Why Amazon Is Hoovering Up IoT Startups

The potential of the IoT makes it an important battleground

8Mar

Of all the burgeoning technology set to make an impact in the coming years, the IoT is one that particularly captures the imagination. Its practical applications will revolutionize everything from city planning to the supply chain, and the notion of an entirely connected home is something that has been in popular culture in some form or another for decades. A fridge that orders food itself, lightbulbs that sense your movements and light the house accordingly, heating you can configure to turn on when you’re nearing home after work – the IoT has practical applications that almost everyone could envisage making an impact on their lives, no matter how minor.

One area already taking shape is home security. The ubiquity of smartphones makes remotely connecting users to their homes easy, and products are developing to solve problems like home security, or simply what to do if someone visits when the property is empty. The solution is smart doorbells, fitted with cameras and the ability to connect directly to a user’s smartphone. They’ll allow you to see in ultra HD video exactly who is at your door and communicate both ways in real time. A number of companies are looking to stake their claim as leaders in what will doubtless be a popular piece of hardware. Among countless others, connected home pioneers, Nest, are set to release a smart doorbell, and home security company Ring have built their entire business around the tech. Founded in 2012, Ring has released a number of variants on the smart doorbell, home security camera (connected, of course), and various accessories to power the devices and increase their range.

Ring’s development has clearly piqued the interest of Amazon, and the e-commerce behemoth has acquired the startup for a fee in excess of $1 billion, according to Reuters. Crunchbase reports that Ring has raised around $209 million to date, and under Amazon’s considerable wing it is impossible to imagine the company doing anything other than going from strength to strength. The acquisition comes just a couple of months are Amazon acquired Blink, and Ring competitor offering a very similar product, and the retail is clearly staging a hostile takeover of an industry with seemingly limitless potential. The smart home market alone is projected to be worth $53.45 billion worldwide by 2022 according to Statista, so expect all major tech giants to muscle in for a slice of the pie.

Ring's hardware extends to security cameras, floodlights, and more.

For Amazon in particular, the acquisitions make sense. Clearly looking to capitalize on its overwhelming success thus far in the connected home space, with Alexa, Amazon now has the hardware to compete with Alphabet-owned Nest on the smart doorbell battlefield. With Ring, Amazon has acquired a company that is clearly capable of putting together great hardware, something that isn’t easy for even the biggest companies, and the startup comes complete with a host of patents on everything from its battery pack to its alarm keypad. Amazon also couldn’t risk other key players getting their hands on the company, and it’s difficult to imagine that it was the only bidder.

The acquisition is also part of a far wider delve into the IoT from Amazon. In 2015, it launched AWS IoT, a platform for building, analyzing, and generally managing IoT devices. TechCrunch described the platform as ‘a place where the many different stands of creating services for disparate connected objects can come together into one place to be run in a cohesive way.’ If it can conquer the hardware market whilst creating platforms for the facilitation of that hardware, Amazon can establish itself as a key figure in the nascent field.

The Ring acquisition is not Amazon’s first in the IoT space, nor will it be its last. Just about every major tech giant you can think of is throwing its hat into the ring to be part of the connected revolution in home technology (as well as the more industrial business uses for the IoT), and the potential size of the market makes it an important battleground. IoT hardware startups must be working with acquisition very much in mind, waiting for a major player to swoop and propel them to the next level. Keep an eye on it, it’s going to be a free-for-all. 


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