It’s been about 18 months since my original attempt at charting the Internet of Things (IoT) space. To say the least, it’s been a period of extraordinary activity in the ecosystem.
While the Internet of Things will inevitably ride the ups and downs of inflated hype and unmet expectations, at this stage there’s no putting the genie back in the bottle. The Internet of Things is propelled by an exceptional convergence of trends (mobile phone ubiquity, open hardware, Big Data, the resurrection of AI, cloud computing, 3D printing, crowdfunding). In addition, there’s an element of self-fulfilling prophecy at play with enterprises, consumers, retailers and the press all equally excited about the possibilities. As a result, the IoT space is now reaching escape velocity. Whether we’re ready for it or not, we’re rapidly evolving towards a world where just about everything will be connected. This has profound implications for society and how we collectively interact with the world around us. Key concerns around privacy and security will need to be addressed.
For entrepreneurs, the opportunity is massive. Where Web 1.0 connected computers to the Internet and Web 2.0 connected people, Web 3.0 is shaping up to be connecting just about everything else – things, plants, livestock, babies… Each new wave has spun out giant companies (Google and Amazon for Web 1.0, Facebook and Twitter for Web 2.0). Will Web 3.0 create a comparable group of behemoths?
The space has been evolving so rapidly over the last year and a half that our IoT landscape became quickly outdated. Here is a revised and updated version. A few notes: as always, and despite our best efforts, a number of great companies will be missing; omissions are completely unintentional. Also, as much as possible, we have tried to put one brand per category, although many companies probably belong to several categories. Finally, categorization of a rapidly evolving space is an imperfect exercise – we have done our best to be directionally correct, but we’re certainly open to feedback on how to make this chart better and more accurate.
Some comments on the chart:
Explosion of startup activity: With hardware incubators graduating legions of new entrepreneurs, crowdfunding in full swing and an increasing number of VCs excited about the space, new companies and products are popping up left and right. The previous version of this chart featured 199 companies – it now has 612 logos!
Big companies are very active: I’ve written this before about the connected home segment, but this is a distinctive characteristic across the board: large companies have been active in this space or closely related spaces for a long time and are showing no interest in letting themselves get disrupted by small startups. This is true for industrial companies (GE, Siemens, Bosch, Philips, etc.) as well as big tech (Cisco, Intel, Apple, Samsung, etc.). The increasing impact on the space by Google, a fairly recent entrant in the hardware category, will be a development to keep an eye on in the coming months.
M&A activity is accelerating. Since the first version of the chart 18 months ago, a number of promising startups have been acquired: Nest and Oculus, of course, but also others such as Basis, Dropcam, SmartThings, Revolv, etc. Partly as a result of this, it’s pretty striking that there are comparatively few mid- to late-stage startups in the IoT space.
A global phenomenon: Innovation in the IoT space has been happening all around the world. Europe has been very active (Withings, Sigfox, Netatmo, Berg, and many others), as have other parts of the world (Australia with LIFX, etc.).
Some areas are getting overheated: The wearables market is probably getting close to its saturation point, at least for casual/consumer products (trackers, watches, etc.). The connected home segment has seen large companies make aggressive moves through acquisitions, investments or product launches (Google with Nest, Dropcam and Revolv, Apple with Homekit, Samsung with SmartThings, GE with Quirky/Wink), and the opportunity to become the home’s central “hub” is quickly becoming a deep-pocketed player’s game.
Plenty of other areas are just getting started: Innovation is accelerating at an incredible pace in a variety of segments such as digital health (patient monitoring), “invisibles” (connected pills, connected contact lenses), augmented reality, enterprise and industrial internet (asset tracking, energy management, machinery monitoring), smart cities, robotics, connected cars, aerials (drones, nanosatellites), user interfaces, software platforms and analytics, developer tools and ecosystems, security applications, and connectivity infrastructure. Just as certain verticals have neared critical mass, new and innovative applications have been spun up and built out.
In many ways, this is just the beginning. A lot can go wrong, but we are all in for an exciting ride.
This updated chart has been a team effort at FirstMark. Many thanks to David Rogg who handled the research and heavy lifting on the chart, as well as Caitlin Graham (logos), Dan Kozikowski (interactive version) and Sutian Dong (original version).