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There’s been plenty of hype around the Internet of Things and, more latterly, the Internet of Everything over the past couple of years. But it was only really in 2014 that companies in the space really came into their own.
According to technology research company 451, there were around 60 Internet of Things related acquisitions in 2014 at a total value of US$14.3-billion.
This, it says, represents a fortyfold increase over 2013 and is eight times as much as the total spent by acquirers prior to 2014.
Driving the surge in acquisitions were companies such as Google, Samsung, Cisco, Intel, PTC, Qualcomm as they looked to stake out their ground in an effort to position IoT as a key contributor to corporate strategy.
The sharp rise in deal-making activity in 2014 suggests that market forces surrounding IoT have become sufficiently compelling to demand action. “Acquirers don’t want to cede anything to a growing list of competitors as demand for IoT services in both consumer and industrial markets builds,” said Brian Partridge, Vice President of 451 Research’s mobility team, “The expected growth in this segment will drive enterprise spending across a myriad of building-block categories from embedded computing systems to communication infrastructure, IP networking, cloud and datacenter technologies that will form the foundation of the next generation of connected machines and services. We expect to see even more activity in 2015 as the cost and risk hurdles to IoT adoption are overcome and the competition to serve these markets increases. Any firm with the strategic intention of being an IT infrastructure and services leader over the next 10 years does not have the option to ignore this market.”
M&A activity in the space, 451 says, was pretty evenly split with 20 deals in the infrastructure arena, mainly covering a broad range of sensors, semiconductors, software platforms, security infrastructure and connectivity technologies needed for IoT to work effectively.
Within the verticals, the transport and logistics segment led the field with 11 transactions, followed by the fitness and healthcare segment with 10 transactions. Acquirers also purchased five companies related to the home automation segment.
While Google’s US$3.2-billion acquisition of Nest was obviously the biggest Internet of Things acquisition for the year, 451 also outlines PTC’s US$170-million acquisition of Axeda and Intel’s US$100-million acquisition of BASIS Science as important.
The latter, it says, is particularly important for Intel’s wearable plays. That said, it slightly surprising given that Intel supplies chip sets to a number of BASIS competitors including Jawbone and Fitbit.