In spite the fact that the term “internet of things” was coined by Kevin Ashton, executive director at Auto-ID Center, as the title of a presentation he made at Procter & Gamble in 1999, it was only after companies like Pachube, an early leader in the burgeoning IoT field, launched web services that enabled organizations to store, share and discover real-time sensor, energy and environmental data from objects and devices around the world that most of us believed the time for IoT had finally arrived.
Since its founding in 2008, Pachube pretended to be the leading open development platform for the internet of things. In 2011, when the company was acquired by Woburn, Mass.-based LogMeIn, Inc. in a deal that was worth approximately $15 million in cash, the service was rebranded as Cosm, but it was still a beta test version. It was finally launched as Xively and became a division of LogMeIn, which did not want or know how to incorporate the potential of Xively into its business.
Then, in 2017, Xively lost its charm.
On Feb. 15, we woke up to news from Bloomberg that Google will acquire IoT platform Xively from LogMeIn for $50 million to expand its market for connected devices. Here, Google has become the white knight of Xively.
Other white knights
On Dec. 30, 2013, PTC announced it acquired ThingWorx for approximately $112 million, plus a possible earn out of up to $18 million. The ThingWorx acquisition positioned PTC as a major player in the emerging internet of things era. Then in July 2014, PTC acquired Axeda Corporation for approximately $170 million in cash, which Gartner estimated was an acquisition multiple of just over six times revenue.
In Feb. 2016, Cisco acquired Jasper Technologies, Inc. for $1.4 billion in cash; what a wonderful white knight.
In Sept. 2016, software goliath SAP acquired the small IoT startup Plat.One.
Also in 2016, Microsoft did not disclose the sum for its Solair acquisition, an Italian startup that expanded Azure capabilities.
In March 2015, Amazon took another step into the internet of things by acquiring 2lemetry, a startup with a system for sending, receiving and analyzing data from internet-connected devices. 2lemetry had raised at least $9 million from investors, including Salesforce Ventures.
We all know the IoT platform market needs quick consolidation
The M2M/IoT platform market has changed in the last 10 years. The fragmentation is unsustainable, and all I can say is that I do not see a clear IoT platform market leader yet that works as a plug-and-play fix for all kind of connected device creators. Besides, the rush of investors for IoT platform companies triggers rumors of new acquisitions significantly increasing their actual valuation and encourages thousands of entrepreneurs and startups to create new IoT platform copies of each other. Although there is still room for new, innovative IoT platform startups, the decision to trust a company to be able to simplify the complexities of IoT with a scalable and robust infrastructure and drive real results for your business will reduce the choices to a short list. The bad news is that the hundreds of IoT platforms startups out there must now compete with the platforms offered by tech and industrial giant vendors.
Given the confusion that exists around IoT platforms, companies need to approach expert advisors who can recommend which platform(s) is most suitable for their current and future business and technical requirements.
There will not be white knights for everyone
In my recent post “Be careful of The Walking Dead of IoT,” I alerted that in spite of no one having a crystal ball, it is almost inevitable that many of the IoT platforms that exist today will not be around in 10 years — or maybe not even within one, two or three years, given the inflated market.
Some tech giants have been looking for and already found some of the best pieces. But what will happen to the 700+ platforms out there? While there will not be white knights for everyone, at least some IoT platforms have had a happy ending.
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