Delegates from leading Irish-based tech firms attended an event in Dublin today themed ‘Successful Scaling’ which was run by Technology Ireland in association with Bank of Ireland. At the event, delegates heard insights in terms of why Ireland’s technology sector is among the most dynamic areas in the Irish economy. Bank of Ireland revealed that it had increased its lending to Irish Technology firms by 150% in 2017 and forecast that projected revenues of indigenous tech firms are set to grow by 20% in 2018 to €3.5bn.

1. May 2018
Adrian Mullett
Head of Technology Sector

7. Characteristics
Target Financial
Metrics
Non Financial
Metrics
Risks
Enterprise
Technology Sales
Managed Service
Provider (MSP)
Software as a
Service (SaaS)
E-Commerce
• Small amount of
high-value customers
• References are key
• High barriers to entry
• Long sales cycle
• Discounts common
• EBITA margin >15%
• R&D (as % of turnover)
is >10%
• Pipeline conversion
• Support and
maintenance
• level as % of license of
• >15%
• Customer concentration
• Debtor quality
• Relatively labour
intensive
• Market consolidation
• Customers looking for
capability around cloud,
security and digital
• EBITA margin > 5%
• Customer satisfaction
• Workforce utilization of
>75%
• Service level agreements
• Partner certification
• Workforce Churn
• MSP can have a thin margin
• Growing footprint of telcos
in IT services
• Threat of lower-cost larger
players
• Typically requires large
number of customers
with a relatively simple
ongoing need
• High sales & marketing
expenses
• Gross Margin> 50%
• Revenue growth of
20%+
• Monthly Churn <5%
• Cost of customer
acquisition
• Lifetime value of customer
(LTV)
• High upfront costs with
long thin revenue tail
• Critical to monitor
customer attrition
• Heavy marketing spend
• Focus on business
model innovation
• Revenue growth of
20%+
• EBITA margin > 2%
• Bounce rate <40%
• Conversion rate >1.5%
• Fraud< 1%
• Cost per Click (CPC)
as % of traffic
• Search engine
optimization (SEO)
• Affiliate costs
• Low barriers to entry
• Data security