Nokia announced today that it acquired SpaceTime Insight, a startup based in San Mateo, California, that provides predictive analytics based on machine learning algorithms. A top Nokia executive explained that the move helps push Nokia further into the more valuable applications and services space in the IoT industry.
“It’s no surprise that Nokia has been looking at IoT, particularly from a connectivity standpoint. … Connectivity is a requirement of the IoT ecosystem,” explained Josh Aroner, VP of marketing in Nokia’s software business. “However, as a company, we’ve been looking at the IoT space for some time, and certainly have approached it as, 'How do we move farther up the value chain?' We have our own IoT platform to build applications on. But the more we've been going through this, the realization is that the value is at the application level, in terms of where the money is and in terms of where the end customer is looking to say, 'hey, how do I make use of the IoT?'”
And that, Aroner said, is the motivation behind Nokia’s purchase of SpaceTime—a move he indicated would likely grow in importance considering that 5G continues to be a main focus for Nokia and “5G and IoT encompass one another.”
Importantly, Aroner said that SpaceTime’s CEO Rob Schilling join Nokia as the chief of the company’s IoT product unit. That unit sits within the Nokia Software business group, headed by Bhaskar Gorti. As TechCrunch noted, Nokia’s Software business today is a $1.9 billion operation, and the company’s IoT sales are just a part of that. But Nokia’s SpaceTime acquisition indicated the company’s plans to expand and enhance those efforts.
Of course, Nokia has been working in the IoT sector for some time. The company’s IoT operation stems from its device-management and network-security operations, which helped to form the basis of the worldwide IoT network grid (WING) service that Nokia launched early last year. Nokia’s WING essentially positions Nokia as a global MVNO for the IoT because the company purchases wireless services through the wholesale departments at wireless carriers to offer the IoT connectivity through WING.
On top of WING Nokia also offers its IMPACT IoT platform, which allows service providers and enterprises to build IoT applications. Now, Aroner explained, SpaceTime’s expertise in building IoT applications, as well as its impressive customer list, will be added to Nokia’s WING and IMPACT efforts and consolidated under Schilling’s leadership.
“SpaceTime really helps us move up the IoT into the application layer and into a few industries in which—they're not new to Nokia, we've been selling networks into energy and utilities and some large enterprise for quite some time, but it certainly helps us offer some vertical-specific applications,” he said. “And it certainly brings us a set of expertise in creating applications for these verticals moving forward.”
As TechCrunch noted, SpaceTime had raised between $50 million and $65 million in funding and was valued at $103 million in 2016. It counts Entergy, FedEx, NextEra Energy and Singapore Power as customers.
Nokia’s purchase of SpaceTime comes just days after the company announced it would exit the digital health space by selling its Withings operation back to co-founder Éric Carreel.