Monday, 10 February 2014

Bosch Software Innovations’ M2M/IoT Application Platform. Good? Yes. And perhaps, just perhaps, it’s worth USD1.4bn.

Last week Machina Research spent a couple of interesting days in the company of Bosch Software Innovations, plus selected partners, at Bosch Connected World (BCW) in Berlin.

Bosch Software Innovations has spotted the niche in the platforms market that we refer to as ‘M2M/IoT Application Platforms’, and they hosted BCW to tell everyone about it. A quick re-cap: right now, most platforms (and most participants) in the M2M space are essentially vertically focussed. The telecoms industry, in particular, has spent much of the last few years trying to create vertically integrated behemoths to slug it out for market share. Into this arena steps the IoT-enabling M2M/IoT Application Platform, whose raison d’être is to offer a horizontal application development environment by abstracting across the jungle of vertical solution providers that there is out there. I first wrote on the topic of cross-operator, horizontally focussed, Service Enablement platforms back in 2011. These entities were very much a theoretical construct back then, of course, but now they are becoming a reality in the form of M2M/IoT Application Platforms. If you’re interested to find out more on M2M/IoT Application Platforms, check out this White Paper.

The demonstrations at BCW and the overall theme of BCW reminded somewhat of the approach that ThingWorx takes. The aim is to make the application developer king, of course underpinned by the kong of an open environment and standards (thank you @caro_buck, although I would assert that many of those ‘standards’ will be de-facto, at least in the early years). The application programming environment should be drag-and-drop simple and flexible across a range of verticals and applications. 

Bosch is doing much the same but, betraying Robert Bosch’s Swabian roots, the typical implementation leans more towards a centrally managed on-site deployment rather than a more fashionable cloud deployment. However, I’d assume that the balance will shift as Bosch S.I. seeks to address the smaller scale opportunities that it will need to support in order to be successful in this space.

On the flight back home, and with ThingWorx in mind, I took out my slide rule. I met Russ Fadel (CEO, ThingWorx) in early December 2013 at the ThinkMonk event in Shoreditch, London. There was a power cut, and we met in a room that was really quite dark, and got progressively colder as the meeting progressed. At that time ThingWorx comprised around 50 people, and was looking to expand substantially over the course of 2014. Of course, this envisaged organic growth never happened since ThingWorx was acquired by PTC for USD112m in late December 2013. That kind of money pays a lot of electricity bills. Applying a crude ratio of an implied value of USD2.25m per employee to Bosch Software Innovations “more than 600” employees (let’s call it 625) results in an implied valuation of USD1.4bn. Crazy? Probably. And I’m sure that there’s more to valuation than that, and I’d never recommend buying any stocks on my say-so, but Bosch S.I. does seem to have a significant presence in a fairly interesting niche.

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