The IT sector is a major contributor to economies all over the world. According to Statista, global market spending on computer and mobile equipment, telecom services, hardware maintenance, tech consulting and other services is well over $3 trillion.
As technology continues to advance, there's no doubt that this lucrative industry will continue to expand. In fact, research from CompTIA shows that the adoption of cloud, edge and 5G products and services could see the sector grow by 4% to $5 trillion over the next few months.
But there is a caveat with CompTIA's statistics, with the industry body claiming that growth of 6% or more is attainable if "customer-buying patterns for core tech products and services maintain" and "spending on emerging tech accelerates". It believes that economic slowdown and trade issues could hamper further growth.
However, according to experts, there are other issues that could affect the growth of the global technology market. Natasha Good, partner at law firm Freshfields, takes the view that technology companies face a number of critical risks today. "From what we are seeing from our global clients, societal pressures, investment risks and liabilities around data analytics are some of the greatest causes for concern," she tells IDG Connect.
A challenging market
She says high-growth businesses, particularly those with innovative, disruptive business models, face pressure to expand market share aggressively and to keep innovating. "This pressure can give rise to misconduct risk, such as employee misconduct, market disclosure issues and accounting fraud.
"These businesses need to evolve processes, behaviours and culture as the company matures - not only to keep staff productive and engaged, but also to protect their reputation and to secure sustainable investment and growth."
What's more, Natasha argues that the digitisation of highly-regulated industries like financial services, insurance and healthcare is getting ahead of sector regulation. "As established players in these industries trend towards acquiring tech assets, the question is how today's regulation bites on growing tech platforms and whether players will be caught out by sector legislation as it develops.
"As industry boundaries blur, achieving compliance with global and industry-specific regulatory frameworks is challenging - particularly as legislation and enforcement is fragmented across key operational markets."
With organisations increasingly relying on big data to help them refine internal and customer processes, data protection has become a major consideration for security teams. Good continues: "Finally, while data analytics and AI are value drivers and essential differentiators for tech businesses today, the proliferation of varying privacy regimes globally and concerns about societal matters (such as fake information and the future of work) means that the use of data can be as much of a risk as it is an asset.
"To stay on the right side of the regulators and stakeholder sentiment, companies need to build privacy compliance into their product development and strategy as well as being mindful of societal impact."
What CIOs think
It's clear that for IT organisations to succeed in today's fast-paced economy, they must be aware of these challenges and how to overcome them. Neil Thacker, CIO of Netskope, agrees that the tech sector has many complex challenges.
"Data protection and privacy are one of the biggest risks facing technology companies and the focus given to this topic during the CEO keynotes at Microsoft's Ignite, Google's I/O and Facebook F8 proves that the big technology organisations realise this," he says.
"An increasingly astute enterprise customer base is beginning to ask vendors direct questions about data processing agreements, and demanding shared responsibility for legislative compliance."
Thacker has also noticed a growing awareness and concern for the ethical use of big data and AI. He explains: "High profile incidents and investigations, such as the Cambridge Analytica incident, have made enterprises and consumers more aware of the power and possibilities handed to technology service providers that consume and process in data lakes and data oceans.
"At the cutting edge of technology we are also seeing the realisation of a sci-fi dream in which humans and machines are increasingly connected. Technology companies need to quickly get ahead on the ethics and security of this area before it becomes a risk, as the advances are happening within a marketplace in which governments are already becoming nervous of the power of big tech and muttering about monopolies."
For any business, investment is a key factor to their growth. So getting investors on side is crucial. Thacker adds: "Government interest and preparedness to regulate is just one of the factors that investors are watching for at the moment when evaluating companies and technologies. Investors are themselves becoming much more aware about the data, the science and the interoperability of technology."
Eradicating these challenges
The question is, how can technology companies overcome challenges? Jonathan Oliver, CIO at Content Guru, says that businesses need to be agile to innovate and move at speed but that innovation is not about ‘reinventing the wheel'.
"Tech companies should keep their finger on the pulse of technologies, processes and practices that are used by well-performing players and adapt them to their business. They need to place their customers at the centre of their business strategy, and ensure that the customer experience they deliver is consistently excellent and frictionless," he says.
Given that technology companies are heavily reliant on highly skilled employees, they need to ensure work is challenging, rewarding and fun. Oliver says: "This doesn't simply refer to beer-bars and gimmicks. The real challenge for businesses and CIOs is to ensure people are engaged and stay driven, finding work fulfilling and stretching themselves to new levels whilst building great solutions, together."
Another real challenge for organisations is cyber crime. With attacks increasing in scale and complexity, everyone needs to be aware of hacking threats and how they can be mitigated.
Derek Roga, CEO of EQUIIS Technologies, says a security-minded culture is essential for Ensuring a better cybersecurity posture within an organisation.
He tells us: "This is driven from the top down and it's crucial that the CEO is fully bought into the company's cybersecurity practices, and has an understanding of the risks and consequences, perhaps even taking a role in developing cybersecurity framework.
"It's vital that tailored contingency plans and ongoing cyber security education are put into place so that everyone tied to the organisation becomes an asset to cyber defence rather than a weakness."
In 2019, technology businesses and professionals face a range of risks that determine their success. Although this sector will always play an important place in society, organisations can only maximise the potential by solving these problems. If they don't, new challenges will likely emerge.