One Global Village: Technology Industry Key Findings

www.pwc.
com/ceosurvey
One global village
Technology industry key findings
18th Annual
Global CEO Survey
February 2015
Our thanks to the following CEOs for participating in our face-to-face interviews; their comments are
included throughout this document
Dr. Vishal Sikka
Chief Executive Officer & Managing Director
Infosys, India
T.J. Rodgers
Founder, President and Chief Executive Officer Click here to view the video interview
Cypress Semiconductor Corporation, US
Click here to view the video interview

D. Mark Durcan
Chief Executive Officer
Micron Technology, Inc., US
Michael Dell
Chairman and Chief Executive Officer Click here to view the video interview
Dell Inc., US

Thomas J. Lynch
Chairman and Chief Executive Officer
TE Connectivity, Switzerland
John Donahoe
President and Chief Executive Officer Click here to view the video interview
eBay Inc., US

Kimmo Alkio
President and CEO
Tieto, Finland
18th Annual Global CEO Survey Key findings in the technology industry Click here to view the video interview February 2015
PwC 2
18th Annual Global CEO Survey at a glance
CEO insights
from 22
36% have
revenues over 1,322
industries US$1 billion
All CEOs
77
93% male;
7% female Countries
The CEO 33
agenda Growth Competition Face-to-face
interviews
Technology Partnerships Diversity 176

Tech CEOs
18th Annual Global CEO Survey Key findings in the technology industry February 2015
PwC 3
Technology sector sample demographics
Revenue Subsector Geography
10% 5%
3% 9% 18%
3% 27%
35%
13% 38%
28%
38%
39% 34%
US$0 to US$100M Computers & Networking

Americas
US$101 to US$999M Electronics Manufacturing/Distributors
US$1 to US$10B Software/Information Technology Europe
Over US$10B Semiconductor
Not stated Internet Africa, Asia, Middle East, Australia
Other
PwC 4
Growth
PwC 5
Growth
Strong confidence in the global economy
Optimism about growth

remains high, with 87% of 92%
tech CEOs predicting revenue
87%
growth. Looking three years
out, 92% of tech CEOs are
confident about revenue
growth.
2015 2018
Q: How confident are you about your companys prospects

for revenue growth over the next 12 months? (respondents
who stated confident and somewhat confident)
PwC 6
Growth
Tech CEOs see some of the G7 economies as poised for accelerating

growth
The US maintains the top spot and the UK rises from 6th to 4th as most important country for
growth in 2015.
US China
Germany
UK Brazil India
2015 43%
38 38% Japan
34 24%
13% 12% 12% 10%
Indonesia
5%
Australia
4%
Russia
2%
19
2014 38% 37% 17

20%
Mexico UK Japan Russia Indonesia
33 30 Brazil India
10% 10% 9% 3% 3%
13% 12%
Germany
US China
Q: Which countries, excluding the one in which you are based, do you consider most Up from last year Same rank as last year Down from last year
important for your overall growth prospects over the next 12 months? (%)
PwC 7
Growth
More optimism towards growth opportunities and less concern

about threats
Nearly three-quarters (74%) of tech CEOs believe there are more growth opportunities than there
were three years ago, significantly more than their peers across the total sample (61%).
74% see more

54% see opportunities
more threats
Q: How much do you agree/disagree that there See more opportunities

are more growth opportunities/threats for your
company than there were three years ago? See more threats
PwC 8
Growth
Causes for concern

Tech CEOs are getting more concerned about cyber threats and the increasing tax burden.
Cyber moved from the 5th top threat last year to the 3rd. The increasing tax burden jumped
from the 6th to the 2nd top threat.
83%
70%
65%
of tech CEOs
of tech CEOs are of tech CEOs are are concerned
concerned about concerned about about the
cyber threats the increasing availability
tax burden of key skills
2014: 56% 2014: 59% 2014 : 68%

Q: How concerned are you about the following potential
economic, policy, social and business threats to your
organisations growth prospects?
PwC 9
Growth
Disruption and convergence continues to redefine industry

landscapes
believe companies will
With barriers to entry 71% increasingly compete in new

sectors in the next 3 years
declining and industries
converging, tech CEOs
are more concerned 67%
about new market
entrants.
are concerned
about new market view competition (new and
entrants 63% traditional) as likely to disrupt
their industry landscape
Technology CEOs
PwC 10
Growth
Cross-sector competition expected to come from professional and

business services, communications and E&M sectors
Which industry do tech CEOs Professional and

business services
30%
believe a significant
competitor is emerging?
Professional and business Communications, 29%

entertainment & media
services (30%) and
Communications,
entertainment & media (29%) Retail & wholesale 16%
distribution
16% Financial services
(inc. real estate)
Healthcare, pharma 13%

& life sciences
11%
Energy, utilities 11% Consumer products
and mining manufacturing
10%
Industrial
manufacturing
Q: From which industry or industries outside of your own do 7%
you think a significant competitor is emerging or could
emerge?
Automotive
PwC 11
Growth
Technologys influence on other industries continues to grow
Technology is increasingly
playing a fundamental role in 3
every business.
55%
Of E&M CEOs, 55% say a
significant competitor is 52%
emerging or could emerge from
the technology sector.
16 48%
47%
13
Banking & capital Power and utilities Communications Entertainment &

markets media
Q: From which industry or industries outside of your own, if

any, do you think a significant competitor is emerging or could
emerge? (% who stated technology)
PwC 12
Competition
CEOs speak
On competition and industry disruptions
We're seeing the effect of disruptive
companies on our traditional customers and in
John Donahoe the networks... It's more around the business
President and Chief Executive Officer models and how fast the cycles go.
eBay Inc., US
Thomas J. Lynch
Chairman and Chief Executive Officer
Our challenge is that we need to continue TE Connectivity, Switzerland
disrupting ourselves before someone disrupts
us. The competition that I worry most about in
many cases hasnt been created yet. Its a new
company, a new technology, a new business
model that looks at this blurring between
online and offline...
PwC 13
Growth
Challenges for your business, things to consider

Finding growth in a disrupted world
What changes are you making to

your growth strategy in emerging
and frontier economies to take into How are you rethinking your business
account key structural and political in light of new entrants?
issues in these countries?
In what ways are you using How widely are you looking to see
information to assist in making how your industry could be
strategic and risk decisions? disrupted? How well are you
assessing the impact of cross-sector
competition, emerging business
models and new technologies, for
example?
PwC 14
So what are CEOs doing?
Three interdependent approaches for success
Technology Partnerships Diversity
Investing in digital Engaging in alliances Demanding talent

technologies for with unlikely partners with broader skills
growth
PwC 16
1 Technology
Digital technologies are creating new opportunities for growth
PwC 17
Technology
Investing in game-changing digital technologies

Mobile
technologies
Tech CEOs top five strategic technologies:

1. Cybersecurity tools Data mining
Internet of
and analysis
Things
2. Analytics
89% 88%
3. Mobile technologies Cybersecurity
4. Internet of Things 85%
5. Cloud computing 3D printing
89% 35% Cloud

In fact, the top five digital technologies computing
were universal across CEOs in all 45%
industries.
Robotics
84%
55%
56% 73%
Q: How strategically important are the following categories of Battery and power Socially enabled
digital technologies for your organisation? technologies business processes
18th Annual Global CEO Survey Key findings in the technology industry Wearable February 2015
PwC computing 18
Technology
and where they see results

Operational
efficiency
These are areas where technology 91%

CEOs are seeing the best return Internal/external
collaboration
on digital investment.
Data and data
analysis
88% 85%
Innovation
capacity
Digital trust
including
cybersecurity 85% 84% Customer
experience
82%
Q: To what extent are digital technologies creating value for

your organisation in the following areas? (Respondents who
stated quite high value or very high value)
PwC 19
Technology
Recipe for return on digital
Factors technology CEOs say

will help them get the most
90%
Need to champion the
out of digital investments. use of digital
technologies
themselves
91%
85% Need to have a clear
vision of how digital
technologies can help
Need to have a well achieve competitive
thought-out plan, advantage
including measures
of success
Q: How important are the following factors in helping your

organisation get the most out of its digital investments?
(Respondents who stated very important or somewhat
important)
PwC 20
Technology
CEOs speak
On how digital technologies are creating new opportunities for growth
So my sense is that the next-generation

Michael Dell competition, the next generation of successful
Chairman and Chief Executive Officer companies, whether they are transformations
Dell Inc., US
of existing companies or completely new ones
that emerge, will come at this intersection of
taking traditional processes and activities and
The instinct when something new shows up is completely rethinking them, reinventing them
to say, How do we bolt this on to the old way on the basis of computing and digital
we were doing it and deliver some incremental technologies.
improvement? What you really have to do is
rethink the problem and say, Now that we
Dr. Vishal Sikka
have all these new tools and new techniques, Chief Executive Officer and Managing Director
how can we solve the problem in a Infosys, India
fundamentally different way?
PwC 21
Technology

Leveraging digital technologies
What are you doing to

What technologies do your ensure that youre
customers, partners and other investing in the right
stakeholders use and value, digital technologiesand
and how do they use those using them most
technologies? effectively?
How are you maximising the

use of data analytics to
In what ways does your deliver customer value?
business and operating model
need to change to fulfil
evolving customer needs? How are you ensuring that
your information assets
are as secure as possible?
PwC 22
2 Partnerships
Convergence is driving alliances with unlikely partners
PwC 23
Partnerships
Convergence is driving alliances with unlikely partners

Over 60% of tech companies
plan to grow by entering into 77% Customers
strategic alliances, a 13%
increase from the prior year.
74% Suppliers
A similar percentage (62%) of
tech CEOs are partnering with Non-governmental 36%
or are considering partnering organisations
63% Business networks,
with competitors. Government 43%
clusters or trade
organisations
Academia 56%
62% Competitors
Q: Are you currently engaged with or considering engaging Firms from 58%
with any of the following types of partners through joint
other industries 61%
ventures, strategic alliances or informal collaborations?
Respondents who said 'yes' or 'considering' Start-ups
PwC 24
Partnerships
CEOs speak
On partnering with competitors
we should not be too fixated in any way on

T.J. Rodgers looking at ones traditional markets or
Founder, President and Chief Executive Officer traditional competitors, but looking forward at
Cypress Semiconductor Corporation, US
new opportunities and potential ways of
partnering.
Partnering where you cooperate but you also
compete - has big advantages. We have several Kimmo Alkio
deals where we get, for example, access to low cost President and CEO
Tieto, Finland
in return for training people, access to a market in
return for teaching people how to design chips. In
China, we're partnering with a manufacturing
company so we can bring out a product that
includes their product and our product in it.
PwC 25
Partnerships

Developing diverse and dynamic partnerships
What types of
organisations are you
collaborating with? Do
How are you leveraging they include those outside
partnerships to enhance your industry, or those
your organisations core outside the private sector?
capabilities?
In what ways are you

harnessing the power of
collaborative technologies?
What can you learn from
your collaborative
networks in order to How are you ensuring that
deliver new value to your partnerships are
customers? mutually beneficial and
aligned in objectives?
PwC 26
3 Diversity
Demanding talent with broader skills
PwC 27
Diversity
Tech CEOs plan to increase headcount in 2015
Tech CEOs say 2015 headcount will

55%
27%
16%
Remain the
Decrease Increase
same
Q: Do you expect headcount in your company to increase,
decrease or stay the same over the next 12 months? (%)
Note: 2% responded they dont know
PwC 28
Diversity
Demanding talent with broader skills

As a consequence of industries
converging, tech CEOs are
changing the skill profile of
the people theyre hiring. Equip
Look for a
employees
Three in four (78%) tech CEOs with new 81% 78% much broader
range of skills
say they are looking for a skills
much broader set of skills

than in the past. And nearly as Skills
many tech CEOs (73%) report Search
that they actively search for
talent in different countries, 83% 73%
Search in different
Use multiple
industries and demographic channels
geographies, industries,
segments. demographics
(including
online and social
Q: To what extent do you agree or disagree with the following networks)
statements about your organisations talent activities? (% who
agree)
PwC 29
Diversity
CEOs speak
On deploying diversity of talent
Today, a company without a global workforce
is at a significant disadvantage, and that
means you have to have diversity, people who
can interact in all cultures and all
environments and understand what
consumers want and need, as well as
Michael Dell understand how people think about the value
Chairman and Chief Executive Officer of different solutions. Diversity is a
Dell Inc., US
fundamental underpinning of a successful
company.
We want access to all the worlds talent, and weve
found tremendous value in having a diverse set of D. Mark Durcan
ideas and opinions and insights integrated into our Chief Executive Officer
Micron Technology, Inc., US
business.
PwC 30
Diversity

Employing the right mix of talent
How are you ensuring that

your organisation has
How are you getting the
access to the skills it needs
visibility that you need to
now and will need in the
ensure that skills are being
future?
deployed effectively in your
organisation?
What strategies do you

have in place to ensure
that you are looking as
Are you measuring how widely as possible for
diversity and inclusiveness talent?
contribute to your bottom
line? And assessing their What measures of
impact on the capabilities diversity are important to
you have or need to develop? help your organisation
achieve its goals?
PwC 31
Questions?
PwC 32
Contact us
Raman Chitkara
Global Technology Industry Leader
T: 1 408 817 3746
E: raman.chitkara@us.pwc.com
Rod Dring Australia Werner Ballhaus Germany Yury Pukha Russia

T: 61 2 8266 7865 T: 49 211 981 5848 T: 7 495 223 5177
E: rod.dring@au.pwc.com E: werner.ballhaus@de.pwc.com E: yury.pukha@ru.pwc.com
Estela Vieira Brazil Sandeep Ladda India Greg Unsworth Singapore

T: 55 1 3674 3802 T: 91 982 026 3630 T: 65 6236 3738
E: estela.vieira@br.pwc.com E: sandeep.ladda@in.pwc.com E: greg.unsworth@sg.pwc.com
Christopher Dulny Canada Masahiro Ozaki Japan Philip Shepherd UAE

T: 1 416 869 2355 T: 81 3 5326 9090 T: 97 1 43043501
E: christopher.dulny@ca.pwc.com E: masahiro.ozaki@jp.pwc.com E: philip.shepherd@ae.pwc.com
Jianbin Gao China Hoonsoo Yoon Korea Jass Sarai UK

T: 86 21 2323 3362 T: 82 2 709 0201 T: 44 0 1895 52 2206
E: gao.jianbin@cn.pwc.com E: hoonsoo.yoon@kr.pwc.com E: jass.sarai@uk.pwc.com
Pierre Marty France Ilja Linnemeijer The Netherlands Pierre-Alain Sur US

T: 33 156 57 58 15 T: 31 88 792 4956 T: 1 646 471 6973
E: pierre.marty@fr.pwc.com E: ilja.linnemeijer@nl.pwc.com E: pierre-alain.sur@us.pwc.com
PwC 33
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www.pwc.

One global village

Technology industry key findings

Click here to view the video interview

Click here to view the video interview

Click here to view the video interview

Technology Partnerships Diversity 176

Revenue Subsector Geography

US$0 to US$100M Computers & Networking

Strong confidence in the global economy

Optimism about growth

Q: How confident are you about your companys prospects

Tech CEOs see some of the G7 economies as poised for accelerating

2014 38% 37% 17

More optimism towards growth opportunities and less concern

74% see more

Q: How much do you agree/disagree that there See more opportunities

Causes for concern

2014: 56% 2014: 59% 2014 : 68%

Disruption and convergence continues to redefine industry

With barriers to entry 71% increasingly compete in new

Cross-sector competition expected to come from professional and

Which industry do tech CEOs Professional and

Professional and business Communications, 29%

Healthcare, pharma 13%

Technologys influence on other industries continues to grow

Banking & capital Power and utilities Communications Entertainment &

Q: From which industry or industries outside of your own, if

Challenges for your business, things to consider

What changes are you making to

Technology Partnerships Diversity

Investing in digital Engaging in alliances Demanding talent

Investing in game-changing digital technologies

Tech CEOs top five strategic technologies:

89% 35% Cloud

and where they see results

These are areas where technology 91%

Q: To what extent are digital technologies creating value for

Recipe for return on digital

Factors technology CEOs say

Q: How important are the following factors in helping your

So my sense is that the next-generation

fundamentally different way?

Challenges for your business, things to consider

What are you doing to

How are you maximising the

Convergence is driving alliances with unlikely partners

we should not be too fixated in any way on

Challenges for your business, things to consider

In what ways are you

Tech CEOs plan to increase headcount in 2015

Tech CEOs say 2015 headcount will

Note: 2% responded they dont know

Demanding talent with broader skills

much broader set of skills

Challenges for your business, things to consider

How are you ensuring that

What strategies do you

Rod Dring Australia Werner Ballhaus Germany Yury Pukha Russia

Estela Vieira Brazil Sandeep Ladda India Greg Unsworth Singapore

Christopher Dulny Canada Masahiro Ozaki Japan Philip Shepherd UAE

Jianbin Gao China Hoonsoo Yoon Korea Jass Sarai UK

Pierre Marty France Ilja Linnemeijer The Netherlands Pierre-Alain Sur US