We often get a question from our conference attendees and clients, "with so much rapid change happening in the market daily …how are you able to synthesize the leading Disruptive Tech Trends?" Well, there's a bit of a story behind the Top 10.

Over a decade ago, after working with all the major research firms, and multiple co-sponsorship with the Gartner Group, we realized that Corum was in an ideal position to produce not only the best annual report on software valuations, but also the definitive report on disruptive trends driving the M&A market.

How were we able to do this?

It's quite simple. We're in constant contact with more tech firms than anyone in the world. After 35 years of research, $50 million-plus in development costs, and 25 million entries, we had accumulated more proprietary data than anyone. And today, this gives us the ability to produce the insights and analytics we need in real-time.

Data on private companies, people, contacts, projects, plans, targets, etc. are constantly changing! It's the nature of our industry. Statisticians tell us that within 3 years, any given database will have a 97 percent error rate. Just getting this information is difficult. Keeping it updated? That's nearly impossible to do. Why? Think about it. You need a reason to communicate together, correspond, and connect! No one is going to send you new information or changes about their company, staff, policies, etc...let alone respond to a questionnaire that you might send to them. Most companies can't respond just for security reasons!

This is where Corum's position as the world's leading tech M&A educator and dealmaker comes in.

We produce or sponsor over 200 educational events a year, live, and online. More than everyone else in the world combined! That's an event every 36 hours! Most firms struggle to produce 1-2 events a year. We do 200, with thousands of new companies uncovered every year.  Attend one near you.

This means that Corum has the nonstop outreach - email invites, co-sponsor updates, telemarketing, VIPs, mailed invites, research reports, etc. - that enables us to update our data constantly.

Further, input from attendees at these events, from our research centers in Europe, the US, and Asia, and our work with the World Technology Council, allow us to rank, rate, and curate information on these private companies. Companies that are the emerging sellers, representing the technologies of the future.

On the other side of the equation are the buyers - those who need the technologies that you are creating!

As the world's leading seller of software companies - having sold more tech companies than anyone - Corum is right in the middle of buyers and sellers, listening to both, taking notes.

We have the largest buyer knowledgebase and have daily conversations with these buyers from all over the world on the technologies they are looking for to stay competitive. They know us. Many have served on our advisory boards for these reports, or as speakers at our events. They get our research, even have their new staff attend our seminars and M&A boot camps.

What's unique about Corum is that we actually log all of our communications with both buyers and sellers. We don't waste these opportunities…everything is put into our database.

Corum is the only investment bank that has developed the methodologies, CRM software, reporting tools, and, more importantly, the critical corporate-wide discipline to capture this proprietary information. Every email, text, phone call, meeting note, conversation, webcast, etc. is logged. Everything.

It's not easy, and it's expensive. But it's the only way to capture the kind of information you need to be thought leaders on the disruptive trends that will shape our lives - trends that you as a seller can map to for increased value. This is critical knowledge that will help you get an audience with the right buyers.

Further, we have more proprietary deal comparables to help us take the high ground on valuations. That's why Wiley Textbooks has Corum as the leading expert on software valuations.

This is the inside information that we know you'll need.

Remember, unlike other investment banking firms, we're former CEOs like you. We've been there, we've built and sold our own companies, and we established Corum to help fellow CEOs do the same. We know what it takes to get that optimal outcome you deserve.

So, with that, let's take a look and see what our analysts have identified as the Top Ten Disruptive Trends for 2020.

AI Enablement

Last year, we noted that AI had become mainstream; in 2020 we see it increasingly specialized to create value in the enterprise and across industries. As the market continues its shift from raw AI tech to AI-enabled systems, the types of acquirers shift as well. Tech giants such as Google, Microsoft, and Apple are now joined by traditional companies, including McDonalds, Daimler, and Walmart.

Key deals highlight the diversity of both acquirers and applications. Prudential bought consumer insurance marketplace Assurance IQ for $2.4B; Shopify acquired warehouse automation developer 6 River Systems for $450M; and Appfolio acquired property leasing SaaS Dynasty Marketplace for $60M. AI systems trained on data, and integrated with feedback loops, were critical to each deal.

Financial acquirers also saw the value of AI Enablement, with Corum client Leiki, in Finland, providing adtech contextual intelligence to Providence Equity's DoubleVerify; and business process specialist BP Logix, another Corum client, acquired by Finrock Growth Partners.

There remain unexploited feedback loops and datasets; among vertical use cases, distinctive, defensible niches are more valuable, particularly in security and other anomaly detection situations, as the specialization trend-within-a-trend launches the 20s.

Actionable Analytics

Decades after the measure-to-manage business cliché was swamped by a turgid sea of noisy data and overbuilt platform tools, Actionable Analytics surface again. Today, this goes beyond optional eye candy visualizations to deliver useful decision support right where it is needed, solving 'small data' problems with robust but rightsized BI, and empowering entrepreneurs and employees with democratized means to quickly respond to practical insights.

Often—but not necessarily—empowered by AI and other new levels of software finesse, the analytic tools in demand today address business performance in environments where time and competition are key factors, highlighting specific actions geared towards specific results. That's clearly the goal with the $15B Salesforce-Tableau megadeal.

This trend drives acquisition opportunities across consumer-facing sectors particularly, including games and Internet areas where quick adaptation and Data Science Monetization is a competitive necessity—but any consumer-facing brand needs these capabilities, hence McDonald's $300M acquisition of Dynamic Yield.

Corum client Bizview Systems, sold to Insight Software, provides Actionable Analytics through its business performance management tools, while another Corum client, MemberXP, was acquired by CU Solutions Group for its credit union customer analytics and benchmarking capabilities.

Payment Stream Control

With offline and online commerce effectively merged, and every transaction a digital transaction, acquirers see significant value in controlling the digital streams of payments. Last year that drove $85B in disclosed deal value for payment processors and hundreds of deals across a variety of sectors.

Private Equity, in particular, is showing an increased interest in tech solutions that serve as payment pathways to vendors, utilities, service providers, and others, even if a relatively small component of the overall feature set. This can create increased value in unexpected sectors such as non-profits, property management, and even narrower niches. Corum client Blue Cow Software leveraged its suite of software solutions designed for the fuel oil, propane, and HVAC industries into an acquisition largely driven by this trend.

In addition to payment in all its various forms—billing, invoicing, procurement, transaction processing, and more—supplementary technologies can also be bolstered by this trend, like payment management, anti-fraud capabilities, and real-time payment technology. Anything that gets an acquirer closer to achieving Payment Stream Control has a built-in advantage in tech M&A.

IoT Software

From fire hydrants to industrial equipment to home appliances, everything around us is becoming connected. Innovation is accelerating as chips become miniaturized, voice enablement becomes ubiquitous, and AI predicts behavior based on data from connected devices.

In a world of IoT generalists and commoditization of hardware, tech companies combining product-market fit in key verticals, a software-first approach, and recurring revenue will generate high demand. Examples include analytics SaaS Mnubo, acquired by Aspen Technology for $78M; device management SaaS Zingbox, acquired by Palo Alto Networks for $75M; and medical device monitoring SaaS Geneva Healthcare, acquired by BioTelemetry for $45M.

For Corum's part, IoT software products and expertise played a vital role in at least five of our deals in 2019 for sellers serving markets in health care, trucking, life sciences, automotive and more.

Buyers place high value on companies providing cloud-based, analytics-rich capabilities via SaaS models. Still, new models are emerging as well—tech firms that can successfully develop and monetize those new models will also see significant acquirer interest.

Hybrid Cloud

It's sometimes said that "The cloud is just somebody else's computer." If that's the case, then a hybrid cloud is somebody else's computer and your computer working together—along with yet another computer somewhere, your phone, maybe some sensors with edge computing capability, and all the various wireless and other networking that ensures it all works well together. The additional complexities of a hybrid cloud system are more than outweighed by the significant value that these intricate, sometimes delicate constructions can create across both tech and non-tech companies.

This also means significant value for those technologies that are enabling the eclectic combinations of computing, storage, and communications capabilities that make up today's IT environments, from the cloud to the edge and everything in between.

This can be anything from software-defined storage vendor Elastifile, acquired by Google, to endpoint security systems like Bromium, acquired by HP, to embedded file systems developer and Corum client, Datalight, acquired by Tuxera. There's a strong M&A market for any tech company that has made itself indispensable by connecting, defending, analyzing or otherwise enabling such hybrid cloud applications systems.

Focused IT Services

Specialization has become the path to premium value in the services space. Consulting firms, system integrators, and other services firms offering narrow but deep levels of knowledge and experience are driving higher levels of demand. 

This focus on complex problems and intricate platforms require expertise in applications, maintenance, and redevelopment of the technology stack. Deep domain knowledge and resulting long-term customer relationships are particularly important—especially when leveraged into predictable, recurring managed services revenue streams.

Firms at the leading edge of disruptive or key trends, both of which underpin high-value verticals, are attracting lots of attention around the globe. This is particularly true of trends that explicitly introduce more complexity into the IT environment, like IoT software and Hybrid Cloud, both of which were key aspects of the sale of Corum clients Integron to Kore Wireless and Witekio to Avnet. Other trends like AI, security, compliance, and healthtech also spark interest.

This trend extends to integrators with focused expertise in complex ecosystems like Salesforce and Microsoft Dynamics; cloud computing environments like AWS and Azure; enterprise IT toolsets like SAP and Oracle; and in key sectors such as financial services, manufacturing and healthcare.

HealthTech Continuum

Providers are gathering more patient data than ever, using everything from wearables to patient engagement tools, from preventative care to integrated treatment. Patients are more educated and expect transparency and up-to-date tech in all phases of care—as demographic shifts increase overall demand.

These trends are driving change across the industry, as healthtech providers deploy systems to leverage data into a holistic view of the patient and system, reflecting the shift towards patient-centered outcomes, versus lowest-cost treatment plans for acute relief.

Traditional inpatient health systems need a unified view of patients across the continuum of care, long after they've left their facilities, and can only accomplish this by integrating with distributed services in post-acute and palliative care settings. Examples include Corum clients Collain Healthcare, with its EHR for skilled nursing facilities and senior housing, and Total Triage, provider of an on-demand nursing staffing platform.

This also drives demand for provider collaboration and patient engagement, with solutions bridging the gap across virtualized care providers—such as healthcare communication platform Voalte, acquired for $180M.

Healthtech innovators enabling consistent access to patient data and a holistic vision of care will continue to be attractive M&A targets in 2020.

RegTech Systems

Regulatory technology is now mission-critical for banks, financial institutions, and the enterprise since compliance with complex regulations can only be accomplished efficiently using technology. Governments, businesses, and consumers must all grapple with significant regulatory volatility. As technology becomes more necessary to navigate this labyrinthine but unavoidable landscape, the value of that technology increases, especially amid changing and uncertain times.

This trend drove deals across sectors. Tax compliance was in demand, with companies like Foriba and Tax Systems acquired, the latter for $150M, as were other financial compliance tools like Gordian Compliance and Redland Business Solutions. Elsewhere, privacy technology found traction, with Faktor acquired by LiveRamp and Cognigo by NetApp. EHS companies also drove deal flow, including Intelex acquired by Fortive, and Corum client Perillon by Lisam Systems.

For companies in any market building robust solutions that enable compliance, it is a great time to be thinking about M&A. The diversity of regulatory impact across jurisdictions and industries makes the acquisition of companies with point solutions and specific domain expertise a particularly important part of this ecosystem, with larger players seeking to add the pieces needed to stay relevant and quickly flexible.

Smart Logistics

Whether corporate or consumer, customers today demand more: large inventories are less tenable, and everyone wants their shipments yesterday. This can only happen through massive application of new technology: Smart Logistics.

A diverse set of global buyers is racing to acquire and apply this technology, competing in a $10T industry, climbing to $16T by 2026. Smart Logistics includes data-driven software platforms that automate the management of shipping and storage, transport systems, supply chains, and more. Key data inputs increasingly come from connected IoT sensors. Given the massive volume of data that logistics represents, there's a significant need for robust analytics and artificial intelligence.

SCM and logistics M&A boomed in 2019 with deals like E2Open acquiring Amber Road at $425M for its global trade management SaaS, and Bridgestone acquiring TomTom's fleet management and SCM SaaS for $1B. In addition to Bridgestone, Smart Logistics deals were also done by manufacturers like Volkswagen, Michelin, and Phillips Industries, which acquired Corum client Connected Holdings. SCM players like Decartes, Trimble, and WiseTech were also active, along with top tier names like Walmart, Amazon, and Accenture.

Blue Collar Software

Skilled labor occupations, 60% of all workers, are seeing their roles and industries transformed by disruptive technology is transforming they build, sell, move, plant, harvest, inspect, maintain, repair and more, across multibillion-dollar industries like construction, agriculture, transportation, manufacturing, and many others.

Beyond the underserved market, a key feature of the Blue Collar Software trend is the leapfrogging of traditional on-premise solutions, proceeding directly to mobile-first and IoT-integrated systems. But in such practical industries, bottom-line results speak louder than tech buzzwords, so tech with clear productivity gains wins out in opportunities across quoting, billing, scheduling, navigation, and more.

This trend helped drive eye-popping valuations for public AEC tech companies, topping 8x sales, plus deals of all sizes, especially where Blue Collar Software intersected other trends. Corum client Connected Holdings leveraged IoT Software to enable Smart Logistics for the trucking industry—acquired by parts manufacturer Phillips. Companies like Elevia and Blue Cow Software were acquired by private equity firms seeking Payment Stream Control through billing, invoicing, and credit transactions. Non-tech acquirers and PE firms are regularly in the M&A mix here, as well as vertical software companies.