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Redeploying cash to drive growth in technology companies
Making your money work for you
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?
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.