Mar 23, 2014

PTC-ThingWorx dual-aggregation business model

I was recently in discussion with an executive from an M2M service provider who was marveling at the sizable sum - $112m plus a possible earn-out of $18m - for which ThingWorx was acquired by PTC.

By way of context, PTC supplies software and service solutions to discrete manufacturing organizations to help them create and service their products; example products include heavy machinery, medical devices, air-handling and fire-protection systems. While PTC has been in business for over 25 years, ThingWorx was established as recently as 2010. Its aim was to create a platform to speed up the process of developing applications for smart, connected services involving people, systems and devices.

The acquisition should not come as a surprise to readers of this site. The pattern of corporate initiatives in the connected devices market and the rising role of end-user companies were anticipated at the end of 2012.

Mar 3, 2014

Commercializing the Internet of Things

This article was commissioned by Telit Communications PLC and appeared in telit2market magazine, February 2014

The IoT phenomenon has superseded the traditional market for M2M applications, primarily by embracing a wide variety of Internet- and consumer-connected devices. This is what accounts for long-range market forecasts of billions of connected devices.

Early experiences with IoT applications have focused on novelty – such as connected household appliances – rather than long-term commercial prospects. Many of these implementations simply involve the application of silo-like, M2M concepts to new types of devices and sensors. For companies that aim to develop an IoT strategy, however, failure to distinguish between M2M and IoT is a risk to long-term business strategy.

Feb 11, 2014

Google NEST – a case of déjà vu?

Almost 10 years ago, Amazon formed a team to work on a groundbreaking, highly integrated consumer product. Amazon began with a goal of improving the user experience surrounding physical books. The initiative was led by Gregg Zehr who brought considerable pedigree having previously been the VP of Hardware Engineering at Palm Computing.

The new team was set up outside of Amazon and its strategic objective was complementary to Amazon's mainstream activities. This was the genesis of Amazon’s Lab126, a start-up that focused on product innovation around a new generation of connected devices. Amazon's connected device road map has progressed from the connected eReader to tablets. Most recently, Amazon’s Kindle has been talked about as a point-of-sale device.

If we fast-forward to the present day, it is difficult to escape a sense of déjà vu when looking at Google’s acquisition of NEST. Here we have a separate entity with core competencies in creating highly aesthetic consumer products, led by executives with a strong Apple-design pedigree. And, according to Google’s CEO Larry Page, Google and NEST are “excited to bring great experiences to more homes in more countries”.

However, relative to Amazon's start-up costs ten years ago, it seems that the entry cost for a new category of innovation in the connected devices arena has gone up to the order of a few billions dollars!

So what did Amazon accomplish with Lab126? What might we expect from Google/NEST? And, what does this mean for companies that can’t afford billion dollar initiatives?

Jan 26, 2014

Review of M2M Corporate Events in 2013

2013 as a whole was another year of strong corporate activity in the M2M market. A total of 147 events easily surpassed the 115 events that were recorded in 2012. These events include: announcement of an industry changing technology breakthrough; market entry/expansion initiatives; strategic partnering; investment-related acquisitions or divestitures; distribution agreements along the value chain; product innovation and outsourcing of key service delivery capabilities.

While 2013 saw many more companies taking to the press wires to publicize their sales wins, these are not recorded here as corporate initiatives. If anything, sales wins are the consequence of one or more corporate strategy commitments made in prior years.

An important development that occurred over the course of 2013 was a shift in sentiment to promote IoT in preference to M2M. This began with a raft of announcements at the Consumer Electronics Show (CES) in January 2013. Momentum continued to build around the IoT theme due to significant publicity drives and business commitments by large organizations such as ARM, Bosch, Cisco, GE and Intel.

Jan 11, 2014

Trust in Identity

The 2014 CES show is currently generating a lot of consumer technology related press-headlines as different corporations reveal their stakes in seeking to capitalize from the emerging IoT market. IBM/Technicolor got the ball rolling with their IoT/M2M monitoring offering. They were soon followed by Google and AT&T/Ericsson with their connected car ambitions. Intel and Sony also registered on the IoT radar with their messages about miniaturized and wearable connected device offerings.

These companies and the many others that have latched on to the M2M/IoT phenomenon share a vision of a sharp rise in the total population of connected devices.

As this trend develops, users will become ever more dependent on their connected devices. This will give rise to three interesting industry developments each of which represents a potential commercial opportunity.

Nov 17, 2013

The IoT Gets Real as Corporates Commit

2013 has witnessed a strong growth in the number of corporate initiatives that make explicit reference to the Internet of Things (IoT) in contrast to terms such as M2M and “embedded solutions”. It seems that large companies are committing to a market where much of the recent activity can be attributed to start-ups and academia.

A few weeks ago in early November, Intel demonstrated its commitment to the IoT market by creating a special division called the IoT Solutions Group, combining its Intelligent Systems Group with its Wind River acquisition. This development seems like the product of a progressive evolution in Intel’s strategy for the ‘connected devices’ market dating back to its mid-2009 acquisition of Wind River for almost US$900m.

It will be interesting to see how well Intel’s internal re-organization efforts now proceed as it develops more of an IoT market presence, especially as one of its main rivals in the mobile computing market, ARM, has also been active with its own IoT plans.

Oct 21, 2013

Verticals, Horizontal- and IoT-Platforms

One of the implementation challenges that historically acted to restrain the M2M market is the issue of vertical-specific requirements. Each solution necessitated a new and/or tailored IT development effort; this had an impact on solution development costs and constrained the opportunity to realise meaningful economies of scale.

Over the past few years, the M2M industry has expanded in potential scale and scope. It is now interlinked with high volume, consumer oriented application opportunities and, more recently, with an extremely broad scope of connected devices under the Internet of Things/Internet of Everything/Industrial Internet umbrella. Most recently, this evolution has spawned a number of platform announcements from M2M market research firms and also from businesses, such as Aeris, GE and Wind River, many of which are recasting M2M capabilities in an IoT light. Was any of this predictable?