gears

Analysis

Technology, media, and telecommunications M&A update: Q4 2021

With the advent of remote work and increasing mobile device adoption rate, a greater amount of data analytics technologies are beginning to live outside of the traditional data center/cloud environments and closer to physical assets. By shifting data and analytics to the edge, businesses can open opportunities for data teams to scale capabilities and enable real-time value to generate faster insights.

TMT trends

  • Cloud and infrastructure software/services
    Growing political fragmentation and industry compliance are driving the formation of regional and vertical cloud ecosystems and data services. Companies, especially those in highly regulated industries such as financials, are looking to reduce their reliance on critical lock-in and single points of failure when contracting with cloud providers. Therefore, regions able to provide secure ecosystems with limited political pressure may be better positioned to capture market interest and private investment in cloud infrastructure.1
  • Data analytics and business intelligence
    With the advent of remote work and increasing mobile device adoption rate, a greater amount of data analytics technologies are beginning to live outside of the traditional data center/cloud environments and closer to physical assets. By shifting data and analytics to the edge, businesses can open opportunities for data teams to scale capabilities and enable real-time value to generate faster insights.2
  • Horizontal and ERP software
    While employing a modern ERP is a main component in a company’s digital transformation, companies are beginning to integrate their business applications with other new technologies, including IoT and AI, to improve core processes. Moreover, many companies are seeking insights from new data sources, such as social media, to gain a deeper understanding of how their products/services are perceived in the market. When these new data sources are cross layered with sales and marketing data, there exists the potential to unearth additional sales and marketing opportunities related to the customer journey.3
  • Information technology security 
    Until recently, cybercriminals have acted with the knowledge that the understanding of their activities is weak due to the fast-changing nature of technology. However, regulators and lawmakers are starting to turn more attention toward ways to police malicious cyber activity by enacting rules and laws that will force greater oversight of companies’ security policies and processes. These rules and laws could take the shape of expansion of penalties that extend to address the vulnerabilities of companies’ security systems and exposure to potential damage. Further, there are an increasing number of jurisdictions passing laws to discourage payments in response to ransomware attacks. Naturally, CISOs can expect increased scrutiny and expectations, alongside an increase in support and resources to limit the impact of data thefts, losses, and breaches on customers.4
  • Technology-enabled services
    Due to the years of training and multidisciplinary skills required to become an IT professional, there exists a limited talent pool available to fill the large demand of open positions across the global economy, with talent shortages expected to persist into the near future. According to a recent study by Korn Ferry, the United States could forego $162 billion worth of revenues annually if more high-skilled technology workers aren’t hired. One of the largest beneficiaries of this talent trend stands to be technology-enabled services companies to help solve some of the largest technological challenges facing the economy.5

This newsletter is a periodic compilation of certain capital markets information. Information contained in this newsletter should not be construed as a recommendation to sell or a recommendation to buy any security. Any reference to or omission of any reference to any company in this newsletter shall not be construed as a recommendation to sell, buy, or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this newsletter. This newsletter is published solely for the general information of clients and friends of Deloitte Corporate Finance LLC. It does not take into account the particular investment objectives, financial situation, or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This newsletter is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known risks, uncertainties, and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this newsletter. We and our affiliates and related entities, partners, principals, directors, and employees, including persons involved in the preparation or issuance of this newsletter, may from time to time have “long” and “short” positions in, and buy or sell, the securities, or derivatives (including options) thereof, of companies mentioned herein. The companies mentioned in this newsletter may be: (i) investment banking clients of Deloitte Corporate Finance LLC; or (ii) clients of Deloitte Financial Advisory Services LLP and its related entities. The decision to include any company for mention or discussion in this newsletter is wholly unrelated to any audit or other services that Deloitte Corporate Finance LLC may provide or to any audit services or any services that any of its affiliates or related entities may provide to such company. No part of this newsletter may be copied or duplicated in any form by any means, or redistributed without the prior written consent of Deloitte Corporate Finance LLC.

References

1 Gartner, “Gartner says four trends are shaping the future of public cloud,” press release, August 2, 2021.
2 Kasey Panetta, “Gartner top 10 data and analytics trends for 2021,” Gartner, March 15, 2021.
3 David Luther, “8 ERP trends for 2021,” Oracle NetSuite, March 3, 2021.
4 Bernard Marr, “The five biggest cyber security trends in 2022,” Forbes, December 17, 2021.
5 Michael Franzino et al., “The $8.5 trillion talent shortage,” Korn Ferry, accessed December 31, 2021.

Fullwidth SCC. Do not delete! This box/component contains JavaScript that is needed on this page. This message will not be visible when page is activated.