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MW IT Index: Q1 Report
Q1 2014 Index Shows Industry Optimistic for Coming Year
With the conclusion of the first quarter of the new year, it is time to once again to consult the MW IT Index® for a broad look at the IT industry and see how it is faring in 2014 after a strong 2013.
The maturity of the IT Services market continues to preclude any major collective shifts in the Index, though we are seeing a general optimism as enterprise spending returns. We expect continued performance as the recovery continues, with IT spending expected to increase 4.6% from 2013.
The most volatile performers in our Index continue to be the SaaS and Supply Chain sectors, which remain, respectively, the highest and lowest valued sectors that we track. The SaaS industry in particular is seeing higher valuation multiples than ever before, while many of the Supply Chain companies faced further difficulties this quarter as holiday revenues came in significantly below expectations.
On a global scale, we anticipate continued convergence in the Indian IT services field, especially among Tier 2 players looking to better compete with the higher-valued Tier 1 companies. Additionally, the Chinese IT industry, which already this quarter has seen milestones in M&A activity with Lenovo's acquisitions of Motorola Mobility and IBM's x86 server division and Chinasoft's investment in SaaS provider Deem, Inc., will continue to accelerate in both size and market presence in the year to come.
For more analysis, click here to read the latest edition of the MW IT Index® (Global Edition).
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About martinwolf
San Francisco, CA Bangalore, India
With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in nine countries. We are a five-year member of the Merrill Lynch PS Referral Network, and are a strategic partner of the Enterprise Advisory department of CICC, China's first joint-venture investment bank.
The firm is also a presenting sponsor of the Global IT M&A Forum.
martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.
To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.
© martinwolf 2014
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