Zebra to buy Motorola enterprise unit for $3.45B in hot pursuit of IoT market

Zebra Technologies(s zbra), an inventory tracking specialist that helps Amazon(s amzn) and other customers keep track of products, is buying Motorola Solutions enterprise business unit for a whopping $3.45 billion in cash and debt, the companies said Tuesday.
There seems to be a lot of, um, synergy here: Zebra makes bar-code and RFID printers and other gear used to track and account for inventory, while Motorola’s(s msi) technology collects and aggregates that data. “This creates the industry leader in identification and tracking assets. The two companies’ solutions have led in this space for years and people have long asked us why we didn’t merge. Now we have,” said Philip Gerskovich, Zebra’s SVP of New Growth Platforms told me this morning.
Together, and before that separately, the two companies competed with Honeywell(s hon), which also makes inventory ID and tracking gear and ancillary products. Honeywell has been bulking up as well, buying Intermec last year, among other acquisitions.
All this activity shows how important the internet of things (IoT) opportunity is to tech vendors. IoT refers to an explosion of connected sensors and other non-PC devices all feeding data to each other and to centralized locations. That scenario creates new opportunities for manufacturers, retailers and application developers who will arm the home, factories, even our personal apparel, with such devices and gather the resulting data.
The combined companies would generate annual sales of close to $3.5 billion and will field more than 20,000 channel partners in more than 100 countries, and an expanded pool of intellectual property including 4,500 U.S. and international patents.
Motorola Solutions will keep making and integrating  voice and data communication solutions for government and public safety customers, the companies said.
Gartner(s it) expects some 26 billion devices to be connected by 2020, generating $300 billion in revenue.To accommodate all that action, tech will need an overhaul, not only end-point devices but in edge locations and data centers that will aggregate and process that data. That will be a big topic at the Structure show in June.
Note: This story was updated at 9:02 a.m. PST to better reflect what products Zebra Technologies makes.