Axeda acquisition makes PTC an IOE power house

July 26, 2014
axedaThe creation of the Internet of Everything has been going on for a while now. It is easy to find estimates of the number of connected devices some years from now and how much the market will be worth but still hard to find the evidences that it actually happens and in which pace. A year ago I declared that we entered the teenage phase meaning that early moving customer started to go from power point and  plans to pilot trials and roll-out. I still believe we are in the teenage phase but another important indicator – mergers and acquisitions – is starting to show that we are coming closer to the real take off. Because of this I will try to track relevant M&A deals in my blog onwards.
Intel recently acquired Basis Science with their advanced health tracker, Google has spent about $5B acquiring Waze, Nest and Dropcam but PTC’s recent acquisition of Axeda for $170 million in cash following their $112 million Thingworx acquisition in December are even more interesting to me. PTC provides systems and solutions to a long list of very large companies globally and they obviously believe being a leader in IoT system and service enablement is key. I believe the Internet of Everything will be grown-up in less than two years from now and insist that the key difference from when people and companies were connected to the Internet is that ignorance will not be an acceptable excuse this time.

What is Google up to?

June 24, 2014

dropcamMergers and acquisitions indicate rapidly growing markets ahead. Google made a 3.2B$ acquisition of Nest in January. Now they just followed on with an acquisition of the Wi-Fi surveillance camera maker Dropcam for 555M$. Thermostats, smoke alarms and cameras – what is Googles plan? I think it is the homes and maybe offices they are after. There are many thermostats, smoke alarms and smart cameras available but Nest and Dropcam definitely comes with a cool design which should at least bring home healthier margins. People love nice products! Google has always been interested in Wi-Fi and it’s not a wild bet that there will be Wi-Fi in homes and offices. But this can’t be enough, they must be going after a service model with recurring revenues and collecting data from these devices to store, manage, analyze and sell. I have always claimed that “data is the gold of M2M” and I am confident that Google shares that view.

Provided I’m right, I still questions that idea. Even if Google spend another couple of B$ to buy companies with cool things (Sonos could be a good target) they will never get market share over maybe 5-10% and scattered around. I understand that they could sell the information back to the users of these devices but that seems to be a difficult path to get the money back. And if they try to sell the data elsewhere I would believe the owners of the devices and policymakers would have a view on that. But Google knows all that. The recurring revenues are obviously attractive but it feels questionable to pay this much to get there.

On top of all I believe their will have to be at least three separate wireless networks in homes: an unmanaged Wi-Fi with good performance but only best effort services, a really secure fully managed network for security related applications like door locks, surveillance and medical monitoring, and maybe even a third managed low bandwidth network for connecting things like fridges, coffee machines, etc. And even worse, we will see a mix of WAN and LAN technologies being used as well. I simply don’t see how one can deliver sensible services like surveillance or smoke detection over an unmanaged best effort Wi-Fi network. Successful companies with such services like Verisure today typically manage their own network.

So I am probably wrong. Goggle sees something I don’t. And they also understand the down-side of connected hardware since Nest just had to recall 440.000 smoke alarms due to a potential risk that they didn’t alarm immediately. But I am happy for their acquisitions since it stimulates entrepreneurs, customers and other companies who consider playing a sincere role in building the Internet of Everything.


What an exciting start of the M2M year 2014!

January 15, 2014

nest tstatIn my Christmas Internet  of Everything Chronicle I wrote that 2014 will be the year when IT players jump on the band wagon and when M&A activities will accelerate. With Google acquisition of Nest for $2,3B and PCT’s acquisition of Internet of things startup ThingWorx for $112M I have already delivered on my prediction. And it’s only January 15 today!

Since data is the gold of M2M Google is an obvious player in this field. And by buying Nest they made a clever inroad to people’s homes. The logic is that people buy “the thermostat that Jobs would have loved” regardless if they need it or not, Google start collect valuable data and use it together with all the other data they have. Then Google can leverage the Nest thermostat and other devices to also collect other type of data from the homes. Brilliant! But it is worthwhile to notice that some Nest loving consumers have already stated in public that Google is not welcome in their home and some have even smashed their Nest device. But I think this is a clever move which will put Google in an interesting position. And their acquisition will be an eye-opener to many other companies. You already know that I believe the only difference between when we connected people and business to the Internet and now when we connect things to the Internet is that ignorance will be no excuse this time.
What an exciting start of the Internet of Everything year 2014!

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