IBM Industry Analysis

INDUSTRY ANALYSIS SOFTWARE AND SERVICES Of the approximately $2 trillion spent globally on IT each year, 45% is spent on IT services. According to Gartner, Inc. - a technology research and advisory firm - the IT services industry, which comprises companies that provide IT and business process outsourcing (BPO), consulting, implementation, and hardware and software support services, was worth $905 billion in 2012. REVENUES BY SEGMENTS Software Support Hardware Support 6.5% 10.8% BPO Consulting 16.0% 9.8% 27.7% Implementation 29.2% IT Outsourcing IT services can be further classified as offshore or onshore services. Firms that utilize resources or talents from within the country they operate in are classified as onshore services firms, whereas firms that outsource their services to foreign countries are classified under offshore services firms. Onshore services firms usually incur large operating costs, which is why most firms tend to outsource. The cost savings achieved from offshore outsourcing have recently pushed more onshore providers to adopt this model in order to compete with established players like Tata and Infosys, etc. TRENDS The IT industry is moving towards greater adoption of cloud computing, utilization of big data, social media, and mobility. These trends are necessitating changes to the industry's infrastructure. Cloud computing is a model for delivering tech services under which online resources are retrieved through web-based tools and applications, rather than a direct connection to a server Big data refers to the large volumes of data produced from blogs, videos, tweets, emails, transactions, etc. Big data has three main characteristics: high volume, high velocity and high variety. KEY PLAYERS IBM was the leader in the global IT services industry in terms of revenues in 2012, with a 6.9% market share. GLOBAL MARKET SHARE BY REVENUES 6.90% 4.20% 3.10% 1.20% 1.20% IBM HP Services Accenture PLC Cisco Oracle KEY METRICS EPS** (TTM) Operating Margin PEG*** (NTM**) 0.91 0.64 Market Cap Revenue Beta $202.37bn $42.95bn $ 127.36bn $149.76bn $50.66bn (TTM*) $102.38bn $113.13bn $48.61bn $37.18bn IBM $14.2 19.56% 0.89 НP Cisco Oracle -$1.58 7.72% 1.12 $1.87 $2.3 $4.95 23.25% 1.04 1.06 38.82% 0.93 1.13 1.18 Accenture PLC $30.16bn 13.01% 1.37 Trailing twelve months ** Earnings per share *** Price to earnings to growth **** Next twelve months IBM's COMPETITORS BY PRODUCTS/SERVICES Key Players Accenture Products/Services Segment Global Business Services Consulting, System Integration and Application Management Services Global Technology Services Strategic Outsourcing, BPO, Cloud Services Software Systems & Technology Accenture, Amazon Red Hat, Oracle WebSphere, Tivoli, Lotus, Rational System Z, System X, Power Systems, Storage Solutions, Mi- HP, Dell, Intel, AMD croelectronics Client Financing, Commercial Financing, Remanufacturing HP & Remarketing Global Financing BIDNESS SOURCES: Company Data, SEC filings, Bloomberg Professional Services Etc. DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this website are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein or to suggest approval for or affiliation with Bidness Etc.