As keen watchers (i.e. analysts and consultants) of the IoT industry, we often wonder how good our industry radar really is – especially in the fast-moving world of IoT. So it’s gratifying when we get a data point that shows that yes, we really do have a serious depth of understanding when it comes to the dynamics of the IoT business.
A couple weeks ago I was talking with James Brehm, founder of James Brehm and Associates (JB&A), and my current employer, about Gemalto. Now, James and I are often (but not always) on the same page when it comes to industry dynamics, so it’s no surprise our discussion was quite animated – he on the “Gemalto is going to be bought, probably by Atos” side, and I representing the “no way, I don’t see it” side.
After our discussion James was so convinced of his side that he authored a research article prognosticating that Atos was going to buy Gemalto. Well, guess what? Today, the news that Atos offers to buy Gemalto for 4.3 billion euros to boost cyber security services hits. It’s gratifying to know that at JB&A as much as we watch and work in the industry, we really do understand not just where the industry has been, and where the industry currently is, but where it’s going.
Atos to buy Gemalto?
by James Brehm, James Brehm & Associates
Atos is a European IT services corporation focused on high tech, high volume, high value transactional services, unified communications, physical and logical security, cloud services, big data and analytics solutions and systems integration. With growth driven by a balanced approach; both organically through service delivery and through a measured acquisition process, ATOS may be circling the wagons to make an offer for an underperforming Gemalto. We believe Atos has been looking for a major acquisition opportunity since the beginning of the year, and to continue its current growth trajectory, buying an underperforming and feature rich company like Gemalto may be the right thing.
Gemalto believes its strength is in its SIM business, something Atos has struggled with for years. Acquiring one of the most well respected and largest SIM providers would vindicate the effort the Atos management team has spent trying to own that market.
If you talk with Gemalto, you’ll find Gemalto’s management team believes their main value proposition is trust. We believe Gemalto has built a nice solution for IoT, but it has not done enough in that space while investing in new technologies such as SensorLogic. An unnamed Gemalto board member shares this belief. IoT solutions could prove a critical differentiator for Atos.
Data from a recent James Brehm & Associates survey shows that two of the top three challenges for IoT growth are concerns around Security (65 percent of respondents) and a lack of talent (45 percent). Combining Gemalto and Atos assets builds a company that addresses those concerns and more.
While this is neither a thorough or painstaking analysis, it is our belief that the companies are well suited for each other. What’s more, combination of the two assets could create one of the most successful full-stack IoT solution providers globally.
Edited by
Ken Briodagh
