PwC: Cloud and mobile technology will be focus of 2013
Technology companies always need to ensure that they are prepared for the possibility of an acquisition. According to PricewaterhouseCoopers (PwC), the rush to cloud technology and the quickly evolving software market, in particular, will put competitive pressure on IT companies to make acquisitions.
A PwC report outlined the technology mergers and acquisitions market, saying that even though an uncertain economic client put a damper on opportunities in 2012, there is still a positive outlook for M&A activity.
"The pressure of disruptive innovation has technology companies constantly seeking the next competitive differentiator, which requires investing in new talent, new technologies, R&D and M&A as a means to all three," Rob Fisher, PwC's U.S. technology deals leader, wrote in the report.
Along with cloud technology and evolving software, the report said that with many tech companies being cash rich, they often have the means to acquire if necessary. For example, the top 25 U.S. tech companies had a total of $330 billion in cash by the end of 2012. With this in mind, it is well-advised for smaller startups to ensure they conduct comprehensive company valuation methods. That way, owners are prepared for possible opportunities.
The main focus for 2013 will center around cloud-oriented and mobile technology, analytics and social-network-enabling software, PwC said. Software will likely remain the largest category of global IT purchases this year, at $542 billion. This is a 4.4 percent increase in dollar terms from 2012, according to Forrester Research.
Fisher explained in an email to IDG News Service that economic uncertainty will not completely disappear for a while, which is why tech companies need to remain diligent in creating an acquisition strategy. Deals will be harder to value and entrepreneurs must keep a firm grasp on their companies to try and find the best opportunities.