2018 Tech M&A Outlook

After accurately forecasting a slowdown in tech M&A last year, senior investment bankers are expecting a rebound in dealmaking in 2018. As they looked at their current pipeline for the coming year, nearly seven out of 10 respondents (69%) to the annual 451 Research Tech Banking Outlook Survey said it is fuller now than it was a year ago, on a dollar basis. The outlook for 2018 is more in line with typical forecasts than last year's survey, when a post-recession low of just half of the bankers indicated fuller pipelines.

To help you navigate this changing M&A landscape, join Brenon Daly, 451 Research’s Director of Financials, for a look ahead to activity in 2018. Drawing on data and insight from across 451 Research, our annual Tech M&A Outlook webinar will highlight specific trends in key enterprise IT markets – including information security, software, mobility and IoT -- that will shape dealflow and valuations in the coming year. Reserve your spot!

Banker pipeline 2018 copy
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Smart Home and ISP Trends: Smart Home Market Gaining Steam

Adoption of connected smart home products continues to grow at a steady clip. Could the emerging smart speaker category – led by Amazon Echo and just-released Google Home – accelerate the momentum in this space?

Our October survey of 2,051 North American consumers takes a look at buying intentions for voice-activated smart speakers from Google and Amazon, along with other key trends in the smart home market – including the most popular types of connected devices and how users are interacting with their smart home.

The survey also looked at the Internet Service Provider (ISP) industry in terms of satisfaction, biggest problems and customer loyalty.

Excerpt of Full Report:

Steady Growth for Smart Home Tech. The overall smart home market has grown steadily over the past year ‚Äì with a quarter of all respondents (25%) now saying they have at least one type of smart home device. This is up nearly 5 points since our October 2015 survey. 

Connected Devices – Planned First Time Usage. Nearly half (47%) say they’ll purchase a Smart Thermostat for the first time. Smart Outdoor Cameras (39%) is second, while Smart Lighting (33%) and Indoor Cameras (30%) are third and fourth respectively.


Report details also include:
• Are Smart Speakers The Next Big Thing?
• Steady Growth for Smart Home Tech
• A Closer Look at Smart Indoor Cameras
• Smart Home Retailers
• Future Smart Home Trends
• Competition Among Internet Service Providers

Learn more about Voice of the Connected User Landscape here. 

Report details also include:

¬∑         Are Smart Speakers The Next Big Thing?

¬∑         Steady Growth for Smart Home Tech

¬∑         A Closer Look at Smart Indoor Cameras

¬∑         Smart Home Retailers

¬∑         Future Smart Home Trends

¬∑         Competition Among Internet Service Providers

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When things attack: Mirai and the Dyn DDoS attack reveal a disturbing future

The October 21 attacks that knocked some of the internet's most-recognized brands offline in the largest recorded distributed denial of service to date reveal how little the world has taken seriously the threat of poorly secured consumer IoT. Will we be ready for what may come next?

The 451 Take

These attacks have only just begun to illustrate the level of exposure the world faces from what so far appears to be largely SMB products made for the Internet of Things. Indeed, this narrow focus says much about the potential scale of risk beyond the cameras and DVRs largely targeted in this case. While virtually everyone weighing in on the discussion agrees that something must be done to head off an even worse scenario, what remedies make the most sense? There are needs at virtually every level of IoT architecture, from the software and functionality built into devices to the networks and platforms that interconnect IoT's many moving parts. The recent attacks illustrate how easily poorly secured IoT can be made a platform for attacking the fundamental underpinnings of the internet that keep the entire digital world functioning. So far, most of the discussion around IoT security has revolved around protecting IoT itself, with considerable investment already having gone into securing industrial IoT, particularly in sectors where safety is a primary concern. The threat that vulnerable IoT poses in and to the larger world has been seriously underserved. The range of solutions proposed – from adopting the analog of building codes for software and hardware to sweeping regulation, and the inevitable arm wrestling each presents – makes it clear that resolving these vulnerabilities will not be easy. What concerns us most is that, as so often happens with security, it will take an incident of serious proportions to bring any real progress to a head. It would be wise for the industry to do what it can to address this before governments take a stab at it.

Read the full analysis by 451 Research analysts here.
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Around Christian Renaud in 10 Questions

On August 2nd, the IIAR asked some probing questions of Christian Renaud from 451 Research. Iowa based Christian (LinkedIn@xianrenaudis Research Director for IoT (Internet of Things). Check out the first half of the interview by Maria Ashton below!

  1. What are your coverage areas?
    Internet of Things
  2. What are your opinions of the IT Analysis Marketplace and where do you see it going?
    I think the market is speciating between smaller boutique shops and larger numbers shops with specialists in the middle, like 451
  3. What’s your typical day like?
    About 1/3 quiet contemplation, 1/3 briefings and meetings, and 1/3 complete chaos
  4. Now, c’mon, tell me an AR horror story?
    When an AR person takes it upon themselves to help rewrite a research report to make it into a marketing document for the firm. I know you said ‘story’ singular, but this is a recurring nightmare.
  5. How do you position your firm? What is your business model?
    We cover the business of technology innovation, in enterprises, consumer and carriers/operators. As you would expect, the primary customers for that analysis are enterprise adopters, carriers, vendors, and the financial community who invests in the innovation pipeline.
You can read the second half of this interview here. 
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Pokemon GO captures hearts, minds, cloud resources, and large numbers too

Analysts: Ian Hughes, Christian Renaud

July heralded the release of the augmented reality game Pokémon GO on IoS and Android. Regardless of opinion of the content or style of game play, it has become an overnight success, causing Nintendo's market value to increase dramatically; shares in July went from $15.5 to more than $33.30. It is free to play but generates revenue from in-app purchases. Originally announced in September 2015 as a joint development between Nintendo, The Pokémon Co and Niantic Labs (originally an internal startup at Google) to bring location-based gaming and mobile augmented reality to the mass market, it features a wearable bracelet that communicates with the phone and flashes and vibrates to game events. Its cloud-based interactions need to service millions of concurrent users and withstand the attention of focused hacking attacks. It highlights the use of augmented reality – albeit very light AR – on mobiles, creating social and legislative concerns.

Geo-caching and location-based gaming have lurked in the mobile space for years, including Niantic Labs' Ingress, but now it has a mega brand associated with it, and it has gone mainstream in weeks. Mass-market adoption, if only fleeting, will open the floodgates to this genre of digital business, just as Facebook and Twitter brought attention to social media, and Uber and Airbnb to digital-first disruption.

Read the full report: Augmented reality, not virtual reality, is the missing link in IoT user interfaces
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