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What Makes a Great Software Company? Plus, an Update on Constellation Software (CSU.TX)

Chit Chat Stocks

NOTE

Acquisitions Accelerate Growth

To sustain growth and justify an escalating market cap, a company must continue its aggressive acquisition strategy, having purchased over 650 companies since 2016, with record acquisition numbers in recent years. The acquisition spending has notably increased from $236 million in 2015 to $2.27 billion in 2023, indicating a scale-up in operations and market presence. This trend points to a future where similarly large acquisitions will become commonplace, particularly with the rising number of specialized vertical market software companies. As these small niche companies emerge, the cycle of acquisition will likely continue, especially as many face financial limitations or owner burnout.

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