A lot of tech earnings came out this week. While results are not rosy on all aspects, the earnings and CEO discussions affirmed a few themes for technology investors:
Adoption of cloud and mission-critical software infrastructure services will continue to grow and a main driver for other IT spend of all kinds. It may not grow at the double digit rate in the near term but it will be a main driver for many other infrastructure, cybersecurity, data management, and data science spend.
Networking effect in enterprise products is an effective retention and revenue lever. Products that have collaboration and workflow optimization features that help professionals communicate, track, monitor, evaluate are valued. Network effect helps professionals connect, learn, work better, and save time. This is true for all use cases.
Applications of machine learning and AI continue to grow. We are in the early innings. More data, better compute, and bigger and more diverse pool of talent will help mature and advance AI/ML deployments across industries.
In addition to IT budget, people’s time will be a barrier to adoption. Any technology product will have to answer the question about how the product saves people’s time or why people would spend time on the product.
Ability to continue to innovate (not copy or follow competitors) for value retention and creation. Meta is a good example. The company has not been innovating on where it matters for its core users. Instead, it is focused on mirroring TikTok, and that is a mistake. More on this later.
The opinions are my own and not investment advice.