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Tuesday, January 13, 2015

Internet of Things M&A Deals Reached $14.3 Billion

According to the latest market study by 451 Research, a variety of acquirers increased their mergers and acquisitions (M&A) activity within the Internet of Things (IoT) marketplace during 2014, spending a combined $14.3 billion to acquire 60 companies.

By comparison, that spending is almost eight-times the total spent by acquirers prior to 2014 -- representing a forty-fold increase over 2013. Meanwhile, the ongoing interest in the IoT-related venture capital investment market is likely to blossom during 2015.

The number of corporate M&A deals increased more than twofold, with companies such as Google, Samsung, Cisco, Intel, PTC, Qualcomm and others increasing their effort to position IoT as a key contributor to business growth strategy.

451 Reserach analysts believe that the sharp rise in deal-making activity in 2014 suggests that market forces surrounding IoT have become sufficiently compelling, which has simulated major IT vendor action.


"Acquirers don’t want to cede anything to a growing list of competitors as demand for IoT services in both consumer and industrial markets builds," said Brian Partridge, vice president of the mobility team at 451 Research.

The growth will drive enterprise spending across several categories -- including embedded computing systems, communication infrastructure, IP networking, cloud and data center technologies. Together, they will form the foundation of the next generation of connected devices and related IT services.

Vendors with the intention of being multifaceted mobile tech sector leaders over the next decade need to make their move soon, by choosing market segments. So far, M&A activity in was almost evenly split between IoT-enabling horizontal infrastructure, and vertical industry IoT applications.

In the infrastructure arena, acquirers closed 20 deals, primarily targeting a broad range of sensors, semiconductors, software platforms, security infrastructure and connectivity technologies.

451 Research noted that within the market verticals, the transportation and logistics segment led the field with 11 transactions, followed by the fitness and healthcare segment with 10 transactions. Acquirers also purchased five companies related to the home automation segment.