Technology M&A trends in 2016: how Steve Andriole sees them
Steve Andriole, a digital specialist, assesses the predictive value of his trend-based model for the Tech-Industry M&A activity in 2016. His approach is very interesting since he develops an extremely rational methodology and uses many examples to illustrate his ideas.
“A business technology trends-driven model”
Firstly, what is his methodology ? A «business technology trends-driven model» he says — and although biased, he admits, if combined with a pragmatic industry analysis can yield good results. New products and services should be relevant and “solves important problems”.
His approach starts with identifying the main trends, which has two dimensions: the firsts are macro business technology trends and the seconds are enabling trends (which “enable” the macro trends, such as Cloud Security vendors vs Could Delivery Services). There are currently five big macro trends: cloud delivery services, digital entertainment, location-based services, digital security and analytics. According to Steve Andriole, investors should bet on these five sectors as they will lead technology M&A in 2016. For example, he predicts that Electronics Arts is well positioned to be an interesting target next year.
Nonetheless, he tries to warn us about something. Investors should be wary of following the main VC players as they tend to be more “trend-followers” and therefore lag the real current trends in the marketplace. Also, managing “other people’s money” can yield to more risky and bet-like decisions in general.