Retooling for Sustainability
Selling Smarter
Machinery as a Service
The Digital Solutions Future
Expanding Beyond Machines
Evolving Amid Disruption
Foreword & Critical Trends
Strategic Advantages
LOOKING FORWARD
Rethinking the Post-Acquisition Playbook
Reshaping Portfolios Via M&A
Building Sustainable, Resilient Supply Chains
Consumption-Based Pricing
Sales Productivity
Beyond the Rule of 40
The US-China Decoupling
Welcome to Web3
The Engine 2 Imperative
Defending against Disruption
A Multicloud World
The Rise of Growth Equity
Value Evolution
Competitive Battlegrounds
LOOKING FORWARD
Tech Companies Eat Disruption for Breakfast
Bain’s inaugural report on the state of the industry examines how leading companies are investing in software and automation, advanced services, supply chain sustainability and resilience, innovative business models and sales approaches, and other tools to build competitive advantages within—and beyond—their machines.
Technology Report 2022
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AI’s Next Frontier
Operational Advantage
The Chip Shortage
The Circular Economy
The Industrial IoT
Software R&D Efficiencies
High-growth firms have suffered most
from market shifts …
A lot can happen in a year. Traditionally in tech, value is determined by innovation and revenue growth. This year, macroeconomic and geopolitical factors have played an outsized role. When we wrote our last report, technology stocks were still on a meteoric rise. Today the sector has been hit hard (see figures, right).
Still, CIOs and CTOs are increasing their technology spending. Of course, there may be budget pressure in the future, but over the long term, to them—and to us—tech is not so much a cost as an investment that spurs productivity.
Turbulence and disruption are in this sector’s DNA, and often give rise to fresh advances. However rocky the next year may be, technology will continue to play a central role in the global economy, helping to shape how companies create sustained value.
David Crawford
Leader of Bain’s Global Technology Practice
Welcome to Bain’s third annual Global Technology Report
Welcome to Bain’s third annual Global Technology Report
…but they’re still investing in IT
The Rise of Growth Equity
A Multicloud World
Welcome to Web3
The US-China Decoupling
Defending against Disruption
The Engine 2 Imperative
AI’s Next Frontier
The Industrial IoT
Sales Productivity
Consumption-Based Pricing
Software R&D Efficiencies
The Chip Shortage
The Circular Economy
Beyond the Rule of 40
Market valuations have tumbled
Multiples for companies with revenue growth of...
...40% or less
...more than 40%
12x
5x
32x
9x
November 2021
July 2022
November 2021
July 2022
Note: Public market valuation multiple is calculated by dividing total enterprise value by next-12-month revenue
Source: Bain survey (April 2020 n=210; April 2021 n=188; May 2022 n=179; 2023 forecast as of July 2022, n=187)
CIOs are still investing in IT
Percentage who expect IT budget to increase or stay the same
April 2020
April 2021
May 2022
2023
(expected)
44%
75%
90%
77%
Source: S&P Capital IQ
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A lot can happen in a year. Traditionally in tech, value is determined by innovation and revenue growth. This year, macroeconomic and geopolitical factors have played an outsized role. When we wrote our last report, technology stocks were still on a meteoric rise. Today the sector has been hit hard (see figures, right).
Still, CIOs and CTOs are increasing their technology spending. Of course, there may be budget pressure in the future, but over the long term, to them—and to us—tech is not so much a cost as an investment that spurs productivity.
Turbulence and disruption are in this sector’s DNA, and often give rise to fresh advances. However rocky the next year may be, technology will continue to play a central role in the global economy, helping to shape how companies create sustained value.