In 2018, iMerge Advisors expects software m&a activity to increase due to the recent tax law changes. For buyers, attention is expected to be focused on the rapidly growing SaaS, software as a service sector. Specifically, iMerge expects to see ongoing consolidation in the IT services, data analysis and security solution sectors.
A new IDC report our last month indicates that enterprises will further increase spending on both PaaS (platform as a service) and SaaS (software as a service) over the next few years. For 2018, it is estimated that cloud services will grow nearly 25%, to $160 billion, as demand for cloud solutions accelerates.
By 2021, it is estimated that cloud solutions will reach $277 billion. The United States accounts for 60 percent of all spending on the cloud, followed by the United Kingdom, Germany and China.
In 2018, United States enterprises in manufacturing, professional services and banking sectors will account for $32 billion of the $96 billion expected to be spent in the US.
Since 2016 iMerge has witnessed ongoing consolidation in the IT services sector and small boutique SaaS software businesses. iMerge estimates that software m&a will return to previous levels after a dip in 2017.
With rising rates, economic conditions migrating away from the norm, 2018 is a great year to consider selling your software tech business. To learn about current market valuations for your business please contact us.