Private Equity groups and institutional investors have long been attracted to the technology and software provider business model.

Technology & Software


Private equity groups and institutional investors have long been attracted to technology and software providers due to the fundamentals of the business model.

 

Several growth drivers also make technology investments attractive including:


  1. The need for all small businesses and emerging enterprises to outsource multiple business processes and functions to remain cost competitive and to gain access to capabilities/expertise/resources/tools otherwise unaffordable;

  2. Macro-business trends driving market dynamics such as the increased need for mobility, collaboration, risk management and governance requirements;

  3. Highly fragmented markets including: small business, industry specific mid-market solutions, and global;

  4. Economically efficient model driven by recurring revenues (long-term contracts, valuations, high switching costs);

  5. Operational performance driven by people performance, scalable customer acquisition and cost models;

  6. Increased dissatisfaction with service levels from Fortune 500 vendors presents small business and mid-market opportunities;

  7. Software industry exit valuations fluctuate, but remain attractive: SaaS valuations were 1X-10X TTM revenue;

  8. SaaS is hot! SaaS is currently a $21B market with growth outpacing traditional software (Gartner). IDC expects 83% of all companies to adopt SaaS.

Download our industry analysis on the SaaS marketplace.

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