Wall Street is starting to realize what we have said all along: that while “hot” consumer-focused technology gets all the buzz, enterprise tech that serves businesses is where it’s at. That’s the software that truly powers the world and is indispensable to the modern globalized economy.
According to an analysis from The Wall Street Journal, since 2016, the business-software companies that have gone public have performed much better than their consumer-centric counterparts. Shares of their stock have risen a median 126% from their debuts through Tuesday’s market close, according to the Journal. That compares with a median 15% increase for the consumer-tech companies.
The reasons for this are many, but a primary one that we subscribe to is that the entrenched old guard is easier to disrupt than ever before. Technologies such as cloud computing have made it much easier to deliver enterprise “software as a service” more efficiently (and cheaply.) Keep that in mind when the media goes crazy over the next big tech IPO.