CLCO12 Nov 2019 07:58
The future starts now and looks very bright for the CloudCoCo Group....Gla ;-)
Enterprise IT Companies Ride Spending Wave
Businesses are budgeting more for cloud computing, AI and other services, boosting tech firms that provide them
Nov. 11, 2019 6:31 pm ET
Enterprise information-technology firms are taking a bigger share of indexes of valuable companies, as businesses increase spending on cloud computing, data analytics and artificial intelligence.
The trend is also helping business-tech stalwarts including Microsoft Corp. , International Business Machines Corp. and Salesforce.com Inc. maintain strong positions in such rankings, as former highfliers in other industries fall out of them, analysts say.
Many big tech companies “made smart where-to-play choices” by getting into the fast-growing enterprise IT market early, said Scott Anthony, a senior partner at Innosight, the strategy and innovation practice of Huron Consulting Group Inc. “Roughly two-thirds of growth comes from market momentum, that is, being in segments where the wind is at your back,” Mr. Anthony said.
A record 184 technology companies made it into this year’s Global 2000, an annual ranking by Forbes magazine of the world’s largest public companies, based on sales, profits, assets and market value. That is up from 130 tech firms on last year’s list.
Likewise, the pace of change in the makeup of the S&P 500 has accelerated in recent years, as more companies with strong enterprise IT services or products replace incumbents outside of the tech sector, including retailers, manufacturers and energy firms, according to data compiled by Innosight.
The IT sector currently accounts for roughly 20% of companies listed on the S&P 500, up from 15% in 2006, according to data compiled by Siblis Research Ltd. Over that period, energy-sector companies have dropped by half to roughly 6%.
Innosight estimates that the average tenure of companies on the S&P 500 will shrink to 12 years by 2027, from 24 years for companies that were on the list in 2016 and 33 years in 1964. Much of that shake-up is being driven by the rapid growth in global IT spending in recent years, it said.
Companies world-wide are expected to spend a total of $3.8 trillion on enterprise IT this year, up 3.2% from 2018, led by cloud-based software subscriptions, according to research and advisory firm Gartner Inc.
In a recent survey by KPMG LLP of about 600 chief information officers, more than half said their companies have spent at least $10 million this year on business automation projects, including robotics, artificial intelligence, cognitive computing and analytics. Roughly one third said they had earmarked at least $50 million for future projects, the survey found.
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