Splunk: Could They Be the Google of The Internet of Things?
Earlier today I had a meeting with Francois Meunier of Morgan Stanley, who last week penned a 96-page paper on the Internet of Things, or “IoT,” as he calls it, along with several colleagues at Morgan in different areas of tech.Tiernan doesn't link to the paper itself so, via the VC's at McRock Capital:
Meunier was in town from the bank’s offices in London and was kind enough to spend some time walking through the report. I had inquired about posting a full copy of the report in PDF form. Although Meunier understands the interest of readers to get their hands on it, at this time Morgan Stanley has not approved any posting of the note, I’m sorry to say.
Perhaps the biggest takeaway is that although hardware is mentioned prominently as the initial beneficiary, Meunier thinks software may have the bigger payoff.
Which is a lot to say for someone like Meunier whose first passion is chip companies.
Meunier did, certainly, have things to say about chips: Freescale (FSL) is an important name with increasing IoT exposure. CSR PLC (CSR), the maker of wireless chips for bluetooth, should benefit from increasing connections inside the proliferating devices. The same is true of Silicon Labs (SLAB), though Morgan Stanley doesn’t formally cover that name.
In sensors, privately held Robert Bosche has about a third of the market for wireless chips of the “micro-electromechanical,” or MEMS, variety, roughly the same as for ST Microelectronics (STM).
But in the area of software, Meunier points out how profound a change the IoT may be, with General Electric (GE), of all companies, bulking up on application development.
GE has a software business related to Internet of Things, called “Predix,” which can be used for things like optimizing assets of companies in many different industries. Meunier flipped open the report to page 45, where Predix is described as a nearly $1 billion business:
To date, GE has launched 24 Predix products during 2012/13, of which 14 were announced at the October 2013 GE Minds & Machine show in Chicago. GE has said it hopes to double the rate of annual new product launches. At this show, GE announced that these products had received $400m of bookings that had converted into $290m of revenues. At that pace, it seems likely that sales could exceed a $1bn run-rate by the end of 2014.
It’s possible that, as odd as it may seem, that such old-world companies investing in software “may increasingly be viewed as software companies of a sort,” says Meunier.
But perhaps his greatest praise was left for Splunk (SPLK), the Big Data and analytics technology provider. Splunk’s wares have been used for things such as log analysis, for applications in computer security. But the applications are much bigger. “Splunk is great at sifting and analyzing large data sets of unstructured data,” he notes. As more and more devices get connected to the Net — wearables, wireless crop-monitoring systems, home infrastructure — there is a large role for Splunk’s software to play in analyzing and managing all those connections, he muses....MORE
April 3, 2014
Morgan Stanley Blue Paper
The ‘Internet of Things’ Is Now(96 page PDF)
Connecting the Real Economy
Previously on the IoT channel:
Companies That Will Benefit From The Internet of Things
Questions From MIT's 'Internet of Things Festival'
"Behind the 'Internet of Things' Is Android—and It's Everywhere" (GOOG)
"2013: The year of the Internet of Things"
"General Electric Pitches an Industrial Internet" (GE)
Former Joey Ramone Infatuant Maria Bartiromo Says Bad Things are Coming to the Market
The Internet of Things: Huggies App Sends You a Tweet Whenever Your Kid Pees...
Internet of Things: "GE teams up with AT&T and Intel to conquer the industrial internet. Here’s its plan"
The Internet of Things: Everything Is Hackable
