What the Internet of Things is NOT about

It seems that if your company doesn’t have an IoT strategy nowadays, you might as well quit. But not just any strategy will do. Let’s look at some of the hot topics in IoT today that are unlikely to make a dent in market adoption. Here are some insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for IoT.


Here’s what everyone knows about the Internet of Things. It’s going to be enormous. We’ll have tens of billions of devices by the end of the decade. This is a multi-trillion dollar opportunity over the next years. All the major players in consumer electronics, mobile, cloud, factory automation, enterprise IT and more will be fiercely competing for a piece of that pie. All this information shouts: [tweetable]if your company doesn’t have an IoT strategy you might as well quit[/tweetable].

Not just any strategy, of course. The history of technology is littered with great concepts and engineering feats that never became mainstream products. It’s worth looking at some of the hot topics in IoT today that are unlikely to make a dent in market adoption.

What IoT is not

A lot of the buzz in the media and on industry forums is about the Internet of Things technology itself. Standards. Security. Privacy. Whether to use Bluetooth, Wifi, cellular or mesh networks. If history is any guide, all of these important questions will get solved over time, but none are an actual roadblock to market adoption. iOS and Android didn’t depend on app standards to revolutionize the smartphone industry, for example.

Meanwhile, product designers have discovered IoT and are adding connectivity (internet) and services to their products with blazing speed. Washing machines, socks, ovens, shoes, cars, door locks, toothbrushes and even flower pots are becoming “smart”. The problem with this “product with an app” approach is that all those disconnected, individual apps will soon become impossible for users to manage.

The Internet of Things isn’t even so much about things. For example, companies like Google-owned Waze achieve better traffic intelligence by crowdsourcing smartphone data rather than through an extensive network of road sensors, typical for a Smart City project. True smart cities have taken note, and are starting to use Waze’s data. Waze literally never shipped a thing.

Breaking Free of Internet and Things

Here’s an uncontroversial, but often forgotten truth. [tweetable]The value of IoT products doesn’t come from the technology or the internet or the things[/tweetable]. Value is created in IoT by making sense of data, turning it into knowledge and meaningful action. It’s not the parking sensor that matters, but finding a free parking spot quickly and without frustration.

This perspective on the Internet of Things has some interesting implications. We predict that the most interesting IoT applications in 2020 will use data that already exists today, rather than new sensors.

Why? Value is created by making sense of data, and many data will have more than one possible source (like in the Waze vs traffic sensor example). New devices will be more expensive to build, install and maintain than solutions that mine existing sources of data. When a solution can be found that doesn’t require new sensors or hardware, it will prevail. Already, companies like Cellint use data from mobile network operators to monitor traffic jams in cities.

Internet of Things is not about how to add a service to my product, but about making my product work with every other service. It’s about how all those sensors, devices, things and services can be integrated into the user’s digital lifestyle. IoT is breaking free from Internet and Things.

Developer Tools: 2014 M&A review

From ad networks to customer support, developer tool startups have been popping up in the last few years to help app developers write less code, reach the right users and monetise. 2014 was a year with a wealth of M&A activity with over 30 transactions in the developer tools space.


Developer tools consolidation

[tweetable]There are more than 1,000 developer tools available in the market[/tweetable], with many of them popping up from one day to the next and (some of them) quietly disappearing after a short period of time. That means there’s one developer tool startup for every 1000 apps!

Ad networks, user analytics, and cross platform tools feature prominently among dev tool startups acquired in 2014. The acquirers were typically large companies, such as Yahoo, Apple, Google, Facebook, Twitter, Unity and Microsoft, who are building up Mega SDKs with comprehensive developer tool portfolios.
The majority of dev tool startups cannot survive on their own for long and are seeking VC investment or buyouts by the larger players in the field. Developer tools need a long period of seeding the market with free products, before they can hope to see conversion to a premium tier – let alone figure out what developers are willing to pay for.

In 2013, it was backend-as-a-service tools that were a must-have developer offering and the subject of acquisitions, most notably with Facebook and Parse. [tweetable]In 2014, it was ad networks that were the prime acquisition targets[/tweetable], and with cutthroat price competition and complex landscape this is only bound to intensify. We’re also starting to see an evolution towards UI technology as a developer differentiation, with the acquisition of Form by Google which was subsequently released for free in less than 3 months.

In the table below we’ ve tracked 33 developer tool acquisitions in 2014 (let us know if there are any we ‘ve missed?)

Developer tools acquisitions of 2014:

Company Product description Acquired by Date Acquired for
Sense Networks Mobile location advertising YP Jan 2014
Little Eye Labs Performance analysis and monitoring tools for Android Facebook Jan 2014 $10-$15M
InsightsOne Cloud-based predictive analytics solutions Apigee Jan 2014
Sparq Mobile marketing platform Yahoo! Jan 2014
GetJar Independent app store Sungy Mobile Feb 2014 $50M
Burstly Beta testing, user analytics and monetization Apple Feb 2014
Cloudant Database-as-a-service for web and mobile developers. IBM Feb 2014
Applifier User acquisition SDK with video ads and game replay SDK Unity Mar 2014
AdMobius Mobile Audience Management Platform Lotame Mar 2014
Testhub App testing services Applause May 2014
Mocean Mobile Mobile Ad network PubMatic May 2014
Distimo App store analytics App Annie May 2014
Capptain Push notifications and user feedback Microsoft May 2014
TapCommerce Mobile ad retargeting Twitter Jun 2014 $100M
Appurify Mobile testing platform Google Jul 2014
Flurry User analytics Yahoo! Jul 2014 $200M
MobileDevHQ App marketing Tune Aug 2014
5Rocks User analytics for game developers Tapjoy Aug 2014
Mongoose Metrics Call tracking technology Ifbyphone Sep 2014
FeedHenry Cross-platform tool Red Hat Sep 2014 $82M
PlayHaven Mobile gaming monetization platform Science Media Sep 2014
Mopay Mobile payments Boku Oct 2014
Ducksboard Dashboard visualisation technology New Relic Oct 2014
Firebase Backend as a service Google Oct 2014
Telerik UI frameworks and cross platform tools Progress Software Oct 2014 $262.5M
MobFox Mobile ad network Matomy Media Group Oct 2014 $17.6M
Tap for Tap Promotion exchange for app developers Pretio Interactive Oct 2014
Corona Labs 2D game engine Fuse Powered Nov 2014
Appifier Mobile App Builder AppMakr Nov 2014
Appia User acquisition platform Mandalay Digital Group Nov 2014 $100M
Taptica Mobile user acquisition platform Marimedia Nov 2014 $13.6M
Nexage Mobile ad network Millennial Media Dec 2014 $107.5M
HockeyApp App performance management and beta distribution service Microsoft Dec 2014

Even though the pace of acquisitions was down slightly in 2014, as indicated by the graph below, it still remains high compared to the 2011 and 2012 levels. As our research demonstrates, developer tools are correlated with both developer experience and revenue – and as such are becoming the competitive arsenal of those that want a fighting chance in the app stores.

M&As accross the 2011-2014 period:


In 2015 we expect to see the levels of developer tools M&A continue unabated, as larger players – from ad networks to media companies – leverage developers and their apps as a user acquisition channel. And with dev tool startups competing globally for a pool of 5.5 million app developers, the cost of developer acquisition is only going upwards, and not many startups will be able to afford it.