Why the IT Industry is Experiencing a Surge in Demand
The high expectations from the start of a new decade fizzled in the first quarter itself. The COVID-19 pandemic forced many companies out of business. And rendered a large number of people unemployed. Business expectations and demand were low in almost all sectors.
The global IT industry also took a setback. International Data Corporation, a premier global market intelligence firm, revised its original revenue estimate for the IT industry from $5.2 trillion to $4.8 trillion.
But, estimates for 2021 still suggest that the global IT industry is set to reach the $5 trillion mark.
Looking even further, the industry is expected to reach a cumulative average growth rate of 5% by 2024.
Most other businesses are struggling to keep themselves afloat. But the IT industry is the least hit. And even amidst a global pandemic, there is an influx of demand.
And this has become a puzzle, even for industry insiders.
Before we understand the reasons behind the surge in demand, it is important to understand what is IT?
IT is a broad term, and defining it will make it clear as to what industry segment we are referring to.
If we think of it, every organization makes use of information technology in one way or the other. This includes Governments and non-profit organizations too. This would make every organization a part of the IT industry.
To keep things simple, the following types of businesses and organizations are included when referring to the IT industry -
- Pure software solution providers - Organizations that have no physical products to offer. These companies sell software as a service. For example, Adobe.
- Hybrid product offering organizations - Organizations that offer both hardware and software. For example, Google and Microsoft. These companies also offer bundled hardware and software services.
- Service organizations - Organizations that only offer services to other companies and individuals. These include IT system maintenance and support, business process outsourcing, app development, etc. This category also includes in-house IT departments.
With new IT industry trends emerging and rising demand, it is important to understand what is causing this surge. And how businesses can bank on these factors to steer their future plans.
Here are the top reasons why the IT industry is experiencing a surge in demand:
1. Diversification of IT Offerings
The biggest market players in the information technology industry invariably started with a single groundbreaking offering. But all of them have now diversified into multiple streams.
They have not two, or ten, but hundreds of offerings.
Google, for example, started with a simple search engine. Now, its offerings include YouTube, Gmail, Drive, Google+, Maps, Chrome, Calendar, Contacts, and a lot more. Google Glass and Pixel smartphones are also a part of Google’s long list of offerings.
In the IT sector, research and development are the core drivers. The cloud has also opened up a new array of digital products and services that can be offered. With wider offerings, IT firms have expanded their customer base too.
More people have started availing themselves of IT services. It is no longer just the big companies that need IT infrastructure and support.
Smaller businesses also need web developers and website development solutions to go online.
Lessons for Businesses – Focus on offering newer services. Customer mining is the way to go in the IT industry. Up-selling and cross-selling should find a way in your marketing strategy.
2. Customer-Centric Approach
Businesses across verticals are emphasizing customers today. And this customer-centric approach has been aided by IT offerings.
There is a two-fold way in which a customer-centric approach has increased IT demand.
One, the IT industry is becoming increasingly customer-centric. This has increased customer retention.
And as other businesses aim to become more customer-oriented, the need for IT services has increased.
Some examples include –
- Chatbots that make sure businesses are available for customers 24 by 7.
- On-cloud solutions that can be accessed from anywhere and at any time.
- SaaS offerings that facilitate DIY operations, like website builders.
- Robotic process optimization to increase internal efficiency and, thus, upgrade customer satisfaction.
There are plenty of IT offerings that are solely for the purpose of making customers happy. And the increase in demand for such offerings has increased the overall demand inflow in the IT industry.
Lessons for Businesses – Customer is the king. You need to make sure that you offer great customer services. And in B2B businesses, you should make sure that your offerings make the end customers happy. This way, you can get more businesses to avail of your offerings.
3. The Hardware Aspect
It is not just the software side of the IT industry that has experienced a surge in demand. Physical devices have also been a significant contributor. Other than smartphones, laptops, and desktops, other smart devices have become a customer favorite.
The number of Internet-connected devices was predicted to hit 50 million by the end of 2020.
With the Internet of Things (IoT) becoming a new reckoning force in the market, smart home devices (smartphone operated blinds, for example) have become a norm. Home assistants (Alexa, Google Assistant, Lana, etc.) have found a place in people’s hearts and their homes. Also, the trend of smart glasses, smartwatches, and many other devices that run on AI, VR, or other related IT technologies are being actively sold.
And the number of Internet of Things (IoT) devices is expected to reach the 35 million mark by 2021.
The sale of these devices has contributed to the total influx of demand in the IT hardware segment.
Lessons for Businesses – It is not a hard and fast rule, but if your niche allows, having a lineup of hardware products can add to your total sales volume.
4. New Markets in Third-World Countries
A lot of third-world countries are now becoming dumping markets for IT companies. The population in these countries is much more, and thus the number of customers has exponentially increased.
Also, third-world countries are actively trying to catch up with their first-world counterparts. This has boosted the demand for both IT offerings (devices and SaaS) and IT management services.
Lessons for Businesses – Other than outsourcing business processes to third-world countries, consider them as prospective markets too.
5. The Need for Security
The world is becoming increasingly unsafe. Whether it is online or offline, safety is a major concern. And IT sectors’ inherent ability to offer safety makes it a sector that is much in demand.
From CCTV cameras to antivirus, there are multiple ways in which the need for security has benefitted the IT sector.
Cybersecurity is a segment of the IT industry that banks on this factor.
Hack attacks, data leaks, data loss, and identity theft are looming dangers that make the cyber world unsafe. And IT offerings that offer safeguards against these threats are getting the highest inflow of demand.
Lessons for Businesses – Businesses need to make sure that whatever they are offering has a layer of safety to it. With the guarantee of safety, customers are more likely to trust you. No matter what segment of the IT industry your business serves, data safety is a must.
If you keep an eye on IT industry news, it is not hard to notice the positivity. The demand is expected to keep rising, and the industry is set to become larger in the future.
Now that you know the reasons behind the rise in demand for IT technology, you know where to divert your focus to make sure your business benefits from the rise in demand.
Thanks to sharing wonderful information in this pandemic situation. that right increase in demand for such offerings has increased the overall demand inflow in the IT industry.