Outlook for IT Industry in 2013: Slow Growth, Some Cost Cutting

It's hard to believe it's already mid-February, but indeed, it's that time of the new(ish) year when reports looking back at 2012 come into play. One of the first of such reports is CompTIA's "IT Industry Outlook 2013," which was released to partners and members earlier this month.

The report surveyed 518 IT industry companies in late December 2012, asking them to look back on the year and look forward to the state of IT in 2013. The 45-page report is a comprehensive look at how the economy and other unknowns are impacting IT spending habits and which trends and technologies are key to understanding in order to stay competitive. Let's dive into some of the highlights.

Looking back

An estimated 5 million workers were employed in the U.S. IT industry in 2012, with an additional 4.16 million IT workers in core positions across all US industries and government. Of those employees, 1.5 million work in IT services (computer system design and implementation, custom computer programming, computer training, etc.), 1.5 million in telecom services, 650,000+ in IT hardware manufacturing and the rest in software publishing and retail and wholesale distribution. The top IT roles in the U.S. as of May 2011 were computer support specialists, followed by software application developers, computer systems analysts and systems software developers.

2013 growth

The report predicts a worldwide industry growth rate of 3-5.2 percent in 2013, with U.S. trailing slightly behind at 2.9-4.9 percent, which is also slightly lower than last year's projected growth. IT services and software are projected to have the most growth, while hardware and telecommunications aren't projected to fare as well due to the decline in PC sales and landline telephone business.

In regards to growth and spending, IT firms are concerned about "weak consumer or corporate demand, downward pressure on margins, access to capital and government regulation," but much of what will determine growth in 2013 is still up in the air.

Of the companies surveyed, 42 percent had the same expectations for profitability in 2013 as 2012, 34 percent expect it to be "moderately better" and 21 percent think it could be "moderately worse" or "significantly worse." Software and IT Services industries had the best expectations for 2013 profitability vs. hardware and telecom.

While 36 percent of companies plan to cut costs overall in 2013, the spending news isn't all bad. Of the firms surveyed, 31 percent will spend more on training and professional development, and 40 percent will increase technical staff.

2013 industry trends

Cloud, mobility, social and big data will continue to impact and shift the focus of the industry, and 2013 may be the year when embracing mobile devices, automation and cloud-based computing will finally pay off for businesses.

Information technology is more critical than ever to achieving business objectives, but many companies haven't realized this yet.  As the report states, "IT must learn how to provide broad oversight for a company and proactively bring technology to bear on corporate objectives."

Best practices for BYOD have only begun to take shape and will become increasingly important for businesses.

Cloud skills will continue to be in high demand (and short supply) as more companies look to build out private and public solutions.

The "big data" buzzword isn't going anywhere (so maybe it's not technically a buzzword anymore?) as companies adopt new tools to sort and store vast amounts of data.

The report also listed machine learning, razor-thin clients, alternative UI (building upon things like Siri and Google Voice) and contextual computing as the standout technologies that are getting increasingly more common but aren't yet mainstream. So maybe they'll be the buzzwords of 2014?

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