The more things change, the more tech stays the same
technology M&A transactions are still completing
Whilst there is no doubt that since the outbreak of COVID-19 the world has changed; technology M&A transactions are still completing. Against a backdrop of uncertain macroeconomic factors, acquirers continue to believe technology is a robust sector and will weather the storm, a view reflected in the conversations we are having with our clients and investors.
We expect the current crisis to lead to the acceleration of already existing key technology trends, which should favour TMT businesses as they navigate the coming months. After all, technology has enabled most businesses to find new ways of working and we expect to see permanent changes in corporate behaviour that will help support demand.
Collaboration tools like Asana, Slack, Teams or Zoom have become commonplace.
The transition to cloud solutions for delivering digital business applications was already mainstream, but it is now critical for effective homeworking. Collaboration tools like Asana, Slack, Teams or Zoom have become commonplace. Whilst there will be some obvious winners like Zoom whose share price has risen by 74% to $121.93 in three months, the flexibility of cloud deployment and paying on a subscription per user basis will serve the sector well, evidenced by the SaaS emerging cloud stocks still significantly outperforming US markets.
With companies successfully adapting to remote working, we expect many will continue to offer this flexibility to their employees whether driven by the companies themselves or their employees. As households demand internet usage 24/7, technology outsourcing and infrastructure providers will be critical to meet future demand.
all traffic is equal, but some is more equal
Networks have become strained under work and leisure activities like video conferencing and gaming running simultaneously. Whilst we haven’t seen it yet, it wouldn’t be a surprise to eventually see networks prioritising traffic. Paraphrasing Orwell “all traffic is equal, but some is more equal.”
Whilst businesses may have pressed pause on large consulting and integration projects in the very short term, digital transformation journeys will continue. For sectors facing unprecedented challenges, automation offers cost reductions whilst providing a scalable solution for meeting demand and propelling growth. Technology will be a critical enabler for businesses who look for solutions to become more resilient to future economic shocks, whilst innovative corporates will continue to use technology as a key differentiator.
Online as a channel
searches for key words like digital learning growing over 120%
Google search trends have changed. With searches for key words like digital learning growing over 120%, the internet has offered answers to new users and dilemmas. Whilst e-learning businesses are obviously capitalising, we expect many industries which have typically lagged in online adoption to accelerate their move to digital. As many consumers, businesses and governments realise that in person contact is not critical, a move to e-commerce and digital self-service will need to be delivered by a new technology ecosystem.