Information Technology Services Industry Overview

  • SIC Code7376
  • NAICS Code541511

Industry Excerpt

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).

Competitive Landscape

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, Ops & 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.
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