The great rebalancing act: Why tech is focused on profitability rather than growth, and why this is good for the industry 3
CURRENT MARKET TRENDS ARE FORCING TECH COMPANIES
TO REEVALUATE THEIR STRATEGIES
Shifting markets and investor expectations are now forcing tech companies to focus on profitability while still delivering on
growth. It's a completely different model. The strategies that defined past success and drove rapid growth will be ill-suited
to meet this profitability challenge. Imagine a world-class sprinter suddenly being forced to run a marathon. For many
companies, it may feel like a daunting and completely different paradigm. But you better not stop running.
AlixPartners surveyed more than 140 tech executives to study how industry leaders are confronting the profitability
versus growth challenge. Not surprisingly, our research shows a pronounced shift in focus toward profitability. 72% of
respondents prioritize profitability over or equal to growth today-up from 56% over the last 24 months. Further, 74% of tech
leaders say this will be the case over the next 24 months (see figure 1A).
Please rate the impact of growth versus profitability on the business. N=146
FIGURE 1A: PERSPECTIVE ON THE BALANCE BETWEEN GROWTH AND PROFITABILITY
Prioritized profitability
over or equal to growth...56%
Last 24 months
Will prioritize profitability
over or equal to growth
Next 24 months
74% Prioritize profitability
over or equal to growth...
However today
72%
Focus on growth Focus on growth and
profitability is equal
Focus on profitability
Please rate the impact of growth versus profitability on the business over the past 24 months
Please rate the expected impact of growth versus profitability on the business in 2024. N=146
FIGURE 1B: SHIFT IN FOCUS FOR GROWTH VS. PROFITABILITY
Past 24 months Next 24 months
44%
27%
29%
36%
27%
38%