Information Technology Services Industry Overview
Excerpt from Information Technology Services Report
Companies in this industry provide services such as software support, computer systems design, and data processing facilities management. Major companies include Cognizant, DXC Technology (formed through the 2017 merger of Computer Sciences Corporation and Hewlett Packard Enterprise), and the technology consulting arm of IBM (all based in the US), along with Accenture (Ireland), Cap Gemini (France), HCL Technologies (India), Infosys Technologies (India), and Tata Consultancy (India).
Demand for IT services is driven by rapid technological advances, but spending depends on the health of the economy. The profitability of companies depends on technical expertise, innovative services, and effective marketing. Large companies have advantages in broad service offerings and global reach, which give them the ability to provide outsourcing services to big corporate customers. Small companies can compete effectively by specializing in market niches or by partnering with larger companies that want to broaden their mix of services. The US industry is fragmented: the 50 largest companies account for about 40% of revenue.
Products, Operations & Technology
Computer systems design, development, and integration services account for about 35% of industry revenue; application design and development services, 25%; and technical support, 10%. IT services companies help clients use computers, software, and communications systems more efficiently. In addition to providing advice on using computer systems, they frequently recommend hardware and software systems to their customers. Firms provide a variety of associated services, including business function outsourcing, data warehousing, systems planning, enterprise resource planning, and training.