Technology innovation in America has long been a great asset for our country. Many businesses around the globe have taken advantage of the innovation and grown significantly over many decades.
The cycle we are in right now has a few implications for businesses that soon expect to invest in new solutions from technology companies.
1.) Mature scale solutions (Cloud, networking, and IT products) remain valuable to business, but new updates and upgrades this late in their cycle equates to lessening practical business value.
Asymptote = New value impact lessening and approaching zero.
2.) While this is going on, big technology companies have to extract as much revenue out of current solutions in order to show growth while continuing to pay for future innovative technologies.
Innovation will continue with new technology solutions beginning to emerge and are in the early stages of being able to add practical business value.
1.) Initiatives like Internet of Things, Artificial Intelligence, and Virtual Reality are rapidly advancing and finding their way to adding value to businesses. Value as measured by increased revenue or cost savings that materially have a positive impact on the business. Cap/Op Ex spending should be here.
2.) Some solutions will make it and some will not but the cycle of innovation will continue and the future is bright, which gives companies a great chance to continue growing with new technology solutions.
We are in another exciting technology cycle and American innovation continues. In working with a wide array of customers over decades, there is one consistent theme: Technology continues to evolve and practical solutions always win with customers determining the eventual outcome.
M&A Technology is well positioned to be part of this amazing opportunity.