2025 tech industry trends: Global business outlook

Amid evolving tax and regulatory rules, increasingly complex data security and privacy concerns, economic and geopolitical instability, and much more, global businesses must constantly adapt their strategy for the future. The pace of change is elevated further for the technology industry as companies face pressure to stay competitive and keep up with innovation by embracing trends in technology.

As the global tech industry landscape continues to shift, technology companies operating internationally must answer one critical question: What does it look like to develop a business strategy for the future?

Here are five key trends that will shape the global tech industry in 2025 and how you can take advantage of what’s to come to strategically scale and grow your business.

1. The battle for global market share in the tech industry

International expansion opens the door for tech companies to access new markets, customer bases, and talent abroad. But the road to enter global markets can be complex. The globalization of the tech industry has occurred in tandem with the rise of Big Tech. Through strategic investments, acquisitions, and partnerships, Big Tech has established extensive infrastructures, such as data centers and cloud services, that support international operations and enable seamless connectivity and data exchange across borders. Tech startups and middle-market tech companies have had to scale and adapt to the globalization strategies of Big Tech or risk being outpaced by competitors. This has shaped the global technology industry into a fiercely competitive landscape, with Big Tech, emerging startups, and middle-market players vying for dominance.

In addition to chasing market share from Big Tech, tech businesses encounter diverse regulatory environments and local market dynamics as they attempt to enter global markets. For instance, each country has unique regulations regarding data privacy, cybersecurity, and consumer protection, which means you’ll need to adapt your strategies and operations to meet local legal requirements. An incomplete expansion strategy that fails to consider these elements can challenge your ability to access new markets and increase the operational costs of establishing local infrastructure. In contrast, a successful global expansion strategy should incorporate a detailed market analysis, identify supply chain and sourcing opportunities, and assess the local tax landscape, such as rates and regulations.

For middle-market tech leaders, performing a market analysis and developing a comprehensive entry strategy are critical elements to identify the viability of pursuing expansion. The right global expansion partner can help you navigate these complexities.

2. The tech talent gap and global recruitment strategies

Identifying and retaining the right talent is equally critical for tech companies entering new markets. Tech companies are notoriously asset-light — and lack of expertise and capacity can hamper due diligence processes and market entry as you pursue expansion goals. Seeking talent abroad can fill this gap.

If you’re hiring employees abroad, you need a comprehensive hiring infrastructure that’s compliant with local regulations and possesses the right business structure to support your goals. A Professional Employer Organization (PEO) is often used as a tool to minimize the challenges of hiring abroad by outsourcing payroll and compliance to a third-party entity. For others, hiring employees directly or as international contractors can be more favorable depending on your business needs, employment laws of the target market, and cost considerations.

Ultimately, tech companies pursuing international expansion need to ask themselves if they’ve identified the right infrastructure in place to support hiring abroad. Without it, companies could expose themselves to noncompliance and further delay expansion efforts.

3. Increased focus on data security and privacy

It’s no surprise that data privacy concerns will remain a key focus area for tech in 2025. Whether you’re providing software as a service (SaaS) solutions or managing a company’s IT infrastructure, you likely process vast amounts of customer data and know it better than anyone: a data breach can cost your organization its users and business and irreparably damage your reputation. Pursuing compliance best practices with local and global regulations, investing in data protection measures, and establishing companywide data governance policies is critical. 

In the United States, SOC reporting has become the gold standard for companies looking to strengthen their internal control structure and security compliance posture. A SOC report can strengthen trust with customers by providing a third-party assessment of the risks associated with using an organization, such as a SaaS, third-party administrator, or payroll processor.

Tech companies with operations in the EU, or that process data of individuals in the EU, should ensure their business is compliant with General Data Protection Regulation (GDPR) standards. GDPR establishes requirements on how companies should process, store, and transfer data of EU individuals. Failure to comply can risk more than your reputation — it can mean hefty fines depending on the severity of the violation. The bottom line: If you’re pursuing international markets, your business is going to face inconsistent and complex data security rules across jurisdictions, and you need to be ready for it.

4. Uncertainty in tech M&A: Volatile and competitive markets

The technology industry offers investors a lucrative and attractive opportunity to earn high returns and diversify one’s portfolio.

When you’re considering a sale, a high and accurate valuation is crucial to position your tech business for success. From financial performance and market position to operational efficiency and internal controls, there are a host of considerations to consider before you get to the deal table. 

But the tech industry is particularly challenged by a volatile and highly competitive market, which complicates the ability for organizations to define their competitive advantage and growth potential to investors. And if you’re pursuing a cross-border M&A, the complexity rises — your process abroad may look different from what you’ve previously pursued in the United States. Executing a proof of concept in international markets can be a valuable first step prior to entering a market transaction internationally. And as you move deeper into the deal cycle, performing proper due diligence across your financial, accounting, and tax structures is equally critical.

Ultimately, a deliberate, thoughtful approach to the sale with a buy-side perspective via a thorough due diligence checklist or more targeted assessments can help you avoid seller risks and support your value creation plan.

5. A complex global tax compliance landscape

Whether your tech company has established operations internationally or is exploring new domestic markets, there are important tax implications you should consider. The landscape of tax regulations, credits, and incentives is vast and complex, and identifying which opportunities apply to your business isn't straightforward. Here are our top questions to secure your tax position in 2025.

• Have you reviewed your business activities for permanent establishment risk? If you think your business may have a permanent establishment (PE), ensuring you’re in compliance with local tax rules is critical. Avoid the tax and legal implications of a PE by regularly reviewing your business activities in foreign countries, including business transactions, employee presence, and physical presence.
• Are you monitoring your nexus footprint? The tech industry is known for distributed (often remote) workforces, allowing access to wider, global talent pools and offering flexibility to staff. However, remote workers can constitute a nexus for business taxes, so monitoring your state filing footprint is crucial. Online sales, inventory, and business partnerships in other states can also place tax obligations on your organization — which is why a proactive approach to navigating state-specific tax rules is key.
• Have you taken advantage of R&D tax credits? A critical part of staying ahead of the innovation curve is investing in research and development (R&D) of your product or service. If your company invests in R&D in the United States, you may be eligible for a tax credit on qualified research expenses. If you’re considering offshoring your R&D activities, make sure you consider the impacts of the U.S. R&D capitalization requirements under Section 174 as well as the impact of forgoing the R&D tax credit. 
• Are you in compliance with transfer pricing rules? Tech companies need to ensure accurate transfer pricing and compliance with tax authorities as they enter new markets locally and abroad. Tech is particularly challenged by intellectual property (IP) complexities in transfer pricing, which can be difficult to price depending on the nature of the transaction and location of the IP. As you pursue international markets, it’s critical that your expansion strategy aligns with your transfer pricing strategy to avoid excessive costs or penalties.
• Have you identified Inflation Reduction Act tax credit opportunities? Tech companies, particularly those in the cleantech sector have an opportunity to reduce their tax exposure as well as operational costs through investment in sustainable technologies via Inflation Reduction Act (IRA) tax credits. Review the available tax credits and incentives afforded by the IRA here.

The global tech landscape is unpredictable, but two things are certain: disruption and evolution. As you look to scale your business, ensure your expansion strategy is holistic and mindful of emerging challenges and opportunities in the tech industry. Getting ahead of the top trends in the global technology industry can position your business for success and growth in 2025.