IT Industry Overview
Welcome to IT world!
Information Technology (IT) is the fastest growing industry in the economy, with employment to increase 86 percent between 2000 and 2010. Yes, 86%, is that amazing?
It is great to be in IT. IT industry is the right choice for professional career advancement. Even in a down economy, IT products and services are still in high demand. All organizations today rely on computer and information technology to conduct business and operate more efficiently.
1. Products and Services
IT industry makes software and hardware products such as:
- Consumer software (Microsoft Office, Adobe Photoshop)
- Shrink-wrapped software tools (Visual Basic, PowerBuilder)
- Prepackaged business software (ERP, CRM)
- Enterprise database software (Oracle, DB2)
- Middle tire products (WebLogic, WebSphere)
- Operating and networking systems (Windows, UNIX, Linux)
- Computer hardware and network equipments
Professional services offered within this industry include:
- Customized computer programming services.
- Applications and systems software design.
- Data processing, preparation, and information retrieval services, including online databases and Internet services.
- Integrated systems design and development, including e-business application system implementation.
- Enterprise database management
- Computer operating systems and network administration.
- Business intelligence, decision support, and knowledge management.
- Onsite computer facilities management and maintenance; repair of computers and peripheral equipments.
- Software as a service (SaaS), cloud host-based computing.
- A variety of specialized consulting services.
Now, let's take a closer look on a few hot spots among the industry's products and services:
Electronic business (e-business) is any process that a business organization conducts over a computer-mediated network. Electronic commerce (e-commerce) is that part of e-business that involves the buying and selling of goods and services. With the growth of the Internet and the expansion of electronic commerce, some service firms specialize in developing and maintaining websites for client companies. Others create and maintain corporate Intranets or self-contained internal networks linking multiple users within an organization by means of Internet technology.
E-business service firms design sophisticated computer networks, assist with upgrades or conversions, and engage in continual maintenance. They help clients select the right hardware and software products for a particular project, and then develop, install, and implement the system, as well as train the client's users. Service firms also offer consulting services for any stages of development throughout the entire process, from design and content development to administration and maintenance of site security.
Services on security
This widespread use of the Internet and Intranets also has resulted in an increased focus on security. The robust growth of electronic commerce highlights this concern, as firms seek to attract as many potential customers as possible to their websites. Security threats range from damaging computer viruses to online credit card fraud. Services outsourced to security consulting firms include analyzing vulnerability, managing firewalls, and providing intrusion and antivirus protection.
Information services include data preparation and processing services, as well as information retrieval services. Establishments may provide payroll processing, credit reporting, data entry services, and optical scanning services, as well as the leasing of computer time. Usually, information is collected from the client's databases, processed, and passed to other online subscribers, to contracted users, or back to the client. With the Internet and electronic business creating tremendous volumes of data, there is growing need to be able to store, manage, and extract data effectively. Establishments in these sectors also include a number of Internet service providers. These companies provide access to end users of the Internet who usually subscribe for a set fee.
Prepackaged software establishments develop operating system software as well as word processing and spreadsheet packages, games and graphics packages, data storage software, and Internet-related software tools such as search engines and Web browser. Some may install the software package on a user's system and customize it to the user's specific needs. Programming service firms may be hired to code large programs or to get new systems up and running. Programming service firms also may update or reengineer existing systems.
Hardware services for computers and other data processing equipment include facilities management and operation, rental and leasing, maintenance and repair of computers and peripheral equipment. Such services usually are offered on the customer's site, although, in the case of maintenance and repair work, equipment may be taken to repair shops and replacements left for temporary use. Miscellaneous services establishments include database development firms engaged in building and maintaining databases of critical information. Miscellaneous services also include disk and diskette conversions, hardware requirements analysis, and consulting on a contract or fee basis.
There were about 2.1 million wage and salary jobs, and an additional 164,000 self-employed workers, making the industry one of the largest in the economy. Most self-employed workers are independent consultants. Since the late 1980s, employment has grown most rapidly in the computer programming services, information services, and prepackaged software segments of the industry. From 1990 to 2000, about 368,000 jobs were created in programming services, 196,000 in information retrieval services, and another 187,000 in prepackaged software.
Providing a wide array of information services requires a diverse and well-educated workforce. The majority of workers in this industry are professional and technical workers, such as computer programmers, software engineers, systems analysts, database administrators, web developers, and e-business specialists. Professionals with specialized technical background account for over 60 percent of the jobs in the industry, reflecting the emphasis on high level technical skills and creativity.
How old are they?
IT industry's workforce remains younger than most, with large proportions of workers in the 25 to 44 age range. Relative to the rest of the economy, there are significantly fewer workers 45 years of age and older. The following table shows distribution percentage of employment in IT industry based on the data from U.S. Department of Labors.
|Age Group||IT Industry (%)||All Industries (%)|
|65 and older||0.7||3.0|
This data reflects the industry's explosive growth in employment since the early 1980s. The huge increase in employment afforded thousands of opportunities to younger workers possessing the newest technological skills.
How much do they make?
Professionals in IT industry make more than the national average. The average monthly income for junior level non-supervisory workers in IT industry is $3,600, significantly higher than the average of $1,900 for all industries. This reflects the concentration of professionals and specialists who often are highly compensated for their specialized skills or expertise.
Given the pace at which technology advances in this industry, earnings can be driven by demand for specific skills or experience. Workers in segments of the industry that offer only professional services have even higher average earnings because there are fewer less skilled, lower paid workers in these segments.
As one might expect, education and experience influence earnings as well. For example, annual earnings of computer software engineers ranged from less than $42,710 for the lowest 10 percent to more than $106,680 for the highest 10 percent in 2000. Managers usually earn more because they have been on the job longer and are more experienced than their staffs, but their salaries, too, can vary by level and experience. Accordingly, annual earnings of computer and information systems managers ranged from less than $44,090 for the lowest 10 percent to more than $127,460 for the highest 10 percent in 2000. Earnings also are affected by other factors such as size, location, and type of establishment, hours and responsibilities of the employee, and level of sales.
Workplaces in IT industry are much diversified. IT career opportunities are constantly offered with both large and small firms in all industries and sectors. According to U.S. Department of Labors, the majority of IT jobs are found in establishments that employ 50 or more workers.
Many small establishments in the industry are startup firms that hope to capitalize on a market niche. In fact, the average establishment in IT is relatively small; approximately 80 percent of establishments employed fewer than 10 workers. Working for small start-ups had made many IT professionals a fortune in the past years. However, in current market conditions, you'd better work with sizeable established firms.
4. Industry Prospective
In IT, the future is brilliant!
IT industry has grown dramatically over the past decade. Wage and salary employment is expected to grow about 86 percent by the year 2010, making this the fastest growing industry in the U.S. economy. Given the rate at which the industry is expected to grow and the increasing complexity of technology available, job opportunities will be excellent for most workers. The best opportunities will be for professional and technical occupations, reflecting their rapid growth and the continuing demand for higher level skills to keep up with changes in technology.
Growth driven by demand on technology
An increasing reliance on information technology, combined with falling prices of computers and related hardware, means that individuals and organizations will continue to turn to computer and data processing service firms to maximize the return on their investments in equipment and to fulfill their growing computing needs. Such needs include the expansion of electronic commerce, a growing reliance on the Internet, faster and more efficient internal and external communication, and the development of new technologies and applications. With increasing global competition and rising costs, organizations must be able to obtain and manage the latest information in order to make business decisions.
High growth sectors
Within the industry, projected growth varies by sector. Among the fastest growing sectors should be:
- Web-based applications
- E-business solutions
- Enterprise system integration services
- Prepackaged software
- Security products and services
- Consulting on specialized technologies
- Big data and business intelligence
- Cloud computing services
- End-user support
The demand for networking and the need to integrate new technologies will drive the demand for consulting and integration. Advances in software technology and expanding Internet usage will increase the need for software support and services.
Prepackaged software has historically grown very rapidly, and will continue to grow as individuals and establishments try to capitalize on the latest improvements.
As more individuals and organizations are conducting business electronically, the importance of maintaining system and network security will increase. Security related products and services are expected to boom.
Demand for support services should spur growth in areas such as help-desk outsourcing.
New growth areas will continue to arise from rapidly evolving technologies and business forces. The rate at which the Internet has expanded demonstrates the potential effects of as yet unknown technological developments and the tremendous room for growth.
The impact of Internet
The expansion of the Internet and the proliferation of websites have created a demand for a wide variety of new products and related services, including:
- Internet and web based software
- Online services and e-commerce
- Internet infrastructure design and services
- Commercial and corporate website development
- E-business solution services and consulting
Yet, the way the Internet is used is constantly changing, and so are the products, services, and personnel required to support new applications. Expanding electronic commerce, for example, has changed the way companies transact business, enabling markets to expand and an increasing array of services to be provided to customers.
Business-to-business commerce is automating many steps in the transaction of business between companies, allowing many firms involved to operate more efficiently. And as the amount of computer-stored information grows, organizations will continue to look for ways to tap the full potential of their vast stores of data. Demand for an even wider array of services should increase as companies continue to expand their capabilities, integrate new technologies, and develop new applications.
5. Industry Driving Force
Who drive IT industry to what directions? A few giant companies lead the industry by dominating the market of products and services. With huge user base and rich capital, these companies are able to setup rules, establish standards, build infrastructure and framework, and research emerging technologies.
Here are the ten most influential companies in IT industry:
Microsoft dominates everything on Windows - the most popular operating system in today's business world. Its database product SQLServer is moving toward enterprise level. The .NET development framework will compete with J2EE platform head to head. Recently, Microsoft Business Solutions unit is catching up the market on ERP, CRM, and business intelligence.
Oracle is the database king. Oracle will continue make the standards and specifications on future relational database technologies. Oracle has moved beyond database to enterprise computing and integration. In addition to its flagship Oracle10g, Oracle products also include Java development tool, application server, ERP, CRM, business intelligence, and more.
By absorbing PeopleSoft and Siebel recently, it has become a unbeatable enterprise software powerhouse:
PeopleSoft offers broad ERP and CRM product line including Financial, HR, and Application Integration. It provides PeopleTools development environment to build, deploy, maintain, and upgrade business applications. PeopleSoft poses the strongest threats to Siebel's CRM market dominance. Not long before being taken by Oracle, PeopleSoft's J.D. Edwards Acquisition had made a big wave in the ERP market.
Siebel remains the king in the CRM market. Its latest release, pricey Siebel 7, is expanded to include e-sales, partner relationship management, employee relationship management and more. As the leader in high-end market, Siebel offers 200 application modules and 20 industry-specific versions.
UNIX/Linux: Sun Microsystems (www.sun.com) used to be a big player providing the most UNIX servers; now it is in the hand of Oracle. Sun/Oracle's Solaris operating system is the most popular UNIX platform. Skills and experience with the UNIX system and the newer Oracle Linux make system administrators highly valuable.
Java: The most significant impact in IT brought by Sun to Oracle is the Java/J2EE technology. J2EE (now called Jave EE) is the only powerful development platform that can fight with Microsoft and may win.
WebLogic: Before acquired by Oracle, BEA Systems (www.bea.com) used to have the key product, WebLogic, which leads the application server market. But that's not all. BEA was making itself the industry's leading provider of business integration software solutions. BEA's new technologies had set the standard of the Foundation for enterprise application infrastructure. Now they are all within Oracle.
IBM is not only a computer hardware maker for huge server machines, but also a leading vendor of software and consulting services. IBM DB2 is likely winning the database game over Oracle. IBM WebSphere runs on top of the application server market. IBM's other software products include Lotus, Tivoli, and Informix. IBM recently acquired Rational Software to further enhance its software business.
Cisco builds infrastructure of the IT world. Cisco's switches and routers are network administrator's daily toy to play. In addition, Cisco offers advanced technologies including wireless/mobility network and IP telephony. Cisco's integrated security solution is a big deal for IT industry and IT professionals specified in networking area.
In addition to the Big 5, other significant players and rule makers in the industry include:
This Germany based company is the number one in ERP market. Its R/3 ERP suite is the most comprehensive ERP product. The core of the suite, mySAP ERP, offers a comprehensive solution for managing financials, human resources, operations, and corporate services.
Sybase (www.sybase.com) is now part of SAP. Sybase offers database software (Adaptive Server), application server (EAServer), and development tools (PowerBuilder). Sybase is strategically positioning itself as the enterprise business integration leader. New technologies from Sybase include e-business infrastructure, mobile/wireless server, and vertical solutions.