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August 03, 2016

CompTIA Report Shows Lack of IT Industry Self-confidence

Of the many metrics used to determine the success of an individual business or industry, customer ratings may prove the most important. Of course, customers supply money to pay for products and services, so without them, the business or industry in question would be left with goods but no way to progress.

Aside from the all-important customer, the industry, such as information technology, must believe in its own capabilities. It is that confidence the Computing Technology Industry Association (CompTIA (News - Alert)) set out to measure with its latest “IT Industry Business Confidence Index” report which, unfortunately for the 257 participating U.S. tech companies, showed a lessening in self-confidence from the second quarter to the recent third quarter this year. Companies that participated in the survey remarked on their confidence in the U.S. economy, the IT industry as a whole, and the performance of their own companies.

It appears that the smallest of IT companies carry a lot of the blame when it comes to adapting to changing market conditions; they tend to slow their momentum in the summer before picking up again in the winter. Tim Herbert, the senior vice president of research and market intelligence at CompTIA, commented on that reality as their recent report shows a drop of 1.4 points to 61.7 on the 100-point confidence scale – a decrease that followed a previous drop in Q2 of 0.9 points.

“Despite the positive momentum in metrics such as IT sector hiring and revenue growth in many categories, a rebound in business confidence failed to materialize,” Herbert said. “The data indicates the smallest of IT firms, those with fewer than 10 employees, continue to exhibit higher levels of sensitivity to volatility or market disruptions.”

This collected set of figures that could now represent a downward trend that IT officials will be keen to turn around. CompTIA’s Amy Kardel, its Board of Directors chairwoman, noted that the summer slowdown is common and that a pickup in the winter months, where the CompTIA quarterly report has averaged a gain of 2.3 points since its beginnings in 2009 (compared with an average drop of 1.5 points in summer months), could steady the ship as these companies and the U.S. economy hopes to gain steam again.

On the other hand, average figures considered alongside the latest numbers, the reports from this year show that the IT industry could do more to push forward in the summer and continue to believe in its own abilities. Although companies may report more heavily about a downslope in the economy rather than their individual firms, the latter does inform the former. Smaller entities may have a lot to learn from their larger counterparts, so responsibility may land on both sides of the aisle when doing away with the typical summertime slowdown. Larger firms can show their smaller neighbors how to weather the storm of a decrease in consumer or B2B shopping and keep their confidence positive. At that point, maybe CompTIA’s figures will show growth or at least a steadiness all year long.

Edited by Peter Bernstein

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