THE START OF SOMETHING GOOD
Welcome to the first edition of IoT Insider. Changes are coming to the nascent IoT industry with increasing speed. There will be winners and losers as the networks evolve, hardware standardization takes its course, and business models take shape. The industry is ripe for innovation from gutsy, entrepreneurial startups. Yes, there is hype and overselling. We plan to help you sort through this and try to predict which solutions and business models have the greatest chance of success. If you like what you see here, please subscribe and tell others about it. We also welcome feedback, tips on deals and startups. Shoot us an email at email@example.com or DM us on Twitter @lumenitix.
DEALS OF NOTE
- GE's plans to sell off its consumer lighting business is sad if you are an Edison nostalgia buff but makes business sense. There's a lot more future margin selling smart devices and their Predix industrial IoT platform than light bulbs.
- Giant French electrical supplier Schneider Electric is dumping ag information company Telvent DTN for around $900MM. Schneider has been piecing off parts of the Telvent business ever since it acquired the Spanish company in 2011. It paid $1.5B and has since made $1.2B selling off the bits it doesn't want. It's keeping a portfolio of technologies and software for advanced grid management, pipeline management, geographical information systems and SCADA - essentially the parts you need to build an industrial IoT powerhouse.
- A new $6.5MM Series A round for Oz ag IoT startup The Yield will help put Tasmania on the map in the US tech world and advance hyper-local environmental sensing technology and analytics. With increased volatility in weather, there's a growing need for measuring and managing to micro-climates. The initial market will be in high-value specialty ag operations, but there may be a broader market later in cropping where producers are chasing added yield.
FOLLOW THE MONEY
Bain and Company's analysis below suggests the real money in IoT will be in cloud hosting/apps/analytics. We don't have to wait until 2020 - the commoditization of hardware has started already. But the reality is you don't have IoT without the device and that device needs to be ultra-reliable. That takes some ingenuity in the area of power management and wireless technology. We expect the better solutions will rise to the top and command higher margins, particularly in tough applications.
BY THE NUMBERS
It's been happening faster in other parts of the world, but now we have reached tipping point in US on use of operating systems. The dominance of MS Windows has finally been broken by Android. Data from StatCounter below shows the steady decline of Windows from an astounding +80% share in 2012 to just 38% today. With expected growth of mobile and Android's dominance there, we see the Windows trajectory continuing downwards. Apple's desktop platform (OS X) is also headed down but it's mobile platform iOS is rising, although at a much slower rate than Android. Take note: if you are developing IoT apps, prioritize compatibility with Android.
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