Acquisition Integration and the IoT 

 September 11, 2023

By  Steve Nunn

One of the biggest changes that is happening in society, in my opinion, is the increased amount of information that is available to us. Not just social media videos, blogs, and white papers, but useful, practical information that helps people in their personal and business life. For example, you’re in the car and your destination is a car park. It would be useful to have a good estimate of how many parking spaces are likely to be in the car park at the time you get to your destination.

McKinsey white paper

The following article from McKinsey & Company is worth reading:  Unlocking the potential of the Internet of Things (IoT) (links below). IoT is a catch-all term for devices that monitor situations, e.g. if a warm object moves past an infrared camera, or a wearable device is moved by the person wearing it, or a bridge beam deflects when a heavy load goes over it. Usually the internet is how this data is transmitted to a place where it can be analyzed, hence Internet of Things.

We’ve had real-time monitoring of assets since the 1960’s, so what’s different? The era of IoT is about capturing data more easily, and making intelligent sense of the huge amounts of data collected. The IoT is all about turning data into useful information.

Integrating IoT businesses

The IoT is changing the way that businesses work, and with that comes some interesting integration scenarios.

Leave Autonomous

Mergers and acquisitions in IoT tend to be smaller, specialized businesses that are acquired. Many of the acquirers are quite large. The challenge for successful value realization is to sustain the chemistry, vibrancy, and market responsiveness, while absorbing them into the larger business. The best way to do this, is using the integration approach Leave Autonomous, which we have discussed in the past.

In short, Leave Autonomous begins with a period of learning and planning – not action. When both sides agree to start, a partial integration of the businesses takes place. This approach is a great way to sustain the energy and culture of an acquired business.

IoT Tech Platforms

Making the most of IoT technology will required extracting information from data that is collected, stored and analyzed in different locations. Interoperability is key, and it could be extremely difficult in some areas. There are a number of technology companies out there trying to be the IoT platform of the future. Each has its own way of storing data and while the market grows they’re in a land grab for market share. It’s the Wild West of IoT, and there isn’t much need to collaborate with competitors.

Consolidation Approach

There is some consolidation of this market, which is likely to see tech companies acquiring competitors to gain market share. Their integration strategy will be to increase their IoT offerings to the market, either by merging the technologies together or offering more solutions. For example Dialog Semiconductor acquired chipmaker Atmel for $4.6bn to offer a better product portfolio for the Internet of Things. Jalal Bagherli, who led the enlarged company, said in a phone interview. “Companies are trying to position themselves”. A more recently example is the Kore Group acquisition of Twilio’s IoT business. They call it a mission to build an initial “IoT hyperscaler”.

When a company acquires to consolidate a market that they’re already in, the most common integration approach is Consolidation, where the whole business is absorbed, merging these technical products and the Back Office.  As you’d expect, expertise is in short supply, so acquiring companies should ensure that their strategy has a focus on staff retention.

IoT: everyone agrees that we’re just getting started. Watch out for more acquisitions and integrations from this space. Change is coming.

Here’s the 24 page executive summary from McKinsey http://www.slideshare.net/OptimediaSpain/unlocking-the-potentialoftheinternetofthingsexecutivesummary
Here’s the 144 page full report http://www.slideshare.net/polenumerique33/mckinsey-unlocking-the-potential-of-the-internet-of-things-iot

To learn more about the different ways to integrate a business, click here.

This is an updated blog, first published in January 2016.


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