good, and I'll give you an idea of our install base at this point. In the U.S., we're approaching 40,000 stations with our point-of-sale business.
Steve?
Thanks. Question on both businesses again. Okay. First of all, on telematics, how do you scale up a $200 million business where you have software that's built on a platform, but very much customized customer by customer by customer by customer? How do you get scale out of that?
Okay. Well, I think firstly, despite the Domino's example, the core platform, the core functionality is not customized at all. It's standard across all of our products. In the vast majority of instances, we provide a standard suite of products with standard software. We have opportunities in specific vertical markets, and while we didn't particularly think of pizza delivery as a vertical we were going to attack, it's a good example of a market where you can tailor the software around that vertical.
Okay, secondly, on GVR, in terms of the five and 50, the 5% and the 50%, what's the natural limit in your view? Is there a reason why you wouldn't see the industry go to 100%?
We don't think it's going to reach 100% because there's always laggards. We had some payment card regulations a few years ago. The industry never got to 100%. No regulation ever gets to 100%, but we think it'll get north of 80%.
Timeframe?
The timeframe for the indoor systems, probably another couple of years. Maybe by the end of this year, we should be pretty close to that. The outdoor systems, there's actually greater complexity on the implementation outdoors than there was indoors. We think that is going to lag significantly past that 2017 deadline.
Thanks.
Okay.
Hi. We good? All right. Thanks. This is really exciting. It's like the only time I get to use my knowledge of the convenience store industry.
It's on Domino's.
Just to think of it, two questions. One, you said you had about 40,000 sites in the U.S. I think there's about 126,000 sites within the U.S. total. You're about 30% market share, 33%. There's been a lot of consolidation in the industry, although it's still highly fragmented. There's a lot of consolidation still to come. How are you positioned for some of the consolidators who may have contracts with other players? Do you need to win those contracts as they kind of eat up more market share of the overall industry, or is that something that you're on the right side to be positioned for? The second question is, one of the growth aspects for these more consolidated players is actually getting into fuel transportation. Do you have cross-sell into the fuel transportation business as well?
A number of questions there, a number of answers. Let me first answer something you didn't ask, which is that irrespective of the point-of-sale system the customer has, we still sell our Veeder-Root systems, where we have our highest market share. We still sell dispenser systems, where we have our next highest market share, and then we have our point-of-sale systems. I just want to clarify that point. Even if the customer is not a Gilbarco Veeder-Root point-of-sale customer, they're almost certainly a Veeder-Root customer. They're almost certainly a Gilbarco dispenser and payment system customer. We think we're well-placed with the consolidation across those product lines. There's obviously still room for share expansion, and we think there are going to be future opportunities after EMV to continue driving that share expansion as well.
Overall, I think we're very, very happy with where we are in the point-of-sale business. There were two other questions over there as well.
I think the second one was just the fuel transportation.
Yeah, fuel transportation.
Fuel transportation. Thank you for reminding me. The exciting thing about what we're doing with the Insite360 business that Andrea described. She spoke about the exchange, AAFES, the military stations. We supply a fuel logistics service. We do that for large retailers and small retailers. We are capable of helping them choose the optimum time to buy, as well as managing that business. The optimum time to buy from not just an inventory perspective, but also from the optimum time to buy on where they can buy at the lowest cost. We do have a fuel logistics business that is growing and very valuable.
Maybe just to globalize that as well, I mean, significant opportunity as you look around the world, your model, somewhat U.S.-focused, but if you look around the world, sometimes in some cases around the world, the retailer is also the fuel provider. In that case, it could be the expensive system. I think as you really think about the global capability that we've got throughout the portfolio of products, we really have the opportunity as these fuel management situations become more complex, supply chains become more complex. It's really an opportunity for us on a global basis.
Thanks, Jim.
Just if I may, a question on software as a service. Could you quantify, either for, it would be great for Fortive as a whole, what % of sales is software as a service right now? What's the profitability on an operating basis relative to the average operating margin, and what kind of rate of growth are you seeing?
I would say in that 20% or 25% of software services that we've referenced around Fortive, probably in the high single-digit number probably is SaaS, with Telematics being the largest. The overall profitability is every bit the fleet. I think you saw in the Telematics business slightly below the fleet and some of our other businesses slightly above the fleet. We're not seeing anywhere where we really see anything. Obviously, higher gross margins, a little bit more relative to investment in some of the R&D side, but you really see very good, strong operating margins.
Over here. Yeah. Thanks a bunch. Just curious on your blender pumps, if you could talk a little bit about the rise of ethanol, whether or not you're seeing a lift from that marketplace in the Gilbarco business. Is that significant?
We are seeing the fuel supply environment is becoming much more complex. Ethanol is certainly an opportunity. As we go on the plant walks, one of the examples we're going to give you is how we've grown our ethanol business in the state of Kansas. We find it a very much a regionally focused business where there's promotions from regulators or manufacturers around promoting the use of ethanol. You'll see some examples of how that is actually coming through.
Okay, just a separate technology question would be on electric vehicles. I know most people probably don't expect that to be a huge percentage of the fleet, but if we take a long view, five, 10 years, is there a way to leverage what you have in Gilbarco to capture some of the value and rise in EVs?
I think we're still waiting to see how that electric vehicle market plays out. Clearly, it's still a very small portion of the total vehicle fleets around the world, and we're keeping a very close eye on it. It really depends, I think, on how the technology plays out and where the gas stations become a valuable part of that electric vehicle fueling infrastructure.
We're going to go last question, Jamie.
Jamie.
How specific is your advantage to your transportation domain expertise? You talked about doing some things in construction. When you have your point-of-sale software on that side or the telematics stuff, is this something that can be applied into other industries, or is your advantage really specific to transportation?
I'll start. I think if you look at the install base that we've got in a broad thought around transportation all throughout the fuel management sector, whether it's some of the obvious things. As an example, in construction, where we're really on the site, we're doing a lot of the work through Gilbarco Veeder-Root, but we're also providing a lot of the service on fuel transportation and things like that through telematics. We've brought all of those technologies you've seen in the last hour or so all together in one particular vertical. Every vertical is a little bit different, and we think more broadly around some of these technologies. There's certainly a thematic advantage to having some of the things like, as Martin mentioned, the telematics business that really understands how to have a go-to-market in a software business like this.
Specifically around some of those technologies, they're pretty independent to Transportation Technologies. I wouldn't see them portable. If the question is, are they portable in other platforms? Not yet. Thematically, but not directly. Okay.
Thank you.
I think Dan's going to come up here for a second. We got to end with Dan. Thanks.
Good afternoon, and thanks for coming. If I could ask Jeff Sprague, Scott Davis, and Robert Cornell to come up to the stage for a moment. Bob, we wanted to, as a broad group, collectively thank you for your many years of service to the industry. You may have to. Both Scott and Jeff wanted to say a few words. Maybe Jeff, if you could kick us off, that'd be great.
I know Bob, in a moment.
You might want to get up to the mic.
Oh.
Sorry.
I'm not on the webcast. I know in a moment there's going to be a slide that's going to go up, and I don't want to steal Dan's thunder on that, but it's going to actually show a picture of your report there it is, when you initiated coverage on Danaher. That's very interesting, actually, in the context of today because I also picked up Danaher in 1998. Now, thankfully, I'm 20 years younger than you. I remember going to Washington, D.C., and sitting in Pat Allender's office, in George Sherman's office, and your report was on their desk. I'm like, "Damn, Bob beat me to it." That was a good piece of work.
It's also kind of fitting for today because George Sherman said, "If you really want to learn Danaher, you got to go to Simsbury and visit Veeder-Root, and there's this young guy, Larry Culp, that runs it, who you're really going to be impressed with." It all kind of ties to today. It's really been a pleasure working, I'd say, really working with you. We've been competitors, but you were always a gentleman. Bob always was willing to mention or point out or ask a question or give advice. I'll just say one more thing and cede the microphone.
I remember I was just a young cub analyst at Automation Fair. Bob said to me, "Automation is this certain kind of alchemy, and if you can figure this out, you'll make a lot of hay over the years." I'm like, "I'm going to figure out automation." Bob, you helped me with that. Thanks a lot.
I'm outclassed on this stage. I don't feel like I deserve to be up here with these two, three fine gentlemen, but two exceptionally good analysts who have driven me to try to be better for a long, long, long time. Early in my career, I remember standing up to my boss and him asking me why I wasn't moving up the rankings faster. I just said, "I can't beat Robert Cornell." I said, "I have no chance of being Bob or Jeff Sprague either, but I definitely cannot beat Robert Cornell because he knows 50 times more about every single one of these businesses than I know. It's going to take me 30 years to catch up." I tell you, working with Bob the last five years, I've gotten to respect him as a person more than even a competitor.
I'm going to miss him a lot. He's been a great mentor and friend to me. I just can't say enough good things about Bob. Thank you for all you've done. I hope we see you around at these events going forward. Thank you.
Bob, we have a few things for you. The first is a plaque, crystal plaque. It reads, and you can read some of it here, but, "Robert Cornell, 40 plus years of dedicated service to the investment community." 39, and I'm pretty good with numbers, but I'm not precise. 39 appearances in multiple capital goods/industrial All-America research teams, including 15 times at number one. A member of the Institutional Investor All-America Research Hall of Fame. Widely respected for his in-depth research, stock picking, and ability to develop strong working relationships with company management. To quote Bob, "To make money in this industry over the long term, you have to rise above humdrum day-to-day considerations and see what changes are coming and which companies can adapt." Thanks for your support, including 55 quarters of Danaher coverage.
Thank you, Dan.
Thank you. One more thing, please.
Oh, goodness. Thank you very much.
Unfortunately, Pat, Patrick Allender could not be here today, but he does send along his best wishes as you enter your next phase of your life. Pat, myself, and all the members of the Danaher leadership team, past and present, want to thank you for your two decades of support, great advice. To highlight that, we have a plaque which commemorates your initiation report, and you guys can read some of that right there in the slide. Again, Bob, thank you for everything.
Thank you, Dan.
Whatever's easier.
Well, this is a big setup, obviously, because I had no idea this was coming. I want to thank, well, all the people at Danaher. I've met the management going back, as Dan said, to the George Sherman, Patrick Allender days. I've known Daniel Comas actually way, way back. We met, actually, when Dan was in, I think, high school, right? I won't go into that story, but I'll tell it later. He was a smart guy then, a smart guy now. I should've listened to him more than I did, honestly, over the years. I want to thank everybody that's in the room. It's been a great Obviously, this is a ceremony because I announced my retirement three years ago, three months, three weeks ago. Three years ago, in terms of work effort, maybe. You didn't mention my sense of humor, by the way, anybody.
I said I was going to retire because I'm actually old, and I promised my wife I would try retirement, which I generally will attempt to do. I'm leaving the door open. You never know. You may see me around someplace someday. I really do appreciate the initiative the Danaher folks have taken to say thanks to me, and I say thanks to him. I recommend the stock. The stock went up. I guess we both look good, and I thank everybody in the room for both of those things. Thank you, everybody.
Thank you, Bob.