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What is IT Industry Analysis?

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  • Written By: Page Coleman
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 09 September 2016
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An information technology (IT) industry analysis is a method by which the IT industry outlook is evaluated. Some aspects that are frequently a part of such an analysis include expanded product and service offerings, a market review, competition, technological changes, and industry trends. Legal and regulatory changes as well as national and international economics may also be part of the evaluation.

This industry covers a wide range of products and services. Hardware products include mobile devices, personal computers (PCs), servers, mainframes, and semiconductor design and production. Software development and Internet technologies are also part of this industry. IT services, such as technical support, are included as well. The industry offerings continue to expand as integration with telephony and consumer use of IT for activities such as watching television, movies, and videos increases.

When conducting an IT industry analysis, researching the market is critical. IT industry market research analyze the demographics of IT users. Demographics include user characteristics such as age, gender, social-economic status, and region or nation. If the analyst is reviewing a consumer-oriented segment of IT, psychographics, which detail the consumer profile, may also be part of the analysis.

The IT industry tends to be highly competitive. A study of IT industry competition is usually included in the analysis. This section of the evaluation may include characteristics of the main competitors and their financial performance.

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Changes in technology greatly affect the IT industry. A new technology can create opportunities or threats that the industry must respond to. An IT industry analysis will usually place great importance on technological advances and any potential effects.

IT industry trends will be included in most IT industry analysis. The trends may be initiated by technology changes, and they may also be initiated by customer preferences. Some examples of trends include the outsourcing of services such as technical support and software development. Another trend has been that of powerful desktop processors, which was enabled by technology improvements and user acceptance.

Legal and regulatory changes are also part of an IT industry analysis. An IT business may need to alter its products or services to meet these requirements. The requirements are typically made by nations or regions, and a business that is global will have a number of national or regional regulations that it must track and adhere to.

National and international economies affect the IT industry. Economic downturns may hurt some aspects of the IT industry but help others. For example, as organizations respond to cost pressures they may reduce purchases of hardware and software. They may also start outsourcing to control costs, and so improve the outlook for outsourcing vendors.

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