TECHNOLOGY
TECHNOLOGY IS TOUCHING EVERY CORNER
OF OUR WORLD: DRIVING RADICAL CHANGE
ACROSS COMMUNICATIONS, ENCOURAGING
STRATEGIC COLLABORATION AND
REINVENTING GLOBAL COMMERCE
At Goldman Sachs, we see concurrent revolutions within the technology space: the shift of computing from hardware to cloud and from desktops to mobile devices. Through these and other developments, technology is reshaping the way we live — a change that will provide enormous opportunities for people to participate in the global economy. As a strategic advisor and a source of capital, Goldman Sachs works not only with companies at the forefront of technological breakthroughs, but also within dozens of other industries undergoing technology-driven transformation.
1 E-COMMERCE
PLATFORMS
CONTINUE
TO TRANSFORM
THE WAY WE
SHOP AND SELL
As e-commerce soars and the first real digital generation comes into its own, online shopping platforms will grow, adapt and compete for market share. In 2013, Goldman Sachs helped both established e-commerce sites and new innovators take significant steps, serving as lead underwriter for zulily’s $291 million IPO and RetailMeNot’s $187 million follow-on, as well as advisor to travel aggregator Priceline on its $1.8 billion acquisition of Kayak, enabling the company to add leading-edge apps for comparing hundreds of travel sites at once.
According to Goldman Sachs research, digital commerce adoption and expansion is anticipated to further accelerate, with annual growth reaching nearly 17 percent within the next three years.
2 Advanced
technology is
enabling doctors
to detect diseases
earlier — which
means helping to
save more lives
MASSACHUSETTS-BASED HOLOGIC has become a driving force in early detection, ranging from cancer to infectious diseases. The company’s 3-D mammographic technology, for example, allows doctors to spot very small cancers that might have previously gone undetected, an advance with a profound impact on outcomes. As Hologic has evolved, Goldman Sachs has maintained a close relationship, helping to assess potential acquisitions and arranging access to capital that supported the company’s growth into an $8.5 billion enterprise.
3 Cloud computing has revolutionized data sharing and storage, setting a new standard for collaboration around the world
This game-changing technology has enabled the storage and sharing of huge volumes of data, the birth of entirely new business models and the ability to work collaboratively from any location around the globe. At our third annual Cloud Computing Conference, Goldman Sachs brought together a range of leaders — including technology innovators in cloud computing, executives from some of the most interesting companies driving this shift and venture capitalists. This group shared ideas on an array of critical cloud innovations and topics that are creating opportunity in the technology space and beyond.
4 TECHNOLOGY COMPANIES
ARE SETTING AN
UNPRECEDENTED PACE
FOR GROWTH, FACING
STRATEGIC DECISION
POINTS QUICKLY
Goldman Sachs team members supporting the Twitter IPO: Joseph Ghobrial, Anthony Noto, Nick Giovanni, Christopher Lapointe, Ryan Nolan and Brian Dong, Investment Banking Division
TECHNOLOGY COMPANIES have become some of the world’s largest and most impactful businesses — they’re growing faster than many of the companies that came before them, and arrive at critical decision points more quickly. In 2013, Goldman Sachs advised some of the best-known technology companies during watershed moments. In November, we were the lead underwriter on Twitter’s $2.1 billion IPO, the biggest tech debut of the year. Incorporated only seven years ago, the company now has 241 million active monthly users who, among them, send more than a billion tweets every two days.
5 Monetization of mobile presents huge opportunities for those who can crack the code
What was the most talked about theme at the Goldman Sachs Technology and Internet Conference in 2013? The monetization of mobile.
Pervasiveness Global sales of smartphones and tablets now outpace those of PCs and laptops. According to the UN International Telecommunication Union, mobile subscriptions will top the world’s population sometime in 2014.
Opportunity Companies are racing to find ways to capitalize on the growth of mobile technology, whether in mobile payments, mobile content, location-based services or the explosion of valuable data generated by the use of mobile devices.
Competition “The question is, who can best take advantage?” says James Covello, head of Technology, Media and Telecommunications Equity Research at Goldman Sachs. “Whether we’re talking about consumer transactions or social networking, which companies will benefit the most from the ubiquity of compute?”
6 The
pervasiveness
of technology
is creating
extraordinary
opportunities for
business formation
on a global scale
The ubiquity of online access has dramatically increased opportunities for creating businesses, according to Anthony Noto, global co-head of our Technology, Media and Telecommunications Group in the Investment Banking Division, and George Lee, chairman of our Global Technology, Media and Telecommunications Group and chief information officer for the Investment Banking Division. This change has created a global system of “costless distribution,” says Noto, allowing “a lot more capital to invest and reap the rewards of a large, globally distributed user base.” The advance of mobile, adds George Lee, hastens the trend by making that user base accessible 24/7. “Companies are now really focused on meeting the needs of consumers who are walking around with very capable computers in their hands,” he says. “In the next five to ten years, almost every human on earth will have access to extraordinary amounts of computing power. That pervasiveness of technology is driving change at an unprecedented level and pace.”
7 THE NEXT WAVE OF DISRUPTIVE TECHNOLOGIES WILL BRING FORTH EVEN GREATER TRANSFORMATION
GLOBAL INVESTMENT RESEARCH
What is the next generation of technology innovations that our clients should be thinking about? This is a question we are always considering. A Global Investment Research report, The Search for Creative Destruction, highlights some of the exciting technologies that are reinventing, once again, the notion of what’s possible:
3-D PRINTING Compared to traditional manufacturing, 3-D printing will drive greater customization, reduce costs for complex designs and lower overhead on short-run parts. Already growing at over 20 percent annually, the adoption of 3-D manufacturing is expected to continue on its path of rapid acceleration.
BIG DATA SOLUTIONS Companies and organizations everywhere are seeking to garner insights from the mountains of data collected by PCs, sensors, smartphones, tablets and other devices, enabling them to better synthesize the world’s information. Poised to attract even greater demand, such technologies help companies to get a better sense of customers’ needs and identify important market developments and product trends.
SOFTWARE-DEFINED NETWORKING (SDN) While the rest of tech has moved to the cloud, networking largely remains trapped in a paradigm of hardware and software boxes that are manually configured and nonscalable. SDN liberates networking from expensive hardware, making it easier and cheaper for technology administrators to respond to changing business needs. The field is likely to create new platform leaders and high-margin software companies.
A BUSY FRANCHISE
2013: AN ACTIVE YEAR FOR THE FIRM’S TECHNOLOGY, MEDIA AND TELECOM TEAM
Working closely with leading and emerging technology companies to help them achieve their business goals, Goldman Sachs’ Technology, Media and Telecommunications Group helped plan and execute a wide range of transactions in 2013, including, for U.S.-listed marketed transactions, 15 technology IPOs and 12 follow-on equity offerings as the lead manager. Over the span of a little more than a week in September, the team advised on or executed seven major deals, including the largest M&A transaction in a decade.
Notable transactions, in addition to others mentioned in this report, include:
- Apple’s $17 billion debt offering — this inaugural issuance played a key role in the company’s $100 billion capital return program and was the largest-ever corporate debt offering at the time
- Vodafone’s sale of the U.S. group which owns its 45 percent interest in Verizon Wireless to Verizon Communications Inc. for a total consideration of $130 billion, as well as Vodafone’s $11.5 billion acquisition of Kabel Deutschland
- Softbank’s $21.6 billion acquisition of a majority stake in Sprint
- Dell’s $24.4 billion take-private transaction
- News Corporation’s separation into two publicly traded companies, 21st Century Fox and News Corporation
- Tesla Motors’ $1.0 billion dual-tranche offering ($360 million common stock and $660 million convertible senior notes)
- LinkedIn’s $1.4 billion follow-on equity offering
