Tech Buzzwords from an M&A perspective

Contributor Eric Furlow

By Eric Furlow

When I hear a new technology buzzword I first wonder …

What is it? Is it a product, a service, a process, or something bigger? How far on the horizon is it?

Will the buzzword become its own industry? Will it become a new way of doing business containing multiple industries like “the cloud”? Or will it just become a single product which attains rapid adoption yet quickly gets folded into Managed Service Providers portfolio of services?

I next think about this new buzzword from an Internet M&A perspective, so three important questions come to mind …

1)   Will this new buzzword evolve into a product, service, or industry with primarily one-time revenue or primarily recurring revenue?

The reason the one-time revenue vs. recurring revenue question is important to me is simple. Recurring revenue companies tend to be far more valuable, liquid and scalable than one-time revenue companies.

2)   Will the future providers of this buzzword be dominated immediately by the billion dollar companies? or will it possibly create 100’s of small private tech companies scattered throughout the US and Canada?

The reason this question is important is simple. For the last 20+ years, I have specialized in organizing, marketing and divesting private Internet service companies. I welcome new mom and pop Internet products/service industries.

3)   Which product, service, and/or industries will the buzzword replace? And of course, how fast and to what degree with this cannibalization occur?

In closing, when a new buzzword first appears on the horizon, many people including the media sit back waiting for industry leaders and acclaimed investors to give it credibility or not. If the “thumbs-up” is given, the buzzword spreads like a virus and within weeks the buzzword is appearing on 100’s of company & industry websites, blogs, Twitter, marketing materials, LinkedIn profiles, and even people’s resumes! It then becomes time consuming to figure out who is actually on the forefront of development and implementation into the sales channels vs. who is just talking about it.

And as always, the companies and investors with plenty of cash to burn will be first … yet right beside them will be companies and investors with just enough cash-on-hand to get started.

Then here we go again. 

Please feel free to Tweet, Like, Share, or Smirk and Smile.

Sebastian Amieva

Mergers And Acquisitions Newsletter™ Founder

More Info: www.sebastianamieva.com

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