Redeploying cash for growth in tech | Deloitte US | Technology industry

Analysis

Redeploying cash to drive growth in technology companies

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Many technology companies today have built up excess cash reserves and stepped up their cash coffers at an unprecedented rate. The choice of where to deploy cash presents a unique opportunity and challenge to the tech sector. While other industries are constrained by market structure, competitive intensity, commodity prices, or global capacity, technology is an inherent growth industry with a surfeit of investment opportunities for redeploying cash.​

Where lie the opportunities?

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​​For technology companies that consider investing in organic, inorganic, or capitalization levers, we present a novel framework that captures three primary business criteria to help prioritize investments to maximize topline revenue growth—strategic, operational, and tax/financial.​ Macroeconomic forces and revenue expectations make a ‘cash-rich’ but ‘growth-poor’ strategy unsustainable. It is time for technology companies to return to growth. The next wave of technology innovation, value creation, and step change in shareholder value depend on it.

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