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Global Information Technology Market

Industry Sector

Information Technology

Published

13 September 2012

Author

Matt Bodimeade

Type of News

Market

The information technology (IT) market is both a huge industry in itself and the source of dramatic changes in business practices in all other sectors. The term IT covers a number of related disciplines and areas, from semiconductor design and production, through hardware manufacture (mainframes, servers, PCs, and mobile devices), to software, data storage, backup and retrieval, networking, and, of course, the internet.

The term "information technology" in its modern sense first appeared in a 1958 article published in the Harvard Business Review; authors Leavitt and Whisler commented that "the new technology does not yet have a single established name. We shall call it information technology (IT).

The term has been defined as "the study, design, development, application, implementation, support or management of computer-based information systems." IT is a branch of engineering dealing with the use of computers and telecommunications equipment to store, retrieve, transmit and manipulate data.

Electronic computers, using either relays or valves, began to appear in the early 1940s. The electromechanical Zuse Z3, completed in 1941, was the world's first programmable computer, and by modern standards one of the first machines that could be considered a complete computing machine.

Colossus, developed during the Second World War to decrypt German messages was the first electronic digital computer, but although programmable it was not general-purpose, being designed for a single task. Neither did it store its programs in memory; programming was carried out using plugs and switches to alter the internal wiring.

The first recognisably modern electronic digital stored-program computer was the Manchester Small-Scale Experimental Machine (SSEM), which ran its first program on 21 June 1948.

 

Market Analysis

Summary of sectors within the Global Information Technology Market
Market Segment (Global)Current Market Value ($)Compound Annual Growth Rate (%)Predicted Market Value ($)
Internet of Things (IOT) Market44bn (2012)30.1290bn (2017)
Organic Light-Emitting Diode (OLED) Market4.9bn (2012)32.620.3bn (2017)
Application Server Market7.0bn (2011)17.021.2bn (2018)
Memory Integrated Circuit Market62.0bn (2012)6.385bn (2018)
Electronics Contract Manufacturing Market435bn (2012)9.0670bn (2018)
Analog Integrated Circuit Market20.41bn (2012)9.031.35bn (2016)
Light-Emitting Diodes (LEDs) Market19.5bn (2012)9.931.4bn (2017)
Surface Acoustic Wave Sensors Market1.1bn (2011)11.81.8bn (2016)
Chipless RFID Market1,087mn (2011)29.33,925mn (2016)
Service Robotics Market20.73bn (2012)17.446.18bn (2017)
Conformal Coatings Market8.5bn (2012)1.09.0bn (2017)
Cyber Security Market63.7bn (2011)11.3120.1bn (2017)
Software Defined Networking Market198bn (2012)60.432.10bn (2017)
Industrial Wireless Sensor Networks Market1.610bn (2011)15.583.795bn (2017)
Pico Projectors Market0.49bn (2011)758.12bn (2016)

 

Global spending on the information technology market is expected to have hit the US$3.6 trillion mark during 2011, rising 5.6% on the previous year.

The global IT services market has been forecast to grow at a compound annual growth rate (CAGR) of 5% over the next five years, to reach a market value of US $1,147 billion by 2017.

Growth in global hardware spending in 2011 was predicted to be 11.7% over the 2010 spend of US$375 billion. This is slightly behind the 12.1% growth achieved in 2010, by comparison with the spend for 2009, but it represents a significant upward revision on an earlier prediction of growth of 9.5% for the hardware segment in 2011.

The world healthcare IT market is expected to grow from $99.6 billion in 2010 to $162.2 billion in 2015, at a CAGR of 10.2% from 2010 to 2015. Need to cut healthcare costs, enhance clinical/administrative workflow of hospitals, and huge demand for faster, error-free, efficient healthcare delivery, is fuelling the healthcare provider IT market worldwide. Furthermore, the initiatives taken by the government for adoption of healthcare IT systems globally are also a significant driving force.

One of the biggest growth areas in the information technology market is computer services. In 2010 the total global spend on services amounted to US$793 billion. This value was predicted to have risen by 6.6% through 2011 to US$846 billion, up two percentage points on the forecast it made in March 2011.

Cloud computing continues to be a major factor in corporate spending, which is not surprising when one considers that "the cloud" encompasses servers, storage, networking, and application services. Spending on cloud computing in 2011 was predicted to increase four times faster than IT spending overall.

Worldwide spending on "public cloud" services was around US$74 billion in 2010, comprising some 2% of overall IT spending. This value was anticipated to rise to US$89 billion in 2011, an increase of 20%. By 2015 this spend will have almost doubled, reaching US$177 billion. This will amount to around 5% of total global IT spend.

Computer gaming is becoming an ever-more-important sector of the information technology market. Global spending on gaming will exceed US$74 billion in 2011, up 10.4% from 2010. Of this, software will be worth some US$44.7 billion while the rest is taken up by "the gaming eco-system," which comprises high-end gaming PCs and the online environment for online games, which are expected to be a major growth segment to 2015.

The United States has the most advanced information technology industry in the world. There are more than 100,000 software and information technology (IT) services companies in the US, and over 99% are small and medium-sized firms (i.e. under 500 employees). This total includes software publishers, suppliers of custom computer programming services, computer systems design firms and facilities management companies. The industry draws on a highly educated and skilled US workforce of nearly 2 million people, which has continued to grow over the past decade.

The market holds significant opportunities for industry players due to increasing IT spending in the healthcare, retail, and transportation sectors.

Furthermore, the increasing global demand for systems, software, and services, as well as IT spending by governments, and the banking and financial sectors are likely to boost the global IT services market.

In 2011 Apple's Mac platform passed a global market share of 5% for the first time in 15 years. This is suggested to be down to strong growth from the Asia-Pacific region, with China becoming Apple's second largest market for Macs. Mac shipment growth outpaced the PC market in the third quarter of 2011 for the 22nd straight quarter. Apple's growth of 24.6% currently dwarfs the 5.3% growth seen by PC shipments in the same quarter.

Despite 22 consecutive quarters of Apple Macs outpacing PCs in terms of shipments, Microsoft Windows still holds by far the largest market share of the global operating systems industry, with 84.51%. Mac is a clear second place, with 14.35%, while Linux has 0.77% of the market.

Despite having released two newer versions of its operating system, Windows XP, released in 2001, is still the highest used OS out of the Microsoft Windows suite, with 41.36% of Windows users using it. Windows 7 is a close second with 39.82%, while Windows Vista trails in third place with 17.42%.

 

Key Industry Players

Microsoft Corporation
Microsoft Corporation is engaged in developing, licensing and supporting a range of software products and services. It also designs and sells hardware, and delivers online advertising to the customers. It has five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division (OSD), Microsoft Business Division (MBD), and Entertainment and Devices Division (EDD).

IBM
International Business Machines Corporation (IBM) is an information technology (IT) company. The Company operates under five segments: Global Technology Services (GTS), Global Business Services (GBS), Software, Systems and Technology, and Global Financing. GTS primarily provides IT infrastructure services and business process services.

Apple Inc.
Apple Inc. along with its subsidiaries is engaged in designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a range of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings.

Dell Inc.
Dell Incis a technology company that offers a range of technology product categories, including mobility products, desktop personal computers (PCs), software and peripherals, servers and networking products, storage and services. Its services include a range of configurable information technology and business services, including infrastructure technology, consulting and applications, and product-related support services.

For more information on the information technology market, see the latest research: Information Technology Market Reports

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