Recent events have sparked a great deal of speculation about the future of the IT industry. For example, according to Yahoo Finance, IT giant Hewlett Packard has just announced its plan to lay off 5,000 employees and split into two separate businesses. Industry experts are now left wondering whether this is simply an isolated event or the beginning of a trend that will change the landscape of the IT industry as we know it.
Understanding the Shift
Watching a large company like Hewlett Packard divide itself into two is unnerving. Because most companies are pursuing growth, splitting a conglomerate into two or more pieces seems counterintuitive. However, something about the current state of the IT industry made it more profitable for Hewlett Packard to exist as more than one business. In fact, analysts believe that the company’s split may have resulted from several possible catalysts within the IT industry, including the rapid commoditization of IT, the agility of start-up businesses and increased competition overall.
Because today’s IT industry is so fast-paced and competitive, even larger vendors are forced to make their options as lean and efficient as possible. Furthermore, because IT consumers are becoming more savvy and discriminating, successful IT vendors must be able to produce a superior product for an affordable price, which often requires enhancing the company’s focus and reducing overhead.
In the past, the industry’s environment was much harsher for small start-up companies than it was for large IT vendors. However, in today’s world, the industry is tough for everyone. Gone are the days when start-ups fought for their lives while conglomerates continued to succeed with minimal effort. It’s anyone’s game, and success in the modern world will be all about efficiency. If an IT vendor can provide consumers with the product they need at an affordable price, the business will be able to attract clients regardless of its size. If the vendor can also offer superior, reliable customer service, it will be able to retain these clients long-term.
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