Innovation in the Enterprise is Coming from the Big Corp Labs not Only from Garages

Las week during its IO conference, Google made a series of announcements that signal to the market that it intends to be a contender in new markets such as artificial intelligence, digital assistants, IOT, etc. From that perspective, Google continues an aggressive competition with technology giants Microsoft, Amazon, IBM, Salesforce or Facebook trying to become the dominant force in new technology areas.

This picture was unconceivable a decade ago in which the technology market was dominated by incumbents that were too slow to innovate and compete with smaller startups. Today that small group of companies is driving a lot of the innovation and entering first into new technology markets such as virtual reality, cognitive science, cloud computing, IOT platforms, etc. From that perspective, the corporate innovation labs of those companies are doing a phenomenal job keeping up and competing with the startup ecosystem. The following chart might help to illustrate this picture:

Innovating In-House, Accelerating via M&A

Contrary to the traditional mantra of enterprise software innovation, the incumbents have been able to enter these markets with in-house innovations rather than via pure M&A. Even though the aforementioned areas have been very active from the M&A perspective, the acquisitions have focused to expand and accelerate existing platforms. Let’s look at a few examples:

· After launching IBM Watson, IBM acquired Alchemy to accelerate the capabilities of the IBM Watson platform. Today’s Alchemy is part of the Watson Developer Cloud.

· After releasing AWS Kinesis, Amazon acquired IOT startup 2lemetry to expand its IOT offerings. Today, 2lemetry is part of the AWS IOT Hub. Facebook acquires

· After announcing its efforts around the Facebook Messenger platform and the M digital assistant, Facebook acquired to expand its efforts in the area of artificial intelligence.

CEO of IntoTheBlock, Chief Scientist at Invector Labs, I write The Sequence Newsletter, Guest lecturer at Columbia University, Angel Investor, Author, Speaker.

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