Information Technology Industry Profile

The US information technology (IT) industry includes about 120,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $250 billion. Major companies include Computer Sciences Corporation (CSC), Unisys, and the technology consulting arms of IBM and Hewlett-Packard. The computer facilities management segment of the industry is highly concentrated: the 50 largest companies hold more than 80 percent of the market. The rest of the industry is fragmented: the 50 largest companies hold less than half the market.

Related industries covered in separate profiles include manufacturers of computer hardware, software, and telecommunications equipment, as well as providers of Internet and telecommunications services.

COMPETITIVE LANDSCAPE

Demand for IT services is driven by rapid technological advances, but spending for these expensive products depends on the health of the US economy. The profitability of companies depends on offering 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.

PRODUCTS, OPERATIONS & TECHNOLOGY

IT companies mainly provide consulting, systems integration, data processing, and technology outsourcing services to business customers. Computer systems design, development, and integration services account for about 35 percent of industry revenue; application design and development services, 25 percent; and technical ...