The Internet of Things – “Smart” Products Demand a Smart Strategy

Providing financial advice to emerging growth companies, Woodside Capital Partners (www.woodsidecap.com) is an independent investment bank specialising in Mergers and Acquisitions (M&A).  Their report analyses the phenomenon of IoT through the perspective of corporate finance.  Three distinct points of view were taken during examination:

1. Strategic, corporate M&A vantage point.  Analysing completed transactions for insight into the likely areas where additional activity can be expected.  This was done by segmenting the IoT market in many different components that represent the core elements of the IoT value chain. 
2. Standards and regulations.  The implication that standards and regulations will have on the development and adoption of IoT.
3. Potential market size.  Estimates for a range of end markets from technology vendors to the end customers, whether industrial or consumer.

Analysis of M&A activity has identified existing strategies and exposes the differences between different markets, skillsets and resources.  Opportunities and challenges are best considered by taking a broad look at technology and market considerations.  A framework was constructed to examine completed transactions and predict potential future activity, this framework is based on emerging trends and capabilities of both active players and new entrants.

It was noted that there is a large disparity among predictions of market size between various sources.  Although the absolute magnitude of impact is still opaque it was found that IoT will have extensive and long lasting implications across many industries.

The report concludes that long term corporate strategy is required for IoT.  The decisions, based on anticipations and in response to competitive strategies by other participants, made now will determine the winners and losers over the next few years.