The opportunities in enterprise IoT are limitless. From operational cost savings, to collecting and analyzing data in real-time, IoT provides impactful and sustained value creation. If consumer IoT is big, enterprise and industrial IoT has the potential to morph consumer as legacy players like GE, Siemens and Verizon create society’s infrastructure. From industry 4.0 to energy, smart cities to healthcare, mobility to construction to wireless infrastructure, the verticals that IoT are transforming are limitless. But how?
Last year was an incredible one for IoT with several billion dollar acquisitions of IoT companies by large corporates. In fact, IoT drove a significant percentage of the total M&A activity in tech.
Big players like Verizon, SAP and GE have been gunning to expand their data and analytics capabilities in an effort to monetize their huge data sets. The number of notable IoT acquisition deals has been steadily increasing since 2013, a time when there were only six deals averaging $100M each. And by 2016, there were over 50 IoT acquisitions valued close to $1B each.
The increase in trend signifies IoT’s inevitable dominance in the M&A landscape in the coming years.
So does this mean that the corporates have settled on a buy vs build model? We have seen corporate ventures funds at an all time high coupled with new corporate accelerators like Techstars IoT in partnership with GE, SAP, Bosch, PwC, Verizon and UrbanX in partnership with BMW / Mini among others. But as we know, the challenges with investments and acquisitions lie in the delicate art of integrating with key business units.
Legacy companies must grapple with structural integration without killing a startup’s agile development and culture, while simultaneously protecting its own integrity and objectives.
A handful of our very own corporate partners at Techstars have made several significant acquisitions in the past year. Verizon had a busy year, buying Telogis in June (estimated at $930M), Fleetmatics in August for $2.4B and Sensity Systems in September, and LQD WiFi in November. GE was also busy acquiring Meridium for $495M, BitStew Systems for $207M, as well as Wise.io.
SAP’s acquisition of Plat.One in October was another noteworthy deal that bolstered SAP’s existing software network with an enterprise-grade IoT solution. These deals as well as corporate partnerships with accelerators indicate an obvious demand for enterprise IoT adoption; it’s only a matter of time before other legacy players begin to catch on since the opportunities to facilitate growth and maintain a competitive edge are in plain sight.
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