January 29, 2016

3 Big Data M&A Predictions for 2016

Data is the new oil. That was the headline just a couple years ago. While the price of data has not experienced the same downward trajectory as oil as the product floods the market, a maturing of the big data market has changed the predictions and outlook for 2016. The big data market has pivoted from a focus around new features and shiny products, to mature offerings that deliver immediate business impact. We’ll join in the chorus of prognosticators and lay out Clearsight’s top big data predictions for spending and M&A this year:

The Rise of Artificial Intelligence – 2015 was a huge investment year for AI and 2016 looks to be even more so. AI is enabling much of the advanced analytics and analytics-driven applications in the big data sector. 2016 will see new technologies in the market from companies discovering new ways to apply AI versus building it and we’ll see smart machines augment and enhance human advanced analytics work to make them more productive.

Real-time – A hold over from our outlook last year, real-time technologies are still in high demand. American consumers have an insatiable appetite for information and we want it all yesterday. We will see more real-time streaming technologies that will deliver relevant, critical decision making data in near or real-time.

Internet of Things (“IoT”) – In our world, this is a catch all bucket for anything that we want connected to the internet – and all of those things collect data. That data all needs to be managed and turned into real value using new technologies from the edge to the core to do so. IoT has sparked unprecedented M&A activity, not only in terms of number of deals and spending (approximately $21 billion in M&A volume in 2015), but also the variety of buyers. From Google and Accenture to GE and Cargill – a wide variety of buyers are searching for unique IoT technologies and solutions. Big winners will be those companies who can create databases optimized for different types of IoT data or who build tools that are less operationally complex for managing different types of data.

M&A – Over the past 2 years, VC investment in Big Data has increased each year in both deal numbers and values – specifically, 1,054 VC investors participated in 1,221 Big Data deals. While we expect to see the investment trajectory continue, many investors will start to look for big exits this year. With strong consumer and investor demand, we also expect to see a couple strong IPOs this year. Beyond the sectors noted above, the consulting businesses that help create the strategies, roadmaps, on-going managed services support, and those that solve real analytical problems will be the big winners in 2016