IoT – Technology made for Ireland
The Internet of Things is becoming more established in homes and businesses around the world, and Irish companies are at the forefront of this emerging technology – along with plenty of investment and acquisition opportunities.
The Internet of Things (IoT) is set to revolutionise how people live and work in the years to come. Part of what is known as the ‘fourth industrial revolution’, IoT relies on automation, connectivity, the application of data and machine learning to enhance productivity and increase efficiency.
And Irish businesses are at the forefront of the development of IoT technologies – big companies and start-ups alike – helping to drive global growth and demand for technology products and solutions.
What is Internet of Things?
In simple terms, IoT is physical objects that are connected with each other and can exchange data between them over the internet. The object – ‘things’ – are fitted with sensors and other technologies to be able to do this.
An example of IoT is the ‘smart home’ where common household devices and fixtures such as thermostats, light fittings and security cameras can be controlled remotely through a device such as a smartphone or a smart speaker.
Elsewhere, IoT applications are used in sectors such as medical and healthcare with remote blood pressure or heart rate monitoring. This can encompass everything from Fitbit wristbands to smart beds that detect the health of a patient.
Manufacturing is another sector that is increasingly adopting IoT technologies, using them to connect various devices to enable rapid manufacturing and automating certain processes. This includes elements such as predictive maintenance – where a fault is flagged up on a machine before it becomes noticeable to an operator – and can then be fixed with the minimum of downtime.
Worldwide, the spending on IoT technologies is growing exponentially and research company IDC has estimated that spending on the sector will reach $1.1 trillion by 2023, demonstrating the sector’s potential.
Irish IoT market
The IoT market has been growing at a healthy rate in Ireland. In April 2020, Vodafone reported there had been an 18% year-on-year increase in the adoption of IoT technologies by businesses in Ireland.Furthermore, adoption of IoT technologies is taking place in a range of sectors in Ireland, from healthcare to traditional manufacturing, Vodafone said recently [www.irishtimes.com/business/technology/iot-technologies-adoption-still-rising-in-ireland-1.4241097].
With Ireland’s position at the forefront of IT for some years, it’s no surprise that the country has become a leader in the development and adoption of IoT technologies. A typical example of this is German software giant SAP, which employs 1,700 people in Dublin and Galway. From these locations, the company carries out research and development into predictive analytics, a technology that uses data, historical evidence and machine learning to predict future or unknown events.
Along with Dublin and Galway, Cork is also a centre for IoT technologies in Ireland.The city is home to a historic cluster of IT businesses. Recently IoT research hubs such as the Nimbus Research Centre, based at the Cork Institute of Technology,have been looking at how IoT can transform industry and society.
The Nimbus Research Centre is one of several institutions around Ireland investing time and money into potential IoT applications. The CONFIRM Smart Manufacturing Research Centre, based in Limerick, and the Telecommunications Software & Systems Group at Waterford Institute of Technology, are also researching IoT technologies, among others.
In addition, IoT businesses have support from the government and government-backed bodies. For instance, in 2019, the Marine Institute, the national funding agency for the Irish marine research industry, awarded some €200,000 to XOcean, which uses IoT technology, robotics and unmanned vehicles to collect and monitor data at sea.
Irish IoT specialists are already proving to be attractive for buyers despite the recent global pandemic.For example, in October 2020, US company Akamai Technologies bought Dublin-based IoT specialistAsavie for an undisclosed sum [www.siliconrepublic.com/companies/asavie-akamai-acquisition].
Akamai, a company listed on the Nasdaq with revenues of more than $2.8 billion per annum, will now be pushingAsavie’splatform. This manages security, performance and access policies for internet-connected and mobile devices to its carrier partners to embed into their technology bundles.
Elsewhere, in late 2020, an all-Irish deal was completed when Clevernetacquired Connect2Fi for an undisclosed amount. Dublin-based Clevernet, which develops software and IoT solutions for energy use, purchased Connect2Fi, a provider of Wi-Fi services to the hospital and education sector, to have access to its portfolio of public sector clients.
The deal was a statement of intent by Clevernet, which was only launched earlier in 2020, as it looks to make buildings smarter through the deployment of IoT technology.
There is also no shortage of IoT-focused businesses in Ireland looking for investment, many of which are start-ups as well as larger businesses that incorporate IoT into wider technological activities.
In January 2020, Cubic Telecom, a Dublin-based supplier of connectivity management to businesses in the IoT and automotive industries, receivedfunding of €11.1 million from Irish Venture Capital firm Act Venture Capital.
The investment was earmarked to support Cubic Telecom’s continuing development of PACE, its software connectivity platform.
Act Venture Capital has been a long-term supporter of Cubic having been a seed investor in the company since 2013, backing the company’s rapid growth and expansion into 180 markets around the world.
Investing in Irish IoT companies
There are plenty of reasons to invest in Irish IoT companies. For instance, there is the technological infrastructure in the country. Ireland has been a leader in software development and associated sectors such as cyber security for many years. Consequently, the infrastructure already in the country is second to none –it has the 7th fastest broadband internet speed in the world.
With focus on IT and related sectors in Ireland, there is no shortage of qualified employees, and with Irish universities offering IoT courses there are newly qualified graduates entering the labour market every year.
In addition, Ireland is the only native English-speaking nation in the EU, following the UK’s departure. This makes it attractive for inward investors, especially from the UK, US and Canada. Perhaps more significantly, Ireland offers access to the single market and frictionless trade with the other 26 members of the bloc, which makes exporting to those countries much easier than for those outside of it. With IoT developing across the world, this is significant, not just within the EU but also with countries that the bloc has trade deals with.
There are plenty of start-up companies involved in the IoT sector in Ireland – more than 100, according to research company Tracxn – and many are looking for investment to fund their research and product rollout.
With the potential for growth in these companies, given the projections for the growth of IoT technologies around the world in the coming years, investments now could pay dividends in the future. Although, as with all emerging technologies, there is no guarantee of success for every business.
This is why, for those looking to set up an IoT-focused business in Ireland, invest in or acquire an existing company, it is crucial to get the right advice before signing up to any deal.
Those looking to invest or buy should seek out advisers with specialist knowledge of the sector in Ireland – including its history, leading players and local norms.
Malone & Co Accountants can assist on all the relevant aspects from setting up a company to providing diligence services as part of an M&A deal or funding round in the sector. We can also provide in-depth information to ensure any deal achieves the value hoped for at the outset. Remember, while Ireland may share a land border with the UK, the regulatory regimes can be quite different, which can trip up unwary investors.