01 Apr IT Industry Outlook 2019
CompTIA Research Report, January 2019
The global information technology industry is on pace to reach $5 trillion in 2019, according to the research consultancy IDC. The enormity of the industry is a function of many of the trends discussed in this report. Economies, jobs, and personal lives are becoming more digital, more connected, and increasingly, more automated. Waves of innovation build over time, powering the technology growth engine that appears to be on the cusp of another major leap forward.
The United States is the largest tech market in the world, representing 31% of the total, or approximately $1.6 trillion for 2019. In the U.S., as well as in many other countries, the tech sector accounts for a significant portion of economic activity. CompTIA’s Cyberstates report reveals the economic impact of the U.S. tech sector, measured as a percentage of gross domestic product, exceeding that of most other industries, including notable sectors such as retail, construction, and transportation.
Despite the size of the U.S. market, the majority of technology spending (69%) occurs beyond its borders. Spending is often correlated with factors such as population, GDP, and market maturity.
Among global regions, Asia-Pacific is the largest, accounting for approximately one of every three technology dollars spent worldwide. Many APEC countries enjoy the twofold effect of closing the gap in categories such as IT infrastructure, software, and services, along with leadership positions in emerging areas such as robotics. If these patterns hold, APEC will continue to grow its share of the global technology pie at the expense of slower growing markets.
The bulk of technology spending stems from purchases made by corporate or government entities. A smaller portion comes from household spending, including home-based businesses. With the blurring of work and personal life, especially in the small business space, along with the shadow IT phenomenon, it can be difficult to precisely classify certain types of technology purchases as being solely business or solely consumer.
CompTIA projects the global information technology industry will grow at a rate of 4.0% in 2019. The optimistic upside forecast is in the 6.4% range, with a downside floor of 1.5%. This is a broader forecast range than what has been seen in the past couple of years, meaning industry executives see the possibility of more extreme divergence in growth scenarios. To the upside, if customer-buying patterns for core tech products and services maintain, and spending on emerging tech accelerates, growth of 6% or more is attainable. Conversely, a global slowdown in demand, or any slowdown in the adoption of emerging technologies could dampen growth enough to push it towards the 1.5% pessimistic side.
Growth expectations for the U.S. market are in line with the global projection. As the largest tech market in the world, U.S. forecasts and global forecasts are inextricably linked.
CompTIA uses a consensus forecasting approach. This “wisdom of the crowds” model attempts to balance the opinions of large IT firms with small IT firms, as well as optimistic opinions with pessimistic opinions. The results attempt a best-fit forecast that reflects the sentiment of industry executives.
Other factors that influence revenue growth projections include currency effects, pricing, and product mix. The tech space is somewhat unique in that prices tend to fall, which may result in large numbers of units shipped, but modest revenue growth. In 2019 the product mix will be an especially important factor as the high growth rates of emerging categories are expected to more than offset the slow growth mature categories.
CompTIA 2019 Trends to Watch
- Cloud, Edge and 5G Form the Modern Economic Infrastructure
- IoT and AI Open New Possibilities in Ambient Computing
- Distributed Technology Models Challenge Existing Structures
- Stackable Technologies Supercharge Digitization Efforts
- Business of Emerging Technology Prompts Sales Channels Reinvention
- Hyper-personalization Takes Customer Experience to Next Level
- Partnerships Bridge Gaps in New Tech Ecosystem
- Persistent Tech-Worker Shortages Fuel New, Creative Solutions
- Digital-Human Models Begin to Shape the Workplace of Tomorrow
- Technology Professionals Take the Lead in Anticipating Unintended Consequences
- High Tech Increasingly Transforms Low Tech
- Global Tech Hubs Put Spotlight on the Ingredients for Innovation
- Major Trends for IT companies and solution providers:
- The Shift to Strategic IT
- Renewed Focus on Vertical Market Solutions
Emerging Technology Growth Drivers
- Internet of Things (IoT): hardware, software, and connectivity
- SaaS + PaaS (software as a service + platform as a service)
- Robotics and drones
- Augmented reality and virtual reality
- Artificial intelligence (AI) platforms and applications
- Big data / analytics
- Enterprise social software
- Next generation security solutions
The Computing Technology Industry Association (CompTIA) is a leading voice and advocate for the $5.0 trillion global information technology ecosystem; and the more than 50 million industry and tech professionals who design, implement, manage, and safeguard the technology that powers the world’s economy. Through education, training, certifications, advocacy, philanthropy, and market research, CompTIA is the hub for advancing the tech industry and its workforce.