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CompTIA IT Business Confidence Index Q3 2017

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CompTIA’s IT Industry Business Confidence Index is published at the beginning of each quarter. A total of 314 U.S. IT companies participated in the survey. This quantitative study consisted of an online survey fielded to IT industry executives and professionals during late July 2017. The data can be used a directional barometer of the IT channel.
CompTIA’s IT Industry Business Confidence Index (BCI) increased 3.2 points to 67.4 on a 100-point scale. All three components of the Index showed increases. Looking ahead over the next two quarters, IT industry executives expect the momentum to continue, with further increases to the BCI.

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CompTIA IT Business Confidence Index Q3 2017

  1. 1. Copyright (c) 2017 CompTIA Properties, LLC. All Rights Reserved. 46.0 51.0 56.0 61.0 66.0 71.0 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Forecast Overall BCI RatingExecutive Summary 46.0 51.0 56.0 61.0 66.0 71.0 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 BCI Component Ratings U.S. Economy Rating IT Industry Rating Self-assessment: Own Company Rating Aggregation of 3 ratings on a 100-point scale CompTIA IT Industry Business Confidence Index Q3 2017 CompTIA’s IT Industry Business Confidence Index (BCI) increased 3.2 points to 67.4 on a 100-point scale. All three components of the Index showed increases. The increase during the third quarter reverses a trend seen from the inception of the CompTIA IT Industry Business Confidence Index – historically the index has been negative for every Q3 reading. Looking ahead over the next two quarters, IT industry executives expect the momentum to continue, with further increases to the BCI. Analysis of the data by company size reveals that micro-size IT firms – those with fewer than 10 employees, report having a slightly more bearish view of their own prospects. This may stem from the smallest of companies being most sensitive to fluctuations in the economy or their customer base. A strong majority of IT firms (77 percent) report being on-target or tracking ahead of revenue goals through Q3, which certainly factors into the positive business sentiment. While fifty-eight percent of micro-size IT firms report being on-track or ahead of their sales goals for the year, a sizable number (42 percent) indicate they are lagging their revenue targets through Q3. 20% 57% 23% Tracking ahead of goals On-target Lagging behind goals Revenue Tracking YTD
  2. 2. Copyright (c) 2017 CompTIA Properties, LLC. All Rights Reserved. 22% 67% 11% Tracking ahead of goals On-target Lagging behind goals 20% 63% 18% Tracking ahead of goals On-target Lagging behind goals 17% 17% 31% 32% 34% 35% 39% 43% 49% Despite the lofty heights of the CompTIA Index, IT industry executives do have a number of concerns over factors that could inhibit growth prospects. As always, fear of customers tightening the purse strings tops the list. This is especially concerning for micro and small tech businesses (those with less than 100 employees), who often have a concentrated customer base and can be significantly affected by the loss of just a couple of accounts. Concerns over labors costs and the availability of skilled workers jumped the most, increasing 13 percentage points year-over-year. With an unemployment rate for IT occupations hovering around 2 percent, and demand for tech talent growing across every industry sector in the U.S. economy, the inability to find workers is a serious threat to growth. As covered in CompTIA’s Assessing the IT Skills Gap study, organizations increasingly recognize the need to rethink their strategies for building the tech pipeline. Interestingly, concern over an unexpected shock decreased year-over-year; it fell from the third most concerning factor to fifth. Unfortunately, when markets and businesses feel the odds of the unexpected are low is the time when the unexpected can be most disruptive. Rating of Growth Inhibitor Concerns Key Economic Metrics v According to an ‘advance’ estimate from the Bureau of Economic Analysis real gross domestic product increased an an annual rate of 2.6 percent in the second quarter of the year. In Q1, real GDP increased 1.2 percent. v The national unemployment rate for July stood at 4.3 percent, according to the Bureau of Labor Statistics. The unemployment rate for IT occupations was 2.1 percent. CompTIA’s monthly IT Employment Tracker notes that the IT sector added an estimated 9,600 new jobs in July. v The National Federation of Independent Business index of Small Business Optimism rose 1.6 percentage points to 105.2 in July from 103.6 in June. v The Conference Board Consumer Confidence Index, which declined marginally in June, improved in July. The Index now stands at 121.1 (1985=100), up from 117.3 in June. Price sensitive customers hesitant to spend Labor costs / availability of skilled workers IT industry squeezed by decreasing margins Government regulation / gridlock / regulatory uncertainty Unexpected shock (e.g. new financial crisis, terrorist attack, etc.) Competition from new firms entering space Disruptive technologies or business models Access to credit / capital Currency fluctuations / strong Dollar 2016 Revenue Goal Self-Assessment Micro Firms 16% 42% 42% Tracking ahead of goals On-target Lagging behind goals 25% 54% 22% Tracking ahead of goals On-target Lagging behind goals Small Firms Medium Firms Large Firms
  3. 3. Copyright (c) 2017 CompTIA Properties, LLC. All Rights Reserved. About CompTIA CompTIA is the voice of the world’s information technology (IT) industry and workforce. Its members are the companies at the forefront of innovation; and the professionals responsible for maximizing the benefits organizations receive from their investments in technology. CompTIA is dedicated to advancing industry growth through educational programs, market research, networking events, professional certifications, and public policy advocacy. For more information visit CompTIA.org, or via SlideShare, Twitter or LinkedIn. Research Methodology This quantitative study consisted of an online survey fielded to IT industry executives and professionals during late July 2017. The data can be used a directional barometer of the IT channel. CompTIA’s IT Industry Business Confidence Index is published at the beginning of each quarter. A total of 314 U.S. IT companies participated in the survey, yielding an overall margin of sampling error at 95% confidence of +/- 5.6 percentage points. Sampling error is larger for subgroups of the data. As with any survey, sampling error is only one source of possible error. While non-sampling error cannot be accurately calculated, precautionary steps were taken in all phases of the survey design, collection and processing of the data to minimize its influence. CompTIA is a member of the Market Research Association and abides by its guidelines for survey best practices and research ethics. CompTIA is responsible for all content contained in this report. Any questions regarding the study should be directed to CompTIA Research and staff at research@comptia.org. Firm Size Survey Demographics 27% IT solutions provider 15% Software vendor, developer, ISV, SaaS provider 13% IT or business consulting 11% IT support or repair services 8% Telecom or communications services 6% Managed services provider 5% Systems/network integrator 4% Hardware vendor, manufacturer or developer 4% Reseller/VAR 1% Cloud service provider 6% Other type of IT industry firm Firm Type 24% Micro firm (less than 10 employees) 22% Small firm (10 to 99 employees) 23% Medium firm (100 to 499 employees) 31% Large firm (500 or more employees) 14% Executive Mgt. (CEO, President, Owner, etc.) 13% Senior Mgt. – IT function (CIO, CSO, VP, etc.) 7% Senior Mgt. – Business function (CFO, VP, etc.) 27% Middle Mgt. – IT function (Director, Mgr, Team Leader etc.) 18% Middle Mgt. – Business (Director, Mgr, Team Leader etc.) 2% Staff level – IT function 2% Staff level – Business function 13% IT Consultant 3% Business Consultant Job Role

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