Software and technology companies can count on the professionals at Aimlon CPA P.C. to help address their financial reporting, tax, accounting, and operational challenges. Addressing these challenges enables your organization to be agile, to enjoy growth, and to achieve your financial, operational, and strategic objectives.
Software & Technology
General
The software and technology sector includes a diverse array of companies that research, design, develop cutting-edge software programs, manufacture, and deliver electronics, hardware, semiconductor equipment and other tech products and services to businesses and to consumers around the globe.
The global software and technology market is expected to generate about $5 trillion of revenue in 2021. The U.S. is the largest tech market in the world with one third of the tech revenue ($1.6 trillion in 2021) generated on its soil. That is about 10.5% of the U.S. gross domestic product, more than the contribution of the retail, construction, or transportation industries and most of the other industries to the U.S. national economy. Western Europe accounts for 20% of the global technology market: one of every five dollars spent on tech products or service is in Western Europe. Governmental entities and businesses are the main users of software and technology services.
The global software and technology industry employs more than 50 million industry and tech professionals. There are an estimated 585,000 tech businesses in the U.S., and they employ 12.4 million workers, the majority of whom are software developers, programmers, and web developers. In 2021, women accounted for 26% of the U.S. computing workforce, down from 36% in 1991. Blacks or African Americans and Hispanics or Latinos represent 8% and 7% of the tech industry workforce, respectively. The U.S. tech workers earn on average twice as much as the U.S. average worker.
Technology is interrelated in nature: elements of infrastructure, software, data, and services work together to provide new capabilities, a larger solution. That said, telecom services, devices & infrastructure, IT & business, emerging technologies, and software are the key categories of the software and technology industry.
Telecom services
The telecommunication sub-sector encompasses organizations that make use of fiber optics and the related electronics, orbiting satellites, and the Internet to produce equipment and deliver voice message, data or to provide broadband services using wireline or wired infrastructure of cables, networks, servers, computers, and satellites.
The service revenue of the global telecommunication sub-sector is estimated at $1.3 trillion in 2021; that’s 26% of the global software and technology industry revenue. Revenue from telecom services account for 21% of the U.S. software and technology market. The global revenue from telecommunication equipment sale is estimated at $2 trillion.
Devices and infrastructure
The devices and infrastructure sub-sector refers to organizations that manufacture and distribute the information technology components that are used to deliver IT services and solutions: servers, datacenters, personal computers, routers, switches, datacenters facilities, software, networking components, operating system (OS), data backup and storage.
The devices and infrastructure sub-sector represents 23% of the global software and technology market, and 18% of the U.S. software and technology market.
IT and business services
Companies in the IT and business services sub-sector provide routine support to businesses round the clock. These tech services include traditional and new lines of service: managed IT service, on demand IT service, network setup service, network security service, database management service, cloud computing service, software support service, data backup and storage service, computer repair service, hybrid cloud service, digital workplace.
The IT and business services sub-sector accounts for 21% of the $5 trillion global software and technology market, and 29% of the U.S. software and technology market.
Emerging technologies
The Emerging technology sub-sector covers various emerging technologies including anything-as-a-service, XaaS, solutions: software-as-a-service (SaaS), platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS), etc. These solutions comprise elements of hardware, software, and service such as the internet of things (IoT), drones and various automating technologies. For example, PaaS offerings typically provide preconfigured virtual machines and other resources necessary for apps development and testing. Infrastructure-as-a-service helps support mission critical workloads while minimizing the high cost of on-premises IT infrastructure. Examples of SaaS software applications include Google Apps, Microsoft Office 365, Amazon web services (AWS), Apache Stratos.
The Emerging technology sub-sector accounts for 19% of the $5 trillion global software and technology market, and 13% of the U.S. software and technology market.
Software
The software sub-sector covers businesses that develop a set of computer codes that directs the computer’s hardware to perform a specific task. The software & technology industry is a driver of the fourth industrial revolution, Industry 4.0, with smart manufacturing technologies. For instance, software program may assist with the numerical control of industrial machinery. If you operate in a heavy manufacturing, in the automotive industry for instance, to help lower your production cost, a series of meticulous factory operations and movements such as routing, laser cutting, placement, sewing, gluing, bending, and welding may be computer programmed.
Moreover, the industrial internet of things (IIoT), that is the advanced integration of information technology (IT) and operational technology (OT), provides industrial capabilities including machine-to-machine (M2M) communication, big data, machine learning, automation and optimization services and better visibility of the supply chain and logistics operations.
Examples of software and enterprise computing solutions include:
- Enterprise resource planning (ERP) software :ERP systems integrate and automate finance & accounting, manufacturing, sales & service, customer relationship management, human resources & payroll, and other internal and external management information across your entire organization. You may choose from large enterprise ERP, midmarket ERP, small business ERP depending on the size of your organization and your needs.The global ERP market is projected at $86.3 billion by 2027, up from $39.3 billion in 2019. North America accounts for more than one third of the ERP market share in 2019.
- CRM system : CRM systems help companies organize, automate, and synchronize their sales, marketing, customer service and technical support operations. About 2,500 businesses operate in the CRM system sub-sector and they employ nearly 98,000 workers.
- Collaboration & project management software program : Collaboration and project management software helps streamline business activities. Message boards, to-do lists, chats, instant messaging, scheduling, and file-sharing tools are some examples of collaboration and project management software program.
- HR & payroll software : HR & payroll software program helps organizations manage their human resources and process payroll for their employees. The U.S. HR & payroll software sub-sector is a $9 billion market with nearly 600 HR & payroll software program solution providers that employ more than 25,500 workers.
- Internet hosting services : Internet hosting services aid organizations in establishing and maintaining an attractive online presence. More than 13,600 companies provide Internet hosting services in the U.S. They generate a combined revenue of $29 billion and employ more than 100,000 workers.
Some of the key success factors
Organizations are using technology, especially emerging technologies like internet of things (IoT) or artificial intelligence (AI) to transform their processes, drive innovation, and design unique solution to their business challenges.
In a mature, harmonized market, some of the key success factors that we see include:
- Ability to embrace international, federal, state, and local data privacy and security regulations and ethical mandates
- Ability to attract, develop and retain talents with skills in areas such as artificial intelligence (AI), robotic process automation (RPA), cybersecurity
- Ability to incorporate social responsibility issues to your value chain and to your core strategy including environment, governance, social justice, diversity, equity & inclusion
- Ability to accelerate your technology company’s digital transformation
- Ability to partner with the organizations in your supply chains to improve transparency, flexibility, and resiliency
- Ability, for vendors, to provide an excellent partner experience. The distribution chain is no longer linear: vendors no longer hold all the cards; partners now have more leverage. As a result, vendors must be easy to do business with, to communicate with and must provide incentives and support to their partners
- Ability to perform strategic acquisitions to add new technologies to your portfolio and new talents to your talent pool
- Ability to build deeper cybersecurity expertise especially for managed service providers.
Services
Services that the professionals at Aimlon CPA P.C. generally provide to the organizations in software and technology industry include:
Preparation of financial statement
Please contact us today to find out how we may best serve your organization’s specific needs.