Welcome to the 2019 full year edition of The Global Technology Market Review – Results International’s quarterly review of deal activity and valuation metrics for the technology sector. We cover all aspects of technology with a focus on enterprise software/SaaS, software-related IT services, and tech enabled services. Each quarter we consider the macroeconomic trends and analyse the activity in the M&A, fundraising and public markets across: enterprise software, technology services, cybersecurity, marketing and eCommerce technologies and healthtech. We are extremely positive about the growth of the technology sector in 2020 and this is reflected in our predictions.
Review of 2019:
- Widespread digital transformation continued across all aspects of the enterprise, driving strong M&A activity and valuations as both existing players and new entrants fill missing capabilities and compete to capture as much of clients’ digital transformation budget as possible.
- Results International had a busy year, advising on 11 software and digital services transactions in 2019, reflecting a number of key trends in 2019:
- Cybersecurity saw significant market consolidation, including a number of multi-billion-dollar acquisitions such as VMware’s acquisition of Carbon Black and Broadcom acquiring Symantec’s enterprise security assets. Results International advised on two security transactions in 2019; Outpost24 on its acquisition of Pwnie Express and Intragen on its investment from FPE Capital.
- Large strategic software vendors have been notably less acquisitive in 2019 as they sought to embed capabilities acquired during a highly active 2018. Salesforce’s acquisition of Tableau being the standout transaction in the enterprise software space in 2019.
- Buyers from across the technology services spectrum and private equity investors competed aggressively for assets in the space, maintaining upwards pressure on both public trading and transaction multiples. Interest in new technologies (AI, machine learning and intelligent automation, among others) has remained strong increasing competition among these buyers.
- Marketing clients continue to seek out more agile and technology-driven services, including data capabilities, underpinning continuing acquisitive appetite amongst agencies. Results International advised data-marketing agency Planning-inc. on its acquisition by Next15, and Redder Asia on its acquisition by Dentsu Aegis Network.
Predictions for 2020:
- Nimble listed and private equity-backed groups will continue to gain ground and make key acquisitions in the technology services sector by offering founders flexible deal structures and an attractive proposition. In January 2020, Results advised Sapphire Systems, an ERP specialist consultancy, on their significant investment from Horizon Capital.
- Nascent technologies will continue to drive M&A growth in interesting new areas. Intelligent Automation (IA) continues to increase in focus as consultancies compete for scaled service providers with automation capabilities. A host of well-funded, hyper-growth automation software companies (led by UiPath, Blue Prism and Automation Anywhere) are disrupting the global services market, thereby creating huge demand for skilled implementation partners. Similarly, the next wave of IoT and connected technologies driven by 5G is driving industry innovation.
We hope you enjoy the Global Technology Market Review 2019, please do get in touch if you would like to discuss any of the themes with us. We look forward to speaking with you soon.