by Brenon Daly
A decade and a half since the term ‘machine learning’ first appeared as the rationale for an acquisition in 451 Research‘s M&A KnowledgeBase, the must-have technology has become the single-biggest driver for tech deals in the IT market. Technology companies – looking to make their offerings more efficient, more predictive or more secure – have snapped up hundreds of ML startups. And the pace of deals has only accelerated.
The M&A KnowledgeBase shows 2019 is tracking to nearly 300 ML-themed acquisitions. That’s almost double last year’s total and a full tenfold increase from the number of ML transactions just a half-decade ago. This year’s diverse set of acquirers of the technology shows the near-universal appeal. Buyers include mainstay tech vendors looking to make their products smarter (Oracle, Microsoft) as well as non-tech companies looking to get additional value from all of the data flowing from their existing products (McDonald’s, Mastercard).
To learn more about machine learning’s impact on corporate strategy and product development, 451 Research will be hosting a special Cycle of Innovation Summit in Menlo Park, California, tomorrow morning. (There are still a few seats available. 451 Research clients can register for the ML-focused Summit, which runs Tuesday, November 12 from 8:00-11:00am PST, on the event‘s website.) During the special event, we will be looking at the full ML market, including perspectives on how businesses are building value through ML offerings and how startups are realizing value via ML exits. Among the trends we will be highlighting:
For all of its buzz in IT, ML is still more of a concept than a product at the majority of vendors. Just one in five tech buyers and users said their company has ML up and running, according to a survey from 451 Research’s Voice of the Enterprise (VotE): AI & Machine Learning. Yet more alluringly, the same number of respondents (20%) said their company is currently developing an ML deployment.
To get started in ML, a plurality of customers told us they are looking to existing tech providers to bake in smarts to their products. Nearly four in 10 respondents (38%) said they are running ‘ML-enhanced applications,’ which was the top-rated source for the tech in our VotE survey. That drive is the primary reason our data shows M&A activity in the sector is running at an all-time high.