19 Jul

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.

Dow Jones Chart

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
in USD
Computer Hardware -16.15 % 885.41bn
Computer Services -1.59 % 797.90bn
Electronic Office Equipment -12.05 % 82.05bn
Internet +24.72 % 1.42tn
Semiconductors +12.25 % 1.13tn
Software +10.44 % 1.48tn
Telecommunications Equipment -0.73 % 586.87bn

 

Trends

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.

Predictions

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.

Also Read: Finance Overview of the Publishing Industry of America

Here are the Top CFO’s who are transforming the Technology industry:


Brian Olsavsky

Amazon.com Inc.
Brian Olswavsky

Amy Hood
Microsoft Corporation
Amy Hood

Luca Maestri
Apple Inc.
Luca Maestri

Ruth Porat
Alphabet Inc.
Ruth Porat

Steve Sordello
LinkedIn Corporation
Steve Sordello

Stacy Smith
Intel Corporation
Stacy Smith

Catherine Lesjak
Hewlett-Packard Company
Catherine Lesjak

Ken Miller
Juniper Networks
Ken Miller

Richard Hart
Guidewire Software
Richard Hart

Martin Schroeter
International Business Machines Incorporation
Martin Schroeter

Kelly Kramer
Cisco Systems Inc.
Kelly Kramer

Mark Hawkins
Salesforce.com
Mark Hawkins

Mark Garrett
Adobe Systems Incorporated
Mark Garrett

Trac Pham
Synopsys Inc.
Trac Pham

Andy Reinland
F5 Networks Inc.
Andy Reinland

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