Computer System Design Services

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 45,400 computer system design services providers in the US integrate computer hardware, software, and communication technologies. Types of services include computer systems design, development, and integration; customer application design and development; and IT technical consulting and support. Firms may also provide services related to network development and design, cybersecurity, and communications.

Dependence on Skilled Labor

The computer system design services industry relies on a highly skilled, highly paid workforce, which includes computer and software engineers, programmers, systems integrators, and management with experience in information technology.

Rapid Advances in Technology

The computer and information systems management industry is characterized by rapid advances in technology that create volatility and uncertainty.

Industry size & Structure

The average computer system design service provider operates out of a single location, employs about 22-23 workers, and generates about $4-5 million annually.

    • The computer system design services industry consists of about 45,400 companies that employ over 1 million workers and generate over $204 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 55% of industry revenue.
    • Large firms, which include IBM, GDIT, and Unisys, typically have global operations.
                                    Industry Forecast
                                    Computer System Design Services Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    May 12, 2022 - Semiconductor Shortage may Last Until 2024
                                    • Intel CEO Pat Gelsinger cautioned in early May that the semiconductor shortage will last until 2024. Pandemic-related lockdown measures in key Asian manufacturing centers are causing bottlenecks in the supply chain. The US leads the world in developing and selling semiconductors, but manufacturing has shifted to Asia. Taiwan and Korea account for 83% of global processor chip production and 70% of memory chip output, according to the Semiconductor Industry Association.
                                    • The coronavirus pandemic could affect demand for computer system design services if businesses go out of business. Commercial bankruptcy filings decreased 4% month over month in April after increasing 26% month over month in March, according to Epiq Bankruptcy Solutions. Commercial bankruptcies decreased 5.4% month over month in February, and 11.2% month over month in January. Commercial bankruptcies were down 16% year over year in April. Small business bankruptcy filings known as subchapter V cases, a new type of filing that went into effect in February 2020 under the Small Business Reorganization Act, decreased 40% month over month in April after hitting record numbers in March.
                                    • Artificial intelligence (AI) is being used in various ways in response to the pandemic, which could create opportunities for computer system design services firms. UK-based BenevolentAI used its platform to analyze a massive trove of biomedical data through machine learning to make connections that led to identifying existing drugs that could effectively treat COVID-19 patients. Scientists are also using AI to reveal patterns in various data from patients infected with COVID-19 to discover why some barely experience any symptoms and others die. AI may also help doctors and scientists better understand how the coronavirus interacts with preexisting ailments to affect the immune system, leading to better outcomes for vulnerable patients.
                                    • CIOs will focus more on their firms’ longer-term digital transformations in 2022 after spending time on critical, short-term projects during most of the pandemic. Global IT spending is forecast to rise 5.1% in 2022 and reach more than $4.6 trillion, according to Gartner. IT spending grew an estimated 9% in 2021 over 2020. However, spending on devices is expected to moderate in 2022 after strong growth in 2021. Device spending grew 13% to $787.4 billion in 2021. Spending on devices is projected to slow to 3.3% growth in 2022, reaching $804.2 billion.
                                    • Many organizations increased IT security spending at the beginning of the pandemic as they implemented distributed IT and work-from-home environments, according to a recent IDG Research Services survey commissioned by Insight Enterprises. The rapid transition to work-from-home brought new security challenges across cloud, edge, and on-premise computing environments. Even after beefing up IT security spending amid the pandemic, 80% of senior IT and IT security leaders feel their organizations have insufficient protection from cyber threats. Demand for computer system design services may increase as organizations address the constantly evolving nature of cyber threats and their potential impact on distributed IT environments.
                                    • A global semiconductor shortage is affecting the production of most types of electronic equipment, including IT gear. Consumer buying patterns shifted at the onset of the pandemic, and supply chains were disrupted. Carmakers cut back on production - and computer chip consumption - while home-bound consumers ramped up purchases of computers, game consoles, and other chip-containing electronics. The whipsaw in chip demand made the semiconductor shortage worse when auto production bounced back. Gartner expects chip inventories to normalize during the second quarter 0f 2022, but further restrictions or supply chain disruptions caused by Omicron could push the semiconductor supply recovery out to the fourth quarter.
                                    • Nearly 60% of organizations plan to increase their IT spending in 2022, according to an Omdia IT Enterprise Insights Report. The pandemic has accelerated enterprise IT spending as firms modernize their workplaces and invest in technologies that support revenue growth. Key areas of increased spending include security and supporting remote and hybrid working models. Among specific industry verticals, IT spending in 2022 is expected to be strongest in the healthcare, utilities, life sciences, and manufacturing industries.
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