Explore the latest shifts in technology with our sector insights report. The report focuses on four key areas:
1. Big Technology accelerates AI Capex spend as demand proliferates
With the rapid deployment of AI generated content and systems that are generating and processing vast amounts of data; the global data generated continues to rise significantly. Other drivers include social media platforms; IoT device growth and smart technology; cloud computing; ecommerce; streaming and digital transactions. At present, and adding all these factors in, the projection for growth is from 147 Zettabytes in 2024 to 181 Zettabytes in 2025. Put simply, the data demands on the world are high and require infrastructure solutions.
2. Data Usage is growing at a significant cadence as online adoption grows
Ireland acts as a base for some of the largest US multinationals in the technology and healthcare sectors. Ireland has the largest share of workers employed by US firms in the EU as result. This presence, along with changes to international and domestic tax rules, supportive policies for Intellectual Property (IP) and growing profitability has resulted in record corporation tax receipts in Ireland. Corporate tax changes in the US bring the greatest risks for Ireland in our view. In the absence of reforms, corporate tax receipts in Ireland are expected to grow further.
3. Software Services market looks in a tough spot, but exceptions arise
Software services businesses have underperformed across our coverage recently with a UK/European bias. Those with public sector exposure particularly to the UK (with budget restrictions) such as Kainos Group have seen a drop-off in consulting services revenue whilst SME exposure has been a headwind. The wider segment has suffered from a price conscious customer base both from public and private markets as the macroeconomic uncertainty has deteriorated. The cautious spending mentality is also driving longer sales cycles with NCC group downgrading.
4. Cyber security market trends: consolidation a feature as risks grow
With a low-lying valuation landscape, the rotation of assets out of public markets into strongly funded growth buyout PE funds has accelerated. Whilst the stronger dollar has exacerbated this trend, the acquisition of Darktrace by Thoma Bravo is a standout for $5.3 billion in an-all cash deal completed in October. Leading Cyber defence platform Palo Alto Networks has completed 18 deals from 2017-2023 with an average ticket size of $300m. Sophos also added scale with the acquisition of Secureworks and CyberArk acquired Venafi. The acquisition momentum is driven by existing players looking to tools such as MDR/SOC’s. In an Irish context, we have seen Forcepoint recently acquire Getvisibility to boost its AI Cyber risk detection.