Computer shop sector trends

(last updated July 2019)

What has been happening in the computer industry

Huge changes have occurred in the computer industry since the development of the personal computer (PC) in the early 1980s. Technology has advanced at a very quick pace, enabling increasingly powerful machines to run more and more sophisticated software and so carry out ever more complex tasks. This has made it a very dynamic industry.

Perhaps one of the most significant factors to impact on the industry in recent years (excluding the panic over the year 2000 problem) has been the huge growth of the internet and ecommerce and the ever-increasing speed of home and mobile internet connections. This had the effect of boosting industry sales, because:

  • consumers were prompted to buy computers for the home so that they could go online
  • businesses rushed to establish and develop their online presence

The rapid adoption by consumers of other internet-enabled devices such as smartphones and tablets also been an important development for the sector. It's forecast that shopping using these smaller, mobile devices - 'm-commerce' - will continue to grow rapidly in the next few years and is already so significant that very many businesses have changed the design of their websites to make them easier to look at on a small screen.

In the corporate sector, the client/server network model adopted by the internet had a strong influence on enterprise networks and intranets implemented by many larger businesses and organisations.

Another important trend has been a move among many businesses towards outsourcing tasks such as computer services to specialist companies. Increasingly, businesses are allowing their employees to use their own devices for work purposes. This trend is often referred to as Bring Your Own Device (or BYOD) and will potentially have quite a significant impact on resellers as business expenditure on hardware is likely to decrease while spending on cloud services (notably 'virtualisation' where the worker's entire desktop is served to their device using the cloud) is likely to increase as these organisations look to maintain data security.

Industry performance

According to government figures consumer spending on 'information processing equipment' (which includes personal computers, printers, software packages and so on) grew only very modestly between 1997 and 2003 but the following period to 2013 then saw spending nearly double, with the recent economic downturn apparently not having much of a negative impact as technological improvements encouraged people to keep buying the latest hardware and software products. Consumer spending then fell back in the mid 2010s, possibly as a result of the fall in oil prices that lowered retailers' stock costs and in turn enabled retailers to offer significant discounts to stimulate demand, but then increased again in 2016. The level of consumer spending on information processing equipment continued to increase throughout 2017 and looks set to continue through 2018.

In contrast to consumer spending, corporate expenditure on hardware and other IT services fell quite considerably in the late 2000s and early 2010s as many businesses looked to cut costs wherever they could. In practice this meant that many froze their IT budgets altogether until the economy improved. The improvement in the economy from the second half of 2013 until the middle of 2015 meant that many businesses started to invest in IT services again. The recovery stalled again, however, in mid 2015 and into 2016. The Brexit vote in June 2016 resulted in a great deal of economic uncertainty which continued during the negotiations with the EU throughout 2017 and into 2018. This has led to many companies postponing spending decisions, including for IT projects.

Keeping up with industry trends

In such a fast moving industry, it's essential to keep right up to date with industry trends. One good way of doing this is to belong to a specialist trade association, such as techUK or BCS - The Chartered Institute for IT. Their websites include a great deal of helpful information about the industry.

Trade journals, such as IT Reseller (ITR), are useful sources of up-to-date news and product information.

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