Software for Success
Succeeding in today’s world is increasingly about software, whether as a tool to enhance employee productivity, differentiate products or better connect with customers. As a result, many successful companies are investing heavily in software to enhance their operations and competitive positions.

Annual Electricity Use per Capita (3-Year Moving Average) and Real GDP per Capita chart​​​​​

  • Software spending as a percent of technology-related capital expenditures has steadily risen from a miniscule level in 1960 to nearly 50% this year.

  • Among many interesting businesses using software to get ahead is an online retailer of home goods. This forward-looking company is investing aggressively in technologies that allow customers to get 3D views of how furniture would look in their homes and receive personalized product suggestions.

  • Even in the mundane waste management industry, one company has transitioned to a modern, cloud-based enterprise resource planning system. This company can now integrate acquisitions more efficiently and ultimately support its active M&A program, a key growth driver. Additionally, this company is replacing a manual system for routing garbage trucks to a more optimized, software-based system, which makes its collections more organized.

  • By embracing software, companies can stay ahead of their competition and produce durable growth. Investors may wish to seek out companies that are capitalizing on the latest software to advance in the digital revolution underway.

The views expressed are the views of Fred Alger Management, LLC as of November 2019. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, LLC. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares.

Risk Disclosure: Investing in the stock market involves certain risks, and may not be suitable for all investors. Growth stocks tend to be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Technology companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies.​

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