Intellect: Britain’s technology sector in mixed health

The British technology industry is in “mixed health”, according to trade association Intellect.

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The British technology industry is in “mixed health”, according to trade association Intellect.

In its first annual ‘State of the Sector’ report, for which it consults leading industry analysts, Intellect said the areas most exposed to budgetary pressure were suffering heavily, as the recession hurt spending.

This meant hardware and services felt the impact of the current climate the most, it said. Discretionary IT budgets are small, and firms are haemorrhaging temporary contractors, it noted.

The smaller software and hardware suppliers were having the toughest time, struggling to find a buffer against the changes in demand.

Fixed line telephony services, especially to the home, would continue to suffer as consumers spent more time on mobiles. Electronic components for PCs and for cars would struggle to sell strongly, as would consumer electronic goods.

But other areas had decent growth prospects, it noted. While software firms are currently struggling as IT departments hold off application refreshes, medium term prospects were brighter.

The growth of software as a service, where systems are delivered over the internet, was prompting growth for the industry. And tougher compliance and data integrity requirements in the wake of the financial crisis, provided new opportunities for British software firms.

Software businesses would continue to sell successfully to the public sector and to firms in other countries, Intellect predicted.

In services, businesses offering outsourcing, blended delivery and niche services, would fare best in the tough climate.

The rollout of fibre optic cables, and the growth of mobile broadband, would provide good business for those parts of the industry.

In electronics, those building wireless products, or technology for the defence, energy and health sectors, would do well as those sectors remain resilient. For electronics sales to consumers, those making high definition televisions, set top boxes, home entertainment systems, gaming applications and DAB radios had the best prospects.

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