06 Jan 2023 /

By Ethan Hall

The use of sensors dates back to ancient times, when people measured numerous physical events using straightforward instruments like thermometers, barometers, and compasses. The invention of electrical sensors in the 19th and early 20th centuries, like the photoelectric cell and the thermocouple, made it possible to build more complex devices that could measure a greater variety of phenomena. Smart sensors, which can process data, transfer it, and communicate with other devices, were developed as a result of the introduction of the microprocessor in the 1970s. Today, sensors are employed in a wide range of industries, from manufacturing and healthcare to consumer electronics and cars.

The advancement of sensor technologies and the expanding availability of sensors are propelling the expansion of the Internet of Things (IoT). The number of devices worldwide that are connected to each other to collect and analyse data and autonomously perform tasks is forecasted to approximately triple from 9.8 billion in 2020 to over 29.4 billion by 2030.

IoT Data Analytics
Sensors generate vast amounts of data in real-time, so it can be challenging to analyse this data. Big data analytics provides a mechanism to routinely monitor these data sets while also providing insight into anomalous events. So, it is important that organisations have the right analytics tools in place in order to manage and make sense of the data which sensors generate. The process of sensor data analytics typically involves four main steps: data collection, data cleaning, data analysis, and data visualisation. These steps are typically performed using specialised software tools designed for sensor data analytics, such as data mining and business intelligence platforms.IoT Data Value Chain

Analytics Software
A number of large tech companies such as Microsoft, Amazon, and IBM offer platforms for analytics of sensor data. The analytics software is used to process the data which has been generated from sensors and other IoT devices and then extract valuable insights from it. Some examples of the types of insights that can be obtained from IoT devices include: real-time monitoring of device performance and usage; predictive maintenance of equipment; improved energy efficiency; enhanced customer experiences; improved supply chain and logistics management; better inventory management.

The Growth of the Sensors and Analytics Markets

The use of sensors in data analytics is a growing market, with the sensor data analytics predicted to grow at a CAGR of 14.35% from 2022 to 2028, from $13.1 billion to $29.3 billion. Compared to the overall market for sensors, the sensor data analytics market is quite small, although it is growing at a faster rate.

One of the main trends is the increasing use of sensors in the Internet of Things (IoT), as more and more devices and systems are connected to the internet and can collect and transmit data. This is expected to drive the development of new sensors and sensor technologies, as well as new applications and business models that leverage the capabilities of the IoT.

Another trend is the miniaturisation of sensors, as advances in materials and manufacturing technologies enable the creation of smaller and more sophisticated sensors. This is expected to enable the integration of sensors into a wider range of products and applications, including wearable and portable devices, as well as the deployment of sensors in new environments, such as underwater or in space.

Additionally, there is a growing focus on the ethical and privacy implications of sensor technology, as concerns over the collection and use of personal data continue to rise. This is expected to drive the development of new technologies and regulations that address these concerns and protect the rights of individuals.

Competitive Landscape and Market Map
The sensor data analytics market is extremely fragmented. There are many different types of sensors which are used, and different companies will produce different types of sensors. Companies range in size from relatively small, specialised sensor producers such as XY Sense, to large technology companies such as Microsoft. The market map below shows some of the companies which are involved in the market.

IoT Market Map

M&A Spotlight
Although lower than the highs witnessed in 2020 and 2021, M&A transactions within IoT have been relatively stable in 2022, with around 40 deals being completed in each of the last five quarters, although average deal values have declined.

IoT MA Chart

Notable recent deals include:

  • May 2022: Spectris Plc’s acquisition of Dytran Instruments, valuing the business at 15.8x EBITDA.
  • January 2022: Marston Holding’s acquisition of Vortex IoT Limited, a supplier of environmental sensors, networks and data solutions that support improved air quality and decarbonisation initiatives.
  • January 2021: Verizon’s acquisition of Senion, developer of an indoor positioning platform which delivers sub-meter accuracy for precise positioning and navigation of indoor spaces.

In brief, sensors can be used to improve the performance of both industrial products and consumer goods. With the development of the Internet of Things and Big Data Analytics, the use of sensors will continue to be of paramount importance. While the proliferation of sensors in connected devices comes with concerns, most notably privacy concerns, one would suggest strong government regulation is required in order to protect individual privacy.


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