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
AI and Talent
Next-Gen Innovation
Digital Innovation
AI Investments
AI in Software
The AI Revolution
Investor Strategies
Investor Perspectives
Value Evolution
STRATEGIC Battlegrounds
LOOKING FORWARD
Reset and Reinvent: The Thriving Landscape of Tech Innovation
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 2023
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AI in Cybersecurity
Operational TRANSFORMATIONS
Sales Productivity
Post-Globalization
The Metaverse
Supply Chain Decarbonization
High-growth firms have suffered most
from market shifts …
Technology thrives on innovation, and today, the sector is in a period of renewal and reinvention. Tech is healthy, vibrant, and moving forward assertively, driven by strong global demand and broad interest in new technologies. What looked like a slowdown was actually a reset. After the Covid-19 spending bubble, demand slowed, valuations fell, and profitability mattered again. The sector responded, cutting costs and laying off thousands, then bounced back quickly with market caps near peak levels again.
This rebound rides on optimism. Technology is increasingly central to everything we do—personally, professionally, and as a society. Even during periods of economic uncertainty, companies continue to invest in technology. Large language models and generative AI represent the most significant disruption since the Internet. The need for resilience in supply chains is creating capacity in new places. These are the investments that will propel and reshape the tech sector in the years ahead.
David Crawford
Leader of Bain’s Global Technology Practice
Welcome to Bain’s third annual Global Technology Report
…but they’re still investing in IT
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
Semiconductors
Product-Led Growth
The Intelligent Edge
Investor Perspectives
Investor Strategies
AI Investments
The AI Revolution
AI in Software
AI in Cybersecurity
The Metaverse
The Intelligent Edge
Semiconductors
Digital Innovation
Next-Gen Innovation
AI and Talent
Product-Led Growth
Sales Productivity
Post-Globalization
Supply Chain Decarbonization
The technology sector bounces back
S&P 1500 aggregate market cap, weekly percentage change
Most CIOs still aren’t decreasing their budgets
Percentage of CIOs who say that their budgets are flat or increased
Note: Based on Wednesday closing prices
Sources: S&P 1500 composite sector data; Bain & Company
Source: Bain IT Decision Makers Survey (July 2021 n=150; August 2022 n=200; August 2023 n=151)
Tech
Next-best–performing sector
Worst-performing sector
300%
250
200
150
100
Jan 1, 2019
Jan 7, 20
Jan 5, 21
Jan 4, 22
Jan 3, 23
Jul 2021
Aug 22
Aug 23
87%
80%
76%
DOWNLOAD PDF
Technology thrives on innovation, and today, the sector is in a period of renewal and reinvention. Tech is healthy, vibrant, and moving forward assertively, driven by strong global demand and broad interest in new technologies. What looked like a slowdown was actually a reset. After the Covid-19 spending bubble, demand slowed, valuations fell, and profitability mattered again. The sector responded, cutting costs and laying off thousands, then bounced back quickly with market caps near peak levels again.
This rebound rides on optimism. Technology is increasingly central to everything we do—personally, professionally, and as a society. Even during periods of economic uncertainty, companies continue to invest in technology. Large language models and generative AI represent the most significant disruption since the Internet. The need for resilience in supply chains is creating capacity in new places. These are the investments that will propel and reshape the tech sector in the years ahead.
