Vertical Integration versus Collaboration Models in IoT Markets
Vertical integration can be defined as one company or vendor owning and controlling assets across the entire, or at least a large part of, the value chain, including connectivity, hardware, software, analytics, and other capabilities in a specific market or industry, hereby establishing a dominant position by tightly controlling and owning the customer experience.
Many large technology suppliers, from semiconductor vendors to carriers, network infrastructure providers, and Original Equipment Manufacturers (OEMs), are considering climbing up (or down) the value chain to control a larger portion of the Internet of Things (IoT) revenue opportunity, which is increasingly moving toward analytics, security, and end market services. This is informed by saturating growth and decreasing margins on commoditizing connectivity services and hardware components. One possible strategy to accomplish this is to acquire companies and assets across the entire value chain, offering end-to-end solutions and services while at the same time locking i…
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