Upcoming Fidel Softech IPO: How Strong Is The DRHP?

The Information Technology or IT market comprises sales of the information technology services as well as the related goods by the organizations, partnerships and the sole traders. These entities apply computers, computer peripherals and telecommunications equipment for storing, retrieving, transmitting and maneuvering data. The IT market entails services like computer networking, system design services, broadcasting and information distribution technologies such as telephones, television and other equipment that are used in the process. Sales of goods such as computers, computer peripherals and telecommunications equipment are also a part of this market that are used in offering the IT services. 

The key kinds of information technology include computer hardware, IT services, software products and telecom. Computer hardware is described as the physical components that a computer system requires for functioning and encompassing everything within a laptop or PC. The services are utilized by small, medium and large companies for their financial, retail and wholesale services, healthcare, manufacturing and others. 

The market size of global information technology had been anticipated to grow from $8,384.32 billion in 2021 to $9,325.69 billion in 2022 at a CAGR of 11.2%. The market growth is primarily owing to the companies rearranging their operations and recovering from the impact of Covid-19. This had earlier resulted in the restrictive containment measures that involved remote working, social distancing and the closure of the commercial activities giving rise to the operational challenges. The IT market size had been anticipated to reach $13,818.98 billion in 2026 at a CAGR of 10.3%.

The demand for cloud computing services is anticipated to be a key demand driving factor for the IT services during the forecast period. In cloud computing, the model data is stored on the internet by a cloud computing provider, who operates and manages the data storage as a service. Several companies are now choosing the applications that are hosted in the cloud for their daily operations. 

For instance, as per the statistics offered by hostingtribunal.com, 60% of the computing workloads had been running in the public cloud back in 2019. In the same way, the cloud data centers had been anticipated to process 94% of the enterprise workloads in 2021. The companies are also opting for cloud-based data storage. This is thus boosting the demand for IT services. 

The global Coronavirus (Covid-19) outbreak has been a significant restriction on the information technology or IT market back in 2020. This was due to the fact that the supply chains had been disrupted following trade restrictions and frequent lockdowns. Thus the employees working for these sectors had faced challenges related to communication and infrastructure. Employees had been forced to work from home.

Covid-19 is considered to be an infectious disease having flu-like symptoms including cough, fever and breathing trouble. The virus was first spotted in Wuhan, Hubei province of the People’s Republic of China back in 2019. Gradually it spread globally and infected North America, Western Europe and Asia. 

The national governments had taken serious steps to contain the transmission that had resulted in a decline in the economic activity with the countries entering a state of lockdown. The outbreak had a negative impact on the businesses throughout 2020 and also in 2021. Nevertheless, it is anticipated that the IT market will soon recover from the shock across the forecast period as it is a “black swan” event and is not related anyway to the fundamental or ongoing weaknesses in the market or the global economy. 

The IT services market has been expected to register a CAGR of around 10.36% during the forecast period of 2022-2027. Considering the global scenario, the increased IT spending with the widespread adoption of software-as-a-service and the heightened cloud-based offerings indicates that there is a demand for IT services in the industry. 

As the IP infrastructure has improved, it has paved the way for various threats related to data leading to the rise in data breaches. This calls for advanced security solutions over the traditional ones. As this is gaining a grip in the market, the companies have actively started to invest their resources in enhancing their advanced security offerings. 

Various trends such as Blockchain, AI, AR, and 5G are most likely to have an impact on the IT services’ offerings. With the commencement of the 5G technology, it will surely ensure that the companies might set up networks on their premises. The digital transformation has also been anticipated to enable either the new networks setup based on the local frequencies or upgrading the existing networks on LTE. This also requires the creation of real-time IT locations that facilitate the automation and the autonomy of the complex systems. 

The data-driven analysis with the help of technology is globally driving the strategic decisions. In addition to this, the amount of the worldwide generated data is also increasing significantly. As per Seagate Technology PLC, the volume of the data created throughout the world has been anticipated to rise to 47 zettabytes and 163 zettabytes in 2020 and 2025 respectively from 12 zettabytes in 2015. In the bid to optimally use these data reserves, the IT service providers are required to develop smart It services and platforms for analyzing the extraction data and analysis.

The IT services market is highly competitive and comprises a couple of major players. In the market share aspect, some players are currently dominating the market. Nevertheless, with the advancement in IT consultancy services, the new entities are increasing their presence in the market. Thus, they are expanding their business footprint across the rising economies.

As of February 2022, in collaboration with the global partners, Cisco promises to introduce private 5G to enterprises. It reduces the technical, operational and financial risks associated with managing enterprise private 5G networks of the enterprise customers. Cisco has also worked closely with two of the leading ORAN vendors for incorporating the ORAN technology into Cisco’s private 5G. This is currently in the customer trials with JMA and Airspan. Various private 5G projects and pilots in entertainment, education, manufacturing, government and real estate are currently in process.