One of the ending year's most interesting IoT news came toward the very end of it, with PTC announcing in the evening of the 30th that it would acquire ThingWorx for approx. US$112 million. That is a hefty price tag for an early-stage start-up that over the next 12 months is expected to bring in to PTC about $10m in new revenues. As such, it's a strong endorsement of, on one hand, the long-term potential of ThingWorx's technology and, on the other hand, the growth trajectory of the overall IoT space. The physical world is being connected at a dramatic speed, and that is creating massive opportunities for companies that can make themselves needed - or even critical - in the emerging value chain.
PTC enables manufacturers to manage their product and service lifecycles more effectively, so there is an obvious fit with an application enablement platform (AEP) such as ThingWorx, whose value proposition is to drastically speed up and simplify the creation of IoT applications. I attended today the investor call that PTC held on the news, and from the offered commentary it became clear that the firm is seeing a major convergence between the products and service lifecycles, as the connectivity of products allows the manufacturers to transform their existing customer relationships.
It's the very same trend that is pushing, for example, also Salesforce.com to assume a greater role in the IoT. The price of connectivity is starting to be so affordable that monitoring of products throughout their lifecycles, often driven by associated analytics, is becoming feasible in an ever-broader set of product segments. All this requires relevant applications, and the development of such applications solely in-house and from the scratch tends to be an expensive undertaking. That is the part that M2M/IoT AEPs are set to change. It will be interesting to see how ThingWorx, boosted by the new owner's financial clout and domain expertise, will impact the market in 2014.
Curiously, by the way, the PR about ThingWorx's Series C in October 2012 still referred to "M2M" five times in total, while the PR that PTC sent out about the acquisition doesn't mention the term at all. It refers only to the IoT. From the perspective of strategic marketing, this is quite interesting. It does beg the question whether other, arguably more traditional(ist) M2M vendors might also start getting their message through better - and to a more diverse group of stakeholders - if they actually stopped talking about M2M.
