“Follow the money” is a phrase many still associate with corruption scandals. But the same principle works for tech investments. If you want to know what’s really happening — and why — the money trail will lead you to answers.
The recent Consumer Electronics Show, for example, spotlighted big trends that are getting big funding and will create potentially big hiring. Analyst Tim Bajarin, who has attended the last 30 of these shows, says the key trends in 2014 are interconnected. They are:
- The Internet of Things, where common devices communicate with one another.
- Health and fitness, where connected devices monitor exercise and diet.
- The connected home, where today’s most commonly found connected devices are door locking and security mechanisms.
“This isn’t a fad, it’s the real one,” says Bajarin, who noted that startups are already creating new jobs in the space, if only a small number currently.
Google’s $3.2 billion purchase of Nest, the smart thermostat company, could open the venture capital floodgates as VCs place bets on who the next Nest will be, at least in terms of buyout value. Bajarin thinks only the shortsighted see this as merely a consumer electronics trend. “It’s the next generation of mobile,” he explains.
Among other things, connected devices – the Internet of Things – allow doctors (and potentially insurance companies) to monitor patients, energy companies to monitor power usage and security companies to better manage protected environments. On top of everything else, these applications have the potential to create a new range of Big Data opportunities.
Meanwhile, angel and venture investment is flowing away from social media – it’s so 2012 – and into broadly framed “next-generation mobile.” That includes services, apps and connected gizmos, but not wireless hardware itself.
“Wearables are in this year, the Internet of things is in,” according to Marco Graziano, whose company, Visible Energy, develops software, services and devices to create connected homes and businesses, particularly to save and manage energy.
“This is becoming a big area and should only get bigger,” says Graziano. “We are seeing more and more interest from investors and partners in what we are doing.”
Venture capitalist Bob Stearns, former CTO of Compaq Computer, believes cloud infrastructure and security are good investments, but the next technology play will be in robotics. “If companies like Apple, Google and HP don’t make big — meaning expensive — investments in robotics, they are going to be left behind,” he maintains.
Stearns predicts robots will become useful to both businesses and consumers, initially as special purpose devices like the Roomba vacuum cleaner, which he admits many people don’t take seriously. Over time, however, he predicts robots will become more useful, though the appearance of the human-like robot of the movies won’t be seen for some time.
Shorter-term, the Internet of Things will drive the search for smaller, more modular computing platforms with lower energy usage. Says Stearns: “Energy savings is a big deal.”
Likewise, he sees security needs rising for routers and other devices that don’t use traditional anti-malware software for protection. That, too, he says, should be a good area for investment.