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Industry Analysis Project

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Industry Analysis Project
IT Consulting in the US

Industry Overview
The IBISWorld Industry Report 54151 defines the IT Consulting industry as including “firms that provide the following services to client companies: writing, testing and supporting custom software; planning and designing integrated hardware, software and communication infrastructure; and on-site management of computer systems and data processing facilities. This industry excludes packaged software publishers and off-site data processing and hosting services.” (Yucel) The IT Consulting industry is expected to grow at a high rate, bolstered by rapid technology and process advancements in services such a cloud-based storage and big data analytics. The industry is projected to grow an annualized 2.4% to $431.8 billion by 2021. (Yucel) The rebounding economy and increasing corporate profits have created an environment of investment in IT Strategy and services. This investment is benefiting the industry as increased technology spend tends to open the consumers to cyberattacks and IT Consulting is increasingly being looked to for strategic guidance.
The IT Consulting industry has low barriers to entry and, in part due to low capital requirements, has a large number of independent contractors and small firms operating in the space. Boutique firms notwithstanding, the market has its fair share of large multi-national corporations such as International Business Machines Corporation (IBM) and Accenture. However, there is a large portfolio of services within the industry which prevents any single player from becoming dominant. To wit, IBM has the largest single market share at only 7.9% in 2016. (Yucel)
Fig. 1: IT Industry at a Glance (Yucel)

Porter’s Five Forces Model Analysis
Rivalry
Competition in the IT Consulting industry is high with a continuing trend to remain so. The industry has

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