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 61,300 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 15-16 workers, and generates about $3 million annually.
- The computer programming services industry consists of about 61,300 companies that employ 971,000 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
Recent Developments
Dec 2, 2022 - Tech Sector Layoffs Increase As Economy Weakens
- Around 210,000 tech employees have been laid off in 2022 through November, with 40% of layoffs coming in the fourth quarter, according to a Jefferies analysis of data provided by TrueUp. The average company in its internet and software coverage universe has 36% fewer job listings now than at the start of the year. Lead analyst Brent Thill said that it’s a signal of the “excess” that tech brought on during a “period of easy money.”
- Computer programming services are likely to benefit from project funding approved in the Inflation Reduction Act signed into law in August. The bill includes hundreds of billions in grants, loans, federal procurements, and tax credits for research and development, deployment, and manufacturing in clean energy, transportation, and other sectors like agriculture. Projects in these sectors are likely to require the development of new computer programs. One major focus of spending in the bill is deploying clean energy: there’s roughly $30 billion in new tax credits for building wind, solar, and other clean energy projects, as well as extensions for existing credits. There’s also $60 billion in incentives for domestic manufacturing of everything from batteries to solar panels to heat pumps.
- Many software development firms are being impacted by the ongoing invasion of Ukraine by Russia. Some 20% of Fortune 500 companies have their remote development teams in Ukraine, according to Amsterdam-based software development outsourcing company Daxx. The region is known as Eastern Europe’s Silicon Valley. “We hear these tales of people delivering code in between air raid sirens or developers going into active military service to defend their country. This is truly heroic and only indicates the resilience of Ukrainian people,” said Saulius Kaukenas, CEO of software development firm Agmis.
- Low-code development platforms have seen tremendous uptake since the beginning of the COVID-19 pandemic and arrival of the Great Resignation, according to some industry experts. The adoption of low-code software development platforms is growing at more than 20% per year, according to research firm Gartner. The global market for low-code development technology reached $13.8 billion in 2021. Low-code development is expected to be adopted by more than 50% of medium to large companies by 2023.
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