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You are here: Home / Analytics / U.S. Rebounds To Drive Tech Gains
U.S. Rebounds To Lead Global Technology Revenue
U.S. Rebounds To Lead Global Technology Revenue
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Last year, the U.S. was third as a driver of future revenue growth for the tech industry. This year, America has rebounded, outpacing China and India for the crown. So say the results of an annual Technology Industry Business Climate survey from KPMG.

Survey respondents expect the U.S. market to provide the highest percentage of revenue growth and employment growth over the next 12 months. China, Brazil and India follow the U.S. in revenue, while India and China are second and third in employment.

"Technology executives clearly see a sustained recovery and a strong appetite for technology-related purchases by U.S. companies and consumers, which helped raise the position of the U.S. market," said Gary Matuszak, partner, global chair, and U.S. leader for KPMG's technology practice. "Coupled with demand from emerging-market countries, this combined opportunity bodes well for the industry."

Cloud Drives Revenues

Many of the survey respondents -- 77 percent -- expect overall revenue at their companies to be higher one year from now. The biggest revenue driver over the next three years? Cloud computing.

Sixty-five percent of KPMG survey respondents ranked cloud computing as the top driver. That's up from 54 percent in last year's survey. Mobile apps and advanced data analytics were second and third on the list, respectively.

But tech companies are less optimistic about hiring. Forty-nine percent of tech leaders anticipate their firm's head count will increase over the next 12 months, while 42 percent actually increased head count in the last year. While 27 percent of the tech execs said their head count already has reached or exceeded pre-recession levels, 42 percent said the head count will return to pre-recession levels over the next 18 months -- and 21 percent said the head count will never return to those levels.

"The industry has seen the rise of many innovative companies in the past few years. However, this is somewhat tempered by an overhang of the U.S. downturn, as technology leaders now project the U.S. economic recovery to take hold in 2013 or beyond, indicating full economic recovery remains at least two years away," Matuszak said. "There clearly is a continuing delay in their view of the U.S. economic recovery. Last year, the survey respondents predicted that the overall U.S. recovery would take hold in 2012, while in our 2009 survey, executives believed it would begin to take hold in 2011."

M&A Madness?

More than 80 percent of technology executives believe their companies will be involved in a merger or acquisition during the next two years, with 68 percent likely involved as a buyer and 15 percent as a seller. Survey takers also said access to new technology and products (69 percent), and product synergies (50 percent) will be the most important drivers of alliances, mergers and acquisitions over the next 12 months.

"Mergers and acquisitions and funding are picking up. Foursquare won $20 million in venture capital. Mergers and acquisitions and other forms of start-up investing are really the indicators of how active a marketplace," said Brad Shimmin, an analyst at Current Analysis.

"Investing tells you that there are start-ups with business ideas that people with money think are going to make money eventually," he added. "Mergers and acquisitions show that there is enough competition in the marketplace to drive a need for one company to buy another company's territory or eliminate another company's competitive stature technologically or otherwise."

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