KUHN CAPITAL Monday, March 19, 2018
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IT Services Keep Chugging Along


A raft of industry analysts agree that demand for IT services has charted a steady-as-she-goes rise since recovery from 9-11, and before that, the dot com bust.

Gartner has worldwide IT services sales at $625 billion in 2005, growing at 6%. India is the fastest-growing market with 28% growth (no surprise there), while healthcare is the most rapidly-growing vertical market at 9%. It’s about time healthcare “informatics” showed promise after years of lagging.

On the domestic front, demand for US tech employees is looking “downright robust”, according to InformationWeek. About 3.5 million IT workers were employed here at the end of Q1 2006, up 17,000 versus Q4 2005. Tech job posting on Dice rose 31% through April, 2006 versus same period last year. Leading the way in tech job creation were computer firms, which announced plans to hire 11,770 workers in Q2.

Outplacement firm Challenger, Gray and Christmas chimes in: “The [US] job market for tech workers has rebounded considerably since the dark days of 2000 and 2001,” despite job cuts caused by record-high merger activity. The study claims that in Q1 2006, employers announced 4,944 new tech hires while in Q2 that figure was 14,090.

And while the huge IT services industry seems to have settled into a mature, predictable growth phase, yet it remains highly fragmented. The Big Six” (Accenture, CSC, EDS, Fujitsu, HP, and IBM) only account for about 20% of total sales. That fragmentation accounts for why entrepreneurs continue to find IT services M&A opportunity.

Despite all the talk about developing ways to automate application integration and customization processes, complex systems apparently still require the human touch.

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