During the year, the market witnessed the public offerings of Groupon, Zynga, LinkedIn, Pandora, and other tech-focused businesses.
Positive spending growth,
large cash balances and a predisposition toward mergers and acquisitions are
likely to keep the technology industry in the top spot for M&A activity in
2012, according to the latest report from PwC.
Innovation and time-to-market
concerns continue to fuel M&A activity in the tech sector, according to
PwC's "2012 U.S. Technology M&A report," which provides an
analysis of 2011 tech deals and the outlook for 2012. The study cited increased
activity among tech companies buying up players in the fragmented cloud and
social media markets, which have moved to center stage with announced and
completed initial public offerings (IPOs).
While spending forecasts
have been reduced, the technology industry has generally bucked the negative
trends the majority of industries have experienced in the last few years.
Despite the unease in the stock market, profitable tech businesses managed to
sock away cash during the year, increasing the coffers of the top 20 U.S.
technology companies to more than $300 billion in cash and marketable
investments by year's end, more than the total transaction value of closed
technology deals in the last three years combined, the report said.
Shortly after the close of
2011, IT research firm Gartner lowered its 2012 technology spending forecast to
3.7 percent, and analytics specialist Forrester followed suit, with a forecast
of 5.2 percent. Gartner and Forrester estimates for technology spending in 2011
totaled 6.9 percent and 9.7 percent, respectively.
The decrease in anticipated
IT spend in 2012, just over half that of 2011, provides an interesting view of
growth in technology businesses in the coming year, PwCs report said.
During the year, the market
witnessed the public offerings of Groupon, Zynga, LinkedIn, Pandora and other tech-focused
businesses. While overall IPO filings declined in terms of volume and value
from 2010 to 2011 due to market volatility during the year, key technology
players have not completely written off IPO ambitions. Not long after year-end,
came the much-anticipated announcement of Facebook's IPO filing, which is
expected to be one of the largest technology IPOs in history.
In addition, PwC noted that
several companies announced major changes in 2011, which might signal more
transitions to come. For example, Google announced an entrance into the mobile
handset market in a big way, with the acquisition of Motorola Mobility.
In another significant shift
last year, Hewlett-Parked announced the spin-off of its Personal Systems Group
(PSG) business; HP later canceled the plan, and this month announced that it
would combine its PSG and printer businesses.
We expect a continuation of
shifts in strategic direction resulting in sizable acquisitions in the coming
year, the PwC report said.
With nearly 2 billion
Internet users across the globe, the volume of data (both structured and
unstructured)in the form of emails, tweets, blogs, instant messages, videos,
photos and Web pagesis growing exponentially. Information collected through
social media platforms, Websites and mobile providers has the potential to
provide businesses with details about consumer demographics and interests like
Businesses that can provide
the software tools to collect, organize, analyze and summarize findings from
this data will become highly relevant in the near term and likely targets for a
variety of businesses looking to put big data to work, the report said.