Computer Programming Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 61,200 computer programming services firms in the US develop custom computer programs designed for clients’ specific needs. Services include developing application software, software analysis and design, software support, and web page design.

Off-shore Outsourcing

Clients attempting to reduce costs often look to foreign providers of programming services.

Highly Skilled Labor

Because of the complexity of IT systems and computer programming, firms rely on a staff of highly-skilled, educated professionals, including computer programmers, software engineers, and project managers.

Industry size & Structure

A typical computer programming services firm operates out of a single location, employs 16-18 workers, and generates about $3 million annually.

    • The computer programming services industry consists of about 61,200 companies that employ over 1 million workers and generate about $185 billion annually.
    • Many individual programmers provide contracted services and operate as non-employer firms (these firms are not included in industry revenue data).
    • Large companies include Cognizant Technology Solutions and Perficient. Major companies based outside of the US include Infosys Technologies and Tata Consultancy Services, both located in India.
                                    Industry Forecast
                                    Computer Programming Services Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Apr 1, 2024 - Moderate Sales Growth Expected
                                    • Computer programming service industry sales are forecast to grow at a 4.47% compounded annual rate from 2022 to 2027, comparable to the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Employment increased slightly during 2023 while average wages for nonsupervisory employees were unchanged, according to the US Bureau of Labor Statistics.
                                    • More than 50,000 technology sector employees were laid off during the first quarter of 2024, according to layoffs tracking site Layoffs reflect a broader trend in the tech job market, where companies increasingly lean on AI and automation for efficiency and innovation, often resulting in a reduced human workforce, according to Techopedia. More than 240,000 roles left the tech industry globally in 2023, according to Techpedia.
                                    • Commercial Chapter 11 bankruptcy filings increased 72% year over year in 2023, according to Epiq AACER. Bankruptcy filings may reduce spending on custom computer programming. Overall commercial filings increased 19%. Subchapter V bankruptcies within Chapter 11 increased 45% during the period. “Though still below pre-pandemic figures, bankruptcies in all filing categories climbed last year amid the evaporation of pandemic emergency responses, increased interest rates, and tougher lending standards,” said Amy Quackenboss, executive director at the American Bankruptcy Institute.
                                    • False Claims Act (FCA) risks are increasing as government contractors including computer programming services face increasing cybersecurity obligations, according to the Morgan Lewis law firm. “Knowingly” failing to meet cybersecurity obligations included in government contracts carries significant FCA risk. The FCA defines “knowingly” to include acting with deliberate ignorance or with reckless disregard. The US Department of Justice (DOJ) launched in October its Civil Cyber-Fraud Initiative, which united its government procurement and cybersecurity enforcement efforts to pursue civil enforcement against government contractors who fail to satisfy required cybersecurity standards. The DOJ has indicated that criminal enforcement in the cyber space will increase significantly. Tighter enforcement is likely to impact contractors and implicate a range of additional issues, according to Morgan Lewis.
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