In-brief: It’s early days, but consolidation among Internet of Things players has already begun, with tech giants cementing their position.
Forbes.com has an interesting contributed piece from Michael Wolf that takes a look at some of the consolidation that’s already happening in the Internet of Things market.
Wolf notes that – utopian-ism aside – the IoT market will work just like other markets: with the spoils concentrated among a few, large players with the resources and reach to turn really big profits.
Wolf notes that there are many, promising markets under the IoT umbrella: wearables, smart homes, industrial networking, connected cars. But don’t expect to see new Googles or Facebooks emerging in those markets.
From the article:
“Mobile phones have 10-20 legitimate players in the market, but 80% of the market share is eaten up by the top 4-5 players. Same with network hardware, PCs, and more other categories. Not that there isn’t a decent living to be made off a vibrant and growing ecosystem dominated by a few companies (there can be)…but, as often as is the case, there will also be lots of companies across the entire value chain that either fall into the hands of bigger players or disappear completely in time.”
That trend is already emerging. There’s Google buying Nest and a slew of other IoT players and value chain partners. You’ve also seen platform consolidation, like PTC’s acquisition of Thingworx and Axeda. But Wolf notes British Gas’s acquisition of smart home vendor Alert Me.
“The common thread between these acquisitions? They all represent technology behemoths…realizing they needed to bolster their core portfolios to capitalize on a trend and a market they saw as an important and growing one.”
Look for more of the same, as Apple, Microsoft and others start picking off sector leaders.