Transformation = Disruption. Regardless of your view of the IoT (Internet of Things) marketplace, those two words say it all. If your company is not saying those words often and using them to set the stage for where your company is headed within the next few years, then it’s a sure bet you have not made the CW 100 for 2016.
The CW 100 is constantly changing. It’s an ever-evolving ranking of the leading technology performers in the M2M/IoT today and those driving the charge heading into the future. This year’s top 100 performers are no exception. Every company that is ranked on the 2016 CW 100 accelerates the market growth via blockbuster M&As (mergers and acquisitions) or unprecedented technological evolution.
This year the companies that make up the 2016 CW 100 represent a total of $2.628 trillion in annual sales for the M2M/IoT arena. The top 10 companies in sales alone—Ericsson, Samsung, Apple, General Electric, AT&T, Verizon Wireless, HP, IBM, Siemens and Amazon—represent $632.9 billion in revenue, while the last 10—CradlePoint, Eurotech, Fargo Telecom, Sequans, DataOnline, Mesh Systems, Esprida, Ethertronics, Exosite, and 151 Advisors–generated more than $124 million in revenue.
So here’s how the numbers look even closer, large – $2.621 trillion (61 companies), medium – $4.891 billion, (20 companies), and small – $124.3 million (19 companies) in total revenue.
Unlike any time in its 13-year history, Connected World was given a chance to really go under the covers of the firms that appear behind the wall, so to speak. Thus, many of the companies have given the editors a chance to explore up close some long and short-term plans for the Internet of Things for the coming year. Connected World looked at how these companies would implement their vision to innovate, and perhaps dominate, the IoT in others.
Much of the reporting on this list is based on months of research, years of experience, and in-depth evaluation in determining the true market leaders of this ever-changing segment, and even differentiate the talkers from the doers.
It’s very clear the recent market projections have run the gamut and the economic impact of the millions of networked devices that will proliferate the global marketplace could be overwhelming. The real number of embedded devices for wearables, home appliances, smart-home solutions, industrial applications, healthcare, and infrastructure, clearly lies somewhere in the middle of all the analysts’ predictions. There is no doubt that trillions of dollars in value will be created through costs-savings if businesses apply the right predictive analysis to the IoT.
The industry is now made up of three camps. The first camp is comprised of companies that have been in this industry for many, many years. These companies are constantly looking to make their companies stronger. They are the risk takers. They might have been very dominant in a vertical or two and are leveraging that experience to leap-frog the competition to disrupt the market. They may do this through acquisition or by building a community of partners. They are building products and platforms that will transform the way customers go-to market and they are investing everything to make it work. (build vs. buy)
They are putting big dollars in this game-changing effort. They have spent unbridled hours walking the media through the effort. The have opened up the kimono—their inner workings of the process—to beta customers, partners, investors, and anyone necessary to give a peek into the plans and to address real issues. They are willing to put it all on the line. They recognize that failure, although always a possibility, is not an option and are fighting harder than ever to make their customers succeed even at their own risk.
The second camp is comprised of companies that have been in the industry almost since the beginning and they have a sense of arrogance. They are so large and have so much presence that in their own minds, they believe they will never be toppled. They believe they have enough money, partners, and reputation that they will continue to grow and they can pick and choose who and when to talk. They are the ones that believe they are constantly innovating and are disruptive, even at their own demise. (Sadly some partners and customers have a different view, kept silent for they fear retaliation). They are very braggadocios. Perhaps even lost in their own hype they don’t see the competition is coming in the form of smaller, more efficient, productive, and transformative players. (Maybe these companies should take a look at what is happening to Wal-Mart via Amazon). These smaller players, perhaps grow quickly, to be giants themselves, and so it begins.
And finally, there are the smaller more focused, niche players that have found a place and are doing a very good job at partnering and meeting a specific vertical need. They are the innovators and their technological impact will be significant. They move quickly. They find the right partners and scale accordingly. Many are M&A (mergers & acquisitions) targets because their solutions are so forward-thinking they influence big-ticket transactions worth millions, if not billions. They are sought out by both corporate acquirers and private equity firms looking to knock out potential competitors from the market.
Once again the IoT market is at a very pivotal time again. Translation: the M2M/IoT industry is up for grabs. This year’s list clearly reveals M2M/IoT is constantly changing as companies continue to partner, merge, acquire, develop, and disintegrate as fast as we can say M2M/IoT.
While the long-term impact of various M&As is difficult to predict it is clear that many of the M&As are leading to some powerful new innovation. Furthermore, a steady stream of both M&As suggest the space has a strong pulse.
As already noted, what’s so fascinating in this arena is how many new companies continue to make their way into the marketspace displacing the traditional M2M players from the CW 100 year after year. While the buying frenzy has been occurring quite steadily for quite some time, it’s pretty clear it will intensify in the months ahead if history has anything to say about it. Once again economic uncertainty and market hype will lead to market consolidation ultimately influencing the market ride. As we have stated all too many overhyped growth numbers will lead to the consolidation.
Let’s look at the actual numbers. Since its introduction in 2003, the CW 100 represents the top companies that are leading the M2M charge in connectivity. Couple this with the flurry of M&As that occurred this past year—the next 12 months will continue to be a hotbed of mergers—and these partnerships will surpass 318 since we started starting tracking in 2003.
The largest number of M&As occurred in 2006 (32), with the lowest being in 2010 (only nine). In 2011, there was renewed M&A activity with 24. The improvement in the economy had much to do with the 2011 revival as well as other companies having discovered they just couldn’t compete. The same might be true now, while vendors might be looking to burn up their extra cash, many companies need to get out before they find it’s too late. There are many M2M/IoT companies that are struggling. And in many cases all they have left are a few good customers. (Look back to sales of nPhase).
M&As are often an important part of a healthy ecosystem. M2M/IoT has a long history of M&As that have contributed to its growth and development throughout the years. The M&As occurring in today’s market will be no different in their formative role for the future of the space.
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