Companies in this industry provide services such as software support, computer systems design, and data processing facilities management. Major companies include Computer Sciences Corporation, Xerox, and the technology consulting arms of IBM and Hewlett-Packard (all based in the US), along with Cap Gemini (France), Fujitsu (Japan), NTT Data (Japan), and Tata Consultancy (India).
Worldwide spending on IT services and products is about $3.5 trillion annually, according to Gartner. Major exporters of computer services include the EU, India, the US, Canada, and Israel, according to the World Trade Organization.
The US information technology (IT) services industry includes about 135,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $360 billion.
Demand for IT services is driven by rapid technological advances, but spending depends on the health of the US 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...