Profit will steady as major companies continue to shift toward higher value-added offerings
Los Angeles, CA (PRWEB) April 17, 2012
The IT Consulting industry is made up of firms that help companies design and implement information technology (IT) systems and software. Due to the low capital intensity of this industry, the majority of industry operators are nonemployers. Over the five years to 2012, demand for all-inclusive consulting services has inspired a rash of merger and acquisition (M&A) activity among larger players, while smaller companies still enter the industry, according to IBISWorld industry analyst Lauren Setar. As a result, industry enterprises are growing at a slower rate than establishments.
Over the five years to 2012, industry revenue is expected to grow 3.3% annually on average to $327.5 billion. A strong period of industry growth occurred in 2007, when the economy was in an upswing. Demand for IT consulting from the financial services industry decreased, while demand from the government sector increased. Aided in part by this public-sector spending since 2007, revenue has grown in all years except 2009. Also, the industry's IT maintenance segment buoyed revenue some since business owners were reluctant to cut back on this service, which is vital to their efficiency, Setar said. In 2012, industry revenue is expected to increase 3.2% to $236.9 billion. Growth in integrated systems sales, combined with all-inclusive consulting services, has increased industry profit from 6.6% in 2007 to 7.5% in 2012. The revenue decline in 2009 was at the height of the recession and due to slowed business activity and an increase in bankruptcies. As many US businesses went bankrupt, the pool of potential clients was drastically reduced.
In the five years to 2017, industry revenue is expected to grow. As the economy recovers, improving business sentiment and corporate profit levels will drive industry performance. The increase in M&A activity in other industries over the next five years will help IT consultants; with more consolidations, companies will require assistance in the integration of accounting, information storage and other systems. Over the next five years, profit is projected to remain steady as major companies continue to shift the balance of their services toward higher value-added offerings, but rising competition among major players will increase price competition. Further, as advances in cloud computing gain commercial viability, demand for this industry's services will grow. For more information, visit IBISWorld’s IT Consulting in the US industry report page.
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IBISWorld industry Report Key Topics
The IT Consulting industry includes firms that focus on providing the following services to client companies: writing, testing and supporting custom software; planning and designing integrated hardware, software and communication infrastructure; and on-site management of computer systems and data processing facilities. This industry excludes packaged software publishers and off-site data processing and hosting services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.