The term information technology (IT), sometimes called information and communications technology or ICT, encompasses a vast range of activities. These include:
Computer networking activities;
Computing facilities management;
Data hosting activities;
Internet service provision;
The sector is highly innovative and subject to constant technological development. It is also the source of dramatic changes in business practices in all other industrial sectors. Consumers and businesses now expect to be able to communicate with each other instantly and IT has driven huge increases in productivity in recent decades. A process of convergence has also been underway for some time between IT and telephony, driven by transforming voice traffic from an analogue signal to a digital packet, indistinguishable from other data packets travelling through a computer network.
Cloud computing services are now providing yet another catalyst for ICT convergence, and a revolution in the way businesses operate. Telecommunications carriers are gradually moving IT systems and internet data centers into the cloud, while uniform standards are being developed to speed rapid cloud development. One of the main advantages of cloud computing for businesses is that they no longer need to buy or maintain expensive and energy-draining servers. IT administration, including licensing issues, software updates, and IT security management, is looked after by the cloud computing provider. Cloud computing also allows a dispersed workforce to work effectively, and collaborate easily, even if they are stretched around the globe.
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Sources: www2.deloitte.com , https://www.schwab.com , https://www.gartner.com , https://www.racksolutions.com , https://www.vault.com
ASSOCIATIONS & INSTITUTIONS:
Approximately 7.4 million workers are employed in technical and nontechnical positions at IT firms and at companies, nonprofits, and government agencies that have IT departments. About 85 percent of this total are technical workers. Another 206,000 work as self-employed technology professionals. More than 3.7 million people work in support/business (e.g. sales, marketing, finance, human resources, etc.) positions at tech companies. Finally, 133,000 people work as self-employed support/business professionals.
Information technology jobs are found throughout the United States and the world. CompTIA AITA reports that the top five states for IT worker employment are California, Texas, New York, Florida, and Illinois. Within certain states there are also employment clusters such as Silicon Valley in California and Seattle, Washington. IT employment opportunities vary by industry segment. Within the hardware and software branches of the computer industry, many positions overlap and not every company will hire people to fill positions in each basic occupational segment: design, programming, administration, sales, and service.
The U.S. Department of Labor projects annual employment growth of 13.5 percent for computer and information technology careers through 2026. The fastest-growing jobs include information security analysts (+28 percent), software developers (+24 percent), computer and information research scientists (+19 percent), and Web developers (+15 percent).
To succeed in this field, IT professionals need strong analytical and problem-solving skills, flexibility, a minimum of a bachelor’s degree (for most positions), the ability to keep up with the latest technology, and a solid understanding of computers, the Internet, and IT basics. However, the technology of today may be obsolete in months, if not weeks, and only those individuals who work to remain on the cutting edge will have long-term growth potential during their career.
Contrary to the stereotype, the industry isn’t merely for pasty-skinned nerds, but it welcomes workers with a wide range of personality types, from techies and creatives, to those with sales-or customer service–oriented personalities. Historically, salaries have been generous (computer and math professionals earned mean annual salaries of $89,810 in May 2017, according to the U.S. Department of Labor), and the possibility of making a mint in stock options is an especially delicious bonus for those brave enough to sign on with an unproven startup.
Few other career paths can present what technology jobs offer—meritocracy, high salaries, teamwork, and intellectual fulfillment. Information technology careers typically rank high in “best job” lists due to their combination of good pay, relatively low stress levels, challenging work, advancement possibilities, and strong employment demand. In 2018, 10 of the top 80 jobs on U.S. News & World Report best careers list were in IT or related areas (such as data analytics), including software developer (#1), statistician (#6), mathematician (#25), information security analyst (#32), IT manager (#42), computer systems analyst (#46), computer network architect (#49), computer systems administrator (#55), and database administrator (#69), Web developer (#76), and computer support specialist (#77)
Tech is cool. It’s fun to be on the cutting-edge of technology and help design and build the next iPod, app, or smartphone.
A fast-growing industry. Strong employment demand is predicted for many IT occupations. For example, the U.S. Department of Labor (DOL) reports that employment for information security analysts will grow by 28 percent through 2026. Job opportunities for software developers will increase by 24 percent during this same time span.
Career diversity. Opportunities are available for techies, creative types, communicators (sales, marketing, social media), and people with almost any type of skill set and personality type. There are many opportunities to transition to other careers in the field.
Good pay. Those employed in computer and mathematical careers earned mean annual salaries of $89,810 in May 2017, according to the DOL. This is much higher than the mean salary for all occupations, $50,620. Additionally, if you get in on the ground floor of a promising start-up, you might get a big payday if the company goes public.
Geographic freedom. Opportunities are available throughout the United States and all over the world. Some positions allow you to work from home.
Happy workplaces. Many tech companies have a reputation for offering fun, laid-back work environments (and excellent perks). More than 15 tech companies were featured on CareerBliss.com’s recent list of the “50 Happiest Companies in America,” including Adobe, Intuit, Qualcomm, Microsoft, Cisco Systems, Oracle, Dell, Symantec, and Apple. Seventy-nine percent of IT professionals surveyed by CompTIA AITA in 2017 reported being satisfied with their jobs—up 6 percent from 2015.
Great perks. Top companies offer excellent benefits such as free fitness classes and meals, paid sabbaticals, on-site medical care, paid maternity and paternity leave, and complete medical/dental benefits. Some perks are just plain fun. Health care tech giant Epic Systems has a tree-house conference room, a moat, and an Indiana Jones-themed tunnel at its corporate headquarters.
Limited job security. The tech industry is constantly expanding, contracting, and restructuring. Some U.S.-based jobs are being outsourced to foreign countries.
Constant deadlines. When on deadline, you may have to work long hours, including at night and on weekends.
Constant learning. Since technology changes constantly, you’ll need to stay up to date throughout your career by attending continuing education classes, as well as by renewing your certifications or earning new, in-demand credentials.
Unhappy workplaces. Some tech companies have a reputation for being stressful places to work at because of unrealistic expectations by managers, excessive work hours, or sexual and ethnic discrimination.
Sedentary work environment. Many jobs involve a lot of time in front of a computer.
Fewer opportunities for some ethnic minorities. In 2016, IT workers at Google, Microsoft, Twitter, and Facebook were on average 56 percent white, 37 percent Asian, 3 percent Hispanic, and 1 percent black, according to the companies’ diversity reports. These companies, and the industry on the whole, are making efforts to increase these percentages, but progress has been slow.
It’s a man’s world. Women are underrepresented in most tech occupations. For example, in 2017, only 18.7 percent of software developers were women, according to the DOL, despite the fact that women make up nearly 50 percent of the U.S. workforce. This gender imbalance sometimes creates uncomfortable or even hostile work environments for women. One bright spot: women made up 40.6 of database administrators and 38.9 percent of computer systems analysts in 2017.
Gartner released a report that said that public cloud services are simultaneously cannibalizing and stimulating demand for external IT services spending. Infrastructure as a service (IaaS) adoption—the most basic and fundamental form of cloud computing service—has expanded beyond development and test use cases, the company said. The Gartner survey found that 19% of organizations are using cloud computing for most of their production computing, and 20% percent are using storage as a service for all, or most, storage requirements. Gartner surveyed 556 organizations, between June and July 2012, across nine countries and multiple industries where cloud planning is a critical issue.
One other key trend is the integration of smart devices, which is changing the way consumers use their home devices (television sets, smartphones, and personal computers or PCs), and blurring the boundaries between these formerly separate industries. As a result of advances in smartphones and tablets, consumers are increasingly using these devices to access the internet. The difference between mobile phones and tablets is also blurring, with phones becoming mobile computers rather than simply a device for making calls or sending text messages.
In January 2013, Gartner said tablets had dramatically changed the device landscape for PCs, not so much by cannibalizing PC sales, but because PC users are shifting consumption to tablets rather than replacing older PCs. Whereas once a world in which individual users would have both a PC and a tablet as personal devices was imagined, Gartner increasingly suspect that most individuals will shift consumption activity to a personal tablet, and perform creative and administrative tasks on a shared PC. There will be some individuals who retain both, but it is believed they will be exception and not the norm.
Software subdivides into numerous specialist areas, from relational database technologies to enterprise applications, to “horizontal” office applications characterized by Microsoft Office, for example.
Somewhat off the main track of IT at present, but very much related to both increases in processor power, and to work in simulation and artificial intelligence, is the field of robotics. This lies outside the scope of this profile, but the linkages between robotics and IT are already transforming both manufacturing and defense.
In addition, the IT arena is characterized by a number of key trends and emerging technologies which, again, have the potential to transform the way businesses currently use IT and carry out their operations, for example, outsourcing IT services, such as desktop PC support, or whole IT-supported functions, such as accounts processing. In technology, the trend to virtualization refers to the ability of large servers to be subdivided into a number of virtual machines, which can be either virtual PCs or virtual servers.
Virtualization carries with it a number of benefits, including stopping what, at one stage, looked like an endless proliferation of servers inside companies. Splitting one large server into a number of virtual servers enables the organization to reduce the number of servers it has to manage. Server virtualization should not be confused with another powerful trend: the creation of virtual environments inside the machine. The fact that desktop processors are now powerful enough to mimic real-world physics in computer space is transforming both design and entertainment.
Global regulatory uncertainties will likely continue to cast a shadow over the US technology sector in 2019:
The European Union’s General Data Protection Regulation (GDPR) requires tech companies to make architectural and engineering changes to be compliant. This is due to the large amount of user data they hold either directly or through their cloud solutions for enterprise customers.
India is expected to be working on a policy that would require data generated in India to remain within the country. The data localization law would require US cloud providers to ramp up their data centers/storage in India—leading to increased cost.
In the United States, the recently passed CLOUD Act (Clarifying Lawful Overseas Use of Data) states that US law enforcement agencies can demand that user data be handed over to them, irrespective of where it is stored. This poses a challenge for the tech companies that have promised to protect the personal information of subscribers to their cloud services—even those from other countries.
Technology companies may have a particularly daunting task in 2019 as they try to address their customers’ privacy concerns. This challenge is growing due to the skyrocketing number of people embracing social media. For example, 69 percent of American adults use social media—a 14-fold increase in about a decade. However, only 9 percent of these users are “very confident” that social media companies protect their data. This could be an issue for social media companies looking to monetize users’ data.
Another major area of concern is cybersecurity—A risk and reality of the digital era that should be proactively managed. To remain competitive, companies can’t stop innovating due to cybersecurity worries. Yet, some are doing just that. According to Deloitte’s 2018 AI Survey, 18 percent of respondents said their companies had halted an in-progress AI initiative due to cybersecurity concerns, and 22 percent decided not to start an AI program due to cybersecurity worries. In many cases, companies could be well-served to leave cybersecurity management to large cloud providers and other vendors that have more extensive experience and resources.
As we enter 2019, data silos continue to prevent many companies from gleaning critical insights regarding their customers and business. To address this issue, organizations should place a renewed focus on breaking down silos with tighter cross-organizational alignment. Without this approach, companies may struggle to take full advantage of critical technologies such as AI.
One potential solution to the data issue relates to talent: Because 90 percent of the world’s data was created in the last two years alone, companies have a growing need for a chief data officer (CDO).21 By 2019, a CDO position will be present in 90 percent of large organizations, and their involvement will grow extensively.
When it comes to talent in the tech sector, one thing is certain: The “shelf life” of skills is getting shorter and shorter. As a result, retraining has become crucial: Companies should invest more in educating and training workforces for the digital era. According to Deloitte’s recent AI Survey, 30 percent of respondents said they face a major (23 percent) or extreme (7 percent) skills gap.
Until recently, IT leaders typically have viewed the avoidance and reduction of costs as the primary benefits of cloud-based flexible consumption (“pay as you go”). However, over the last year, two new and highly strategic factors appear to be driving the rapid growth of service-based IT: increased business agility and “democratization" of innovation. These advantages signal an exponential expansion of cloud’s value proposition: Everything-as-a-service (XaaS) solutions make it faster and easier to experiment and innovate—dramatically shortening the journey toward enhancing customer experience. And, XaaS capabilities are making it cheaper and easier for broad ranges of users to access cutting-edge technologies and services, such as AI- and Internet of Things (IoT)-based solutions. Now, large, medium, and small enterprises can harness powerful capabilities once limited to a select few.
Deloitte’s most recent Flexible Consumption/XaaS Survey1 bears this out. Survey respondents2 rated “access to newest technology” as their No. 3 XaaS objective. In addition, for companies in which more than three-quarters of the enterprise IT is XaaS, and in companies that have been using flexible consumption more than three years, “accelerated innovation” has overtaken “reduced costs” as a key priority for their XaaS initiatives.
Thanks to cloud-based flexible consumption models, companies no longer need to shoulder the risk and cost of buying complex technologies and acquiring scarce expertise. Instead, they can leverage the investments and expertise of the world’s biggest technology companies and savviest startups.
Nowhere does this trend appear to be more apparent than in the area of artificial intelligence, where large software companies are integrating AI capabilities into cloud-based enterprise software and bringing them to the mass market.
The market is responding favorably: According to Deloitte’s State of AI in the enterprise, 2nd Edition, the most popular path to acquiring AI capabilities is enterprise software with integrated AI. Overwhelmingly, this software is cloud-based, either through public or private cloud deployments. Fifty-seven percent of our AI survey respondents globally use it now, and an additional 37 percent plan to use it within the next two years.
In 2019, flexible consumption models should continue to boost both cloud and AI adoption.
For example, 60 percent of enterprises are expected to move their IT systems to cloud by 2019 as a part of their digital transformation initiatives. As the primary value proposition of cloud continues to shift from “cost/efficiency” to “innovation acceleration,” multicloud strategies should play a crucial role in this transformation. A recent executive survey suggests that 67 percent of executives are either using a hybrid model (a mix of on-premise and public/private cloud) or considering it as a future option.
In the area of artificial intelligence, enterprise implementations will likely continue to increase in the coming year. In our 2018 AI Survey, 58 percent of respondents claimed they had undertaken six or more full AI implementations—up from 32 percent the previous year. The number of machine learning, deep learning, and natural language processing implementations all grew over the past year, with deep learning posting the largest jump (16 percent).
2019 is also the year for enterprises to begin exploring one other emerging technology category: Blockchain. As people and devices increasingly become connected, identity/privacy protection has become a prime concern. Both blockchain and biometrics promise to provide a robust way to secure and manage user identities. Companies may even combine these technologies to make their offerings more secure. In parallel, blockchain provides a robust, incorruptible, and encrypted method of recordkeeping that is easily verifiable. Consortiums such as R3 are likely to play an important role in establishing the roots of blockchain.
The tech sector has reversed course and has struggled since the threat of rising tariffs from the U.S on China. The tech sector gets more than half of its revenue from foreign sources, according to Strategas, making it seem more vulnerable to trade disputes. For now, we are keeping our marketperform rating on the group, and we still think businesses largely need to upgrade tech resources, which should help support the group.
We still like technology, but remain a bit concerned in the near term about some negative factors facing the sector—resulting in us suggesting investors not look to “load the boat” on this recent pullback. Concerns about slowing global growth, as mentioned, appear to be ramping up and could negatively affect the group, while further trade dispute escalation with China could continue to weigh on the sector, as we saw recently. Additionally, although we still believe in the need for companies to expand their spending on capital improvements, especially in the technology area, we are concerned that trade concerns may delay some of that spending.
However, the U.S. consumer now seems to us to be willing to spend more on technology and consumer confidence remains strong, apparently largely ignoring trade concerns, with the Conference Board's Consumer Confidence Index® rising to 135.7. This still-elevated confidence should help support the tech sector and leaves us still positive on the group, but with a bit more caution from our point of view.
Although we’ve been waiting for a move higher in capital spending for some time, we are encouraged by the July National Federation of Independent Business (NFIB) survey that showed capital spending plans for small business remain elevated and gained despite trade issues, while overall capex plans have declined some according to data compiled by Strategas Research.
Among the strongest suits of the digital sector is the emergence of technologies that focus on efficiency: cloud computing and data management systems.
Cloud computing remains one of the budding technologies with a strong grip in the market. This technology focuses on the collection and storage of big data and information security.
Data management systems have also become vital to ensure that data can be accessed uniformly, systematically and efficiently across various platforms.
These breakthroughs have become useful and integral to other non-tech companies. Other industries have been using these technologies such as health care, transportation, education, energy, entertainment, communications, finance, and professional services.
Tech titans keep finding ways to integrate itself as a need, in various sectors. Take for example Google’s efforts to focus on education by making it easier to transmit information, documents and other deliverables online with the help of Google platforms such as Gmail and Google Drive.
Mobile operating systems have basically become a two-way race between Apple and Alphabet.
Facebook and Google comprise three-quarters of the digital advertising industry in 2016.
The tech giants have become the centers of gravity for the American economy. Cloud computing and data management systems have created a lot of employment opportunities and earning potential in America. Even with the unpredictability of economic policies and even politics, IT-related companies have a sustainable path to revenues.
According to Cyberstates 2018, there is an expected rise of 13 percent in computer and IT-related jobs between 2016 to 2018. Among all other occupations in the US, this is the fastest rate so far.
The tech boom has also become a benefit for non-tech companies which provide a wide range of services and products.
Examples of these are FedEx and UPS which have been improving their e-commerce capabilities by purchasing airplanes and creating more depots.
The emergence of cloud storage and data management systems has also increased the demand for peripherals such as server racks, wall mounts, and cable managers for databases.
As the pace and complexity of new technology developments continue to increase, partnerships—both internal and external—have become essential.
In Deloitte’s 2018 Flexible Consumption/XaaS Survey, we came upon one worrisome finding: Only 24 percent of respondents said their organization has a comprehensive, enterprise-wide strategy for adopting XaaS. Without a sound strategy, complexities can be magnified, increasing the likelihood that companies may encounter issues related to cost overruns, poor interoperability, and security breaches.
In this environment, partnerships can become critical. Companies may need to place greater trust in vendors to provide capabilities—including security—that they’re not equipped to handle themselves. External partnerships can also open new markets for platforms and products and help companies overcome traditional barriers of expansion and scale with the help of core competencies that each partner possesses.
For example, enterprises should consider making partnerships with XaaS providers part of their innovation strategies to accelerate the development of new offerings and business models. XaaS providers can give companies of all sizes access to new technologies, platform-as-a-service tools to develop proofs of concept, analytics that can crunch huge data sets, and IT infrastructure to scale offerings quickly. By including flexible consumption in their innovation strategies, companies can decide which parts of their innovation portfolios they want to build and manage themselves and where it makes sense to leverage providers’ investments and expertise.
From an internal perspective, it’s important that businesses build relationships with their own IT departments. Too often, disconnects between the business and IT breed “shadow IT” challenges that short-circuit XaaS initiatives.
Unfortunately, despite IT departments’ efforts to meet business leaders’ evolving needs, Deloitte’s recent XaaS study indicates that collaboration between IT and the business involves more friction than is ideal: Fifty-five percent of respondents reported that their IT department responds too slowly to business needs, forcing business users to select XaaS alternatives.10
On a positive note, however, Deloitte’s 2018 CIO Survey revealed that 70 percent of surveyed CIOs believe their roles will shift from being stewards of technology to becoming partners in shaping business strategy.11 Heading into 2019, CIOs should play an even larger role in helping the business weigh the risks of technology investments against their potential ROI.
Recent tax reforms—particularly in the United States—will likely shape technology companies’ strategies in 2019 as well. As a result, many technology companies are looking to “repatriate” their cash back to the United States, with a goal of enhancing shareholder value. Successful deployment of cash could serve as a significant growth engine for these companies; more than $1 trillion of overseas cash could be repatriated by the top 16 US technology behemoths alone.
This infusion of repatriated cash may very well spur a sizable increase in mergers and acquisitions across the technology sector in 2019. Tech companies made acquisitions totaling $278 billion by the middle of 2018—a 50 percent increase over the same period in 2017. Interestingly, 9 out of 10 major transactions were US-driven—including the Dell-VMware and Broadcom-CA transactions.
As increasing clarity emerges in global taxation, technology companies are also likely to assess global operations—including supply chain, treasury, distribution, sales and marketing, and finance—to better align processes and functions against new tax requirements.
Tech companies will likely also continue investing in and nurturing smaller companies—not only to accelerate growth, but also to fend off competitors and add niche capabilities.