Okay, this is not really about tracking snacks in the cloud. It’s about tracking snack sales in vending machines in the cloud.

Forbes magazine interviewed Mandeep Arora and Anant Agarwal, the founders of Cantaloupe Systems, Inc., a Berkeley, CA, based company whose product, seed, enables wireless transfer of sales data, machine operation, and inventory to vending company operators.

CEO Arora and CMO Agarwal, who met as undergraduates at UCLA, say when they first started looking for ways to improve the operations of vending machine companies, they found the best systems cost around $1,000 per machine. “We got lucky. Cloud computing and cellular networks were being stressed when we were in school [in the early part of this decade].” The ability to transmit data via cell networks and enable access to data online helped to dramatically cut the costs of this kind of system.

On the Cantaloupe Systems web site, the service is described as a four-step process:

• A seed wireless device is placed into vending machines, where it “harvests data from the DEX serial port of the machine.” The seeds also send and receive DEX data between vending machines, “creating a virtual cloud of data.”
• Once acquired, the data are relayed to a cell-phone enabled hub seed via an antenna. The hub relays all the information it receives from the machines to Cantaloupe Systems home base via cellular signals.
• At Cantaloupe headquarters, the information is encrypted, sorted, and stored in “robust SQL databases,” where current or historical information can be accessed online by the vending machine owners and the landlords who host the machines.
• Sales, rebate, and inventory tracking is possible. Malfunctions or even break-ins are instantly identified. Drivers who service machines can bring exactly the products they need to various sites.

The seed device enables vending machine owners to grab information in real time from every machine, and using the seed website (see below) to see business activity in real time.

Source: Cantaloupe Systems, Inc., Marketing Packet

Cantaloupe customers can receive alerts about sellouts and machine malfunctions; track cash from each machine; see real-time inventory by machine; create custom sales reports; and export data to industry-standard formats.

Cantaloupe’s web site has detailed profiles of some of its customers. Prominently displayed over their photos is evidence of the benefit the service has generated. Examples include Camelback Vending, Phoenix, AZ, which realized an 85% reduction in service calls, and P&J’s Vending, Hopkinton, MA, which placed 25% more machines per route.

Cantaloupe’s seed device costs $300 per machine and the monthly service costs $6. Cantaloupe’s devices are in 35,000 machines, generating $8.5 million in annual revenue. In 2010, Arora and Agarwal say they plan to integrate credit card readers into their system.

In 2007, Cantaloupe Systems received the Gold Value Chain Award for innovative adaptation of M2M (machine-to-machine) technology in the retail / hospitality category; that was the second time in three years the company won the award.