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CEOs Are Focused on Core Markets
Despite record-low interest rates, more than one quarter of CEOs listed "limited access to capital" as a threat to technology growth.
Posted Apr 27, 2004
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Deloitte & Touche has unveiled the findings from its 2004 Technology Fast 500 CEO Survey, which indicates that although technology executives are optimistic about the future, they remain focused on their core markets and are looking to improvements in tax structures and equity markets to provide assistance. About 40 percent of the Technology Fast 500 comprises software companies, primarily those focused on business applications. CRM stalwarts leading the list include KANA, E.piphany, and Unica, with firms crucial to enterprise CRM integration, such as Selectica and webMethods, also represented. Detailed breakdowns of responses by industry type were not available at press time. Despite record-low interest rates, more than one quarter of CEOs listed "limited access to capital" as a threat to technology growth, more than terrorism or competition. "Other than telecom, which is very heavily leveraged, a lot of tech companies don't borrow much," says Mark Evans, managing director of Deloitte & Touche's Technology, Media, and Telecom group. "The equity markets until recently have not been receptive to offerings, and that is the number one traditional source for a lot of these companies. We are starting to see some tech IPOs on the horizon, but it is not what I would call a robust market for primary or secondary offerings." Enterprise technology users should be on the lookout for a renewed surge of vendor mergers. Although about two thirds of respondents said they planned to focus on internal growth, nearly one quarter of respondents said they planned to make an acquisition, and that share is nearly double the results of the 2003 survey. The revival of a growth mind-set has tech executives looking cautiously overseas. Sixty-three percent of CEOs still see the mature North American market as their richest growth opportunity, but that number is actually down slightly from recent years, Evans says: "It still looks highly skewed to North America, but two or three years ago a higher proportion of revenues [was] being predicted from international markets. It's a transition right now, and as the economy improves we will see fewer people relying on North America."
One curious note for students of customer-centric strategies is that Technology Fast 500 CEOs, as a group, does not believe that customer satisfaction factors significantly into tech revenue growth. Although the largest share of CEOs submit that "developing a strong marketing and sales strategy" is the most important operational issue, when asked about their "biggest marketing challenge in sustaining revenue growth," the largest share--26 percent--said it revolves around new products, with "building customer loyalty" trailing at 5 percent, leading only the "other" category.
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