A recent report published by accountancy firm Deloitte – entitled “2018 Technology Industry Outlook” – has reviewed several of the ways that technology firms are planning for growth, with mergers and acquisitions (M&A) strategies at its heart.
It both takes pointers from within the technology industry, where market disruptors and lightning-quick research and development time mean changes can be quick, and alerts business owners to learning points that they may not have considered.
App opportunities
The report outlines the industry trends that will, it says, drive growth in tech companies in 2018.
These centre around cloud computing – where computer programs are moved to remote, maintained servers – and the advent of “flexible consumption”, which sees products moving to a “pay as you go” model, particularly for cloud services. It also mentions cognitive computing, more user-friendly tools and the emergence of better data manipulation techniques as important drivers.
However, of more interest to non-tech companies are the strategies that they are employing to achieve growth.
Buy, build or partner
Though a familiar concept to senior tech executives is “buy or build”, the addition of “partner” is an important distinction. Collaboration is a powerful way to build value and, by pooling resources for mutual gain, competitors can even co-operate in areas where they do not directly compete.
A modern need for comprehensive solutions, says Deloitte, means that firms are increasingly specialising in what they offer – and finding partners to help round out their offering.
Growing strong
Deloitte describes the acquisitions process as “a fast track to fending off competitors from both inside and outside one’s industry”, and says that the need for seeking investments or merger opportunities is increasingly part of the corporate landscape today. When companies cannot scale up enough, they also can spinoff into new areas to gain a competitive edge.
Another time to consider such a move for any company is “when they need to enter a high-growth market or to obtain scarce and strategically important talent,” the report’s authors write.
Being mindful
Two further tech-specific issues that businesses in any sector can take notice of are the changing role of cybersecurity and the evolving regulatory environment.
We have all read about various cyber-attacks in the past year or so – such as the NoPetya or WannaCry ransoms – and, with the cloud and mobile devices becoming more integral to companies of all sizes and industries, security is a more pressing issue.
What’s more, the added pressure of the General Data Protection Regulation (GDPR) has forced companies who did not consider security matters to suddenly take ownership of them. Even the data on your mailing list needs to be protected from outside attackers.
With these in mind, Deloitte also dived into the things that businesses should keep in mind as they plan for growth. The most successful ventures are those than have the ability to “see around corners” – so get those crystal balls out – not only when it comes to regulatory matters, but also in getting an early read on potential industry disruptors.
The report’s authors write: “Increasingly, this will involve looking beyond one’s own industry – the most dangerous disrupters often lurk in industries far different from those they could eventually impact”.
