Technology, media, and telecommunications M&A update: Q1 2018
As the internet of things (IoT) continues to become an integral part of professional and personal business, 5G technologies and artificial intelligence (AI) will be able to run faster and be implemented quicker than before. Automotive technology has also benefited from IoT and AI, contributing to increased growth and focus in the industry. This technology, media, and telecommunications (TMT) mergers and acquisitions (M&A) update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the TMT industry.
- 5G and the internet of things (IoT)1: 5G technology promises to bring reliability, latency, scalability, security, and ubiquitous mobility, making it a key component of the communications and connectively layer of the IoT technology stack. By 2021, 5G’s enablement of IoT use cases is expected to drive 70 percent of Forbes G2000 companies to spend $1.2B on connectivity solutions.
- Financial technologies (Fintech)2: Financial applications are growing in sophistication and software as a service adoption is accelerating. Gartner estimates that by 2020, 20 percent of non-value added tasks within the office of finance will be automated as cloud-based finance systems leverage AI capabilities that were not possible
on premisedue to data and processing limitations.
- Automotive technology3: The increased focus on making vehicles more connected, automated, and driverless has transformed vehicles from independent, closed systems to connected ecosystems, creating new security vulnerabilities. Frost & Sullivan research shows that the automotive industry’s spend on cybersecurity is expected to grow at a 24.4 percent compound annual growth rate from 2015–2025 to combat these ever-increasing cyber risks.
- Artificial intelligence (AI)4: The proliferation of AI technologies is allowing organizations to automate and scale with hyper-efficiency. Next-generation AI systems will require significant investment in integrated systems with rich data streams, software, and closed-loop self-training model management services, providing a significant opportunity for providers of such technology.
This newsletter is a periodic compilation of certain capital markets information.
1 “5G and IoT in 2018 and beyond: the mobile broadband future of IoT,” I Scoop. November 1, 2017.
2 “Predicts 2018: SaaS financial management applications increase integration, automation and sophistication,” Gartner Research. November 1, 2017.
3 “Cybersecurity and the automotive industry,” Frost & Sullivan. June 2017.
4 “The top technology trends to watch: 2018–2020,” Forrester Research. October 23, 2017.