Finance Overview of the Technology Industry of America
The tech industry as a whole has seen erratic performance in the past one year with dips and highs in the industry as reflected in the Dow Jones chart below.
As can be seen above the growth has actually been negative in the second quarter of the year 2016. Even with the erratic performance some sectors grew strongly while others registered significant drop in performance. The performance chart below shows changes in the past one year for different industries in the technology field.
|Industry||1 year change||Market cap
|Computer Hardware||-16.15 %||885.41bn|
|Computer Services||-1.59 %||797.90bn|
|Electronic Office Equipment||-12.05 %||82.05bn|
|Telecommunications Equipment||-0.73 %||586.87bn|
The table above shows that computer hardware and equipment are doing poorly. This could be because the market is already saturated with personal computers and related office equipment. The US as a market has had acquisition of computer hardware and related equipment for some time. Leaps in computing power have also slowed down unlike in earlier years where processing power could double in 2 years. Home customers are particularly not buying new machines as they see little added value.
Tech CFOs are attributing the strong growth in the tablet and mobile markets which are registering strong growth as more people acquire smart devices. The number of smartphone users grew from 171 million in 2014 to 190.5 million in 2015.
The trend in more demand for internet services and software continued in 2015 corresponding to the rise in smartphones and cloud computing. The latter is heavily dependent on Software as a Service which has led to the strong performance of the software industry alongside internet services.
CompTIA, a leading tech industry analyst in the US, has predicted a lower line rate of growth at 2.4% while giving an optimistic 7.0% growth rate if the world economy faces little turbulence. The median rate of growth has been pegged at 4.7% with the prevailing economic conditions in the US.
The trends that will dominate in 2016 are;
- Cloud computing – more businesses will continue to adopt this cheaper method of handling internet based business processes.
- Information security – technology and finance businesses will invest more against attacks
- Analytics – more businesses are turning to analytics to view their performance online and interaction on fronts like social media
- Software – this trend will go hand in hand with demand for cloud computing and growth in smart devices for more functionality.
Here are the Top CFO’s who are transforming the Technology industry:
International Business Machines Incorporation
Cisco Systems Inc.
Adobe Systems Incorporated
F5 Networks Inc.