“IoT Will Drive the Market for the Next 50 Years” – Nest Investor Intertrust’s CEO (Nikkei Big Data interview article translation*)
Google acquired Nest Labs for $3.2 billion (approximately 320 billion yen). Nest Labs has been receiving attention in the IoT (Internet of Things) area. According to US media, Intertrust Technologies is one of the companies who had their eye on Nest’s technologies and invested in the company in 2011. We talked with Talal Shamoon, the CEO of Intertrust about IoT. Intertrust has a venture capital department and also provides DRM and security software technologies.
Nikkei: What is your view of the IoT market?
TS: I believe that the computing market is fundamentally shifting towards IoT. Computing used to just handle a limited number of devices. However, with IoT there is the potential to increase that number to trillions of sensors.
In IoT, a tremendous amount of data is produced, and new value is created through the analysis and usage of this data. This has the potential to create a similar market as when the computer appeared, and drive the market for next 50 years.
Nikkei: What drew your attention to invest in Nest?
TS: I thought that Nest was a company with a very smart business model. By using thermostats and smoke detectors placed in the home as hubs, and connecting them with automobiles, home appliances, and other devices, their strategy was to capture data generated on a continuous basis.
Design is also important. Much like TVs, thermostats and smoke detectors are household furnishings, and Nest has an excellent strategy to design them as attractive products.
Nikkei: What is the challenge for growth in IoT?
TS: It is necessary to understand and utilize huge amounts of collected data, which can’t be done using existing computer science. In this context, the IoT market overlaps with the big data market.
In order to solve this challenge, we’re also focusing on software companies. For example, we’ve also invested in a company called Planet OS which handles sensor data. Planet OS aggregates and analyzes environmental sensor and other data and enables the understanding of what is happening now.
Nikkei: How do you see investments in IoT in Silicon Valley as a whole? Also, what do you see at the role of Japanese companies in IoT?
TS: Personally, I believe that the IoT field is undervalued when considering the potential capacity of the market. Rather than data storage, we’re focusing on companies which have technology to efficiently manage and cooperatively connect large amounts of data. Maintaining security is also becoming important, so this is a very good business opportunity for our company.
Japanese electric component manufacturers have a lot of small, light, and high-performance sensors along with embedded device technologies. Given this background, I anticipate there is the possibility for growth in the IoT market in Japan.
*The original article is in Japanese and was published by Nikkei Big Data on August 18, 2014 (http://business.nikkeibp.co.jp/article/bigdata/20140811/269891/)