2006 global survey of CEOs in the Deloitte Technology Fast 500
The CEOs of the world’s fastest growing technology companies are more confident than at any time since the dot-com boom. Yet the signals from the marketplace are not quite as clear. While CEO optimism and deal valuations continue to impress, economic uncertainty in Europe with rising interest rates in the United States, suggest a possible slowdown on the horizon.
Technology industry from its leading edge
The actions of the world’s fastest-growing companies reflect the dichotomy. Despite the mixed signals, a number of clear messages are emerging:
CEO confidence remains vibrant, but may be topping out.
Generally favorable economic conditions enable technology companies to focus on sales growth, rather than cash flow or raising money. The slightly subdued outlook in EMEA and the bigger concern of CEOs in the Americas about raising money may indicate that confidence is at or near its peak.
Companies plan to grow organically, but may receive offers they can’t refuse.
The majority of companies expect to grow from within, rather than through mergers or acquisitions. However, M&A and IPO valuations appear to be on the upswing, with a number of highly publicized deals raising eyebrows.
Finding and managing talent in an increasingly tight labor market.
“High quality employees” were cited as the factor that most contributed to the spectacular growth and nearly all of the companies expect to expand their workforces. However, many of them are experiencing the early stages of a global labor shortage that will likely last for decades.
Tapping new resources through strategic alliances.
There is a noticeable shift toward partnerships and collaboration – particularly for research and development (R&D). These relationships allow companies to expand their capabilities and talent base without increasing headcount, and help defray skyrocketing development costs.
Companies continue to focus on their own regional markets.
The reasons may vary from transportation and energy costs to the difficulty of procuring quality staff outside the local region. Or it may signal a more conservative approach to growth, solidifying presence at home before looking for new opportunities abroad.
Government regulation is the top concern.
New legislation to curb corporate misconduct and mitigate environmental risks with aggressive regulation is seen as the biggest concern by more than a third of the survey’s worldwide respondents.
Wireless and Internet technologies picked to grow fastest.
Voice communication is expected to be the biggest source of wireless growth in the coming year. The Internet is also expected to continue its spectacular growth, serving as the intersection for the ongoing collision of technology, media and telecommunications.
The Internet continues to transform the way we work.
The Internet enables companies to operate as virtual enterprises – the top uses are “data communication with clients” and to “connect geographically dispersed employees” followed closely by “customer support” and “sales and distribution”.
About the report
The Flying High report features observations and insights from leaders of the world’s most dynamic and innovative companies on where the technology sector is headed. The findings are based on a survey of CEOs in the Deloitte Technology Fast 500 – the fastest-growing companies from each of the world’s three major regions.
The survey addressed the full range of business challenges, from strategy and marketing to operations and finance. It also looked at the growth prospects for individual companies and the economy overall – including an assessment of the market’s hottest growth areas over a one-year and three-year time horizon.