During the first four months of 2016, nearly two dozen major mergers and acquisitions in the Internet of Things (IoT) and related market segments have taken place, with Cisco, IBM and Intel among the top buyers.
Including Big Data Analytics, connectivity and wireless markets, Strategy Analytics research indicates the 2016 merger and acquisition activity may eclipse the pace set in 2015, which was a record breaking year both in terms of the number and value of acquisitions.
“At the end of 2010, there were a scant one dozen acquisitions in the then fledgling IoT market,” says Laura DiDio, Director of IoT Research, Strategy Analytics.
“By the end of 2015, we estimate that there were 81 mergers and acquisitions; that is a nearly seven-fold increase in five years.”
DiDio says the most desirable acquisition targets are companies whose core competencies revolve around analytics, security, connectivity platform capabilities and services.
As such, within those product categories IoT vendors are especially eager to acquire companies in hot vertical segments including: Automotive, Consumer wearables, Healthcare, Industrial IoT (IIoT), Manufacturing, Retail, Smart Home, Transportation and Weather.
“Also notable is the increase in the worth of the companies being acquired,” adds Andrew Brown, Executive Director of the IoT Strategies Service, Strategy Analytics.
“While vendors are still acquiring companies for $US50, $US100 and $US200 million, billion dollar acquisitions, such as Cisco’s $US1.4 billion purchase of Jasper Technologies IoT services’ platform in February and even multi-billion deals – are no longer rarities.”
Brown concludes that well targeted and executed IoT merger and acquisitions will provide vendors with “immediate tactical and strategic opportunities” to gain market share, increase customer base, boost revenues and advance IoT goals and increase influence.
“A focused merger and acquisitions strategy has the added benefit of consolidating the industry and reducing the number of competitors,” he adds.