The Internet of Things drove over $21B in 2015 deal value. As billions more “things” come online, the IoT’s visualization of the physical world could create as much value for customers and enterprises as the Internet itself.
IoT merger and acquisition (M&A) activity was extremely active across the board last year, with diverse buyers like Google (Boston Dynamics, DeepMind and Nest), Qualcomm (CSR), Adidas (Runtastic), Cisco (Jasper), even farm machinery Deere & Company.
Automotive was a dominant sector with strong trends in vehicle-to-vehicle communications, intelligent transportation systems, remote diagnostics, usage-based insurance solutions and traffic data services. These trends will only pick up speed as the car continues to cement its place as one of the true centers of the IoT ecosystem.
As IoT hardware matures and moves towards commoditization, the true opportunity lies with the innovative software and platform providers creating value in areas such as edge analytics, IoT operating systems, gateways, aggregation, modules, wearables, big data, cloud middleware and applications that also provide data privacy and cybersecurity.
Both established IoT players and traditional companies that find themselves needing to add IoT capabilities will be in acquisition mode in 2016 and beyond. Companies poised to address this spectrum of IoT software requirements will be highly attractive acquisition candidates in the coming year.