Industry Overview
The business services industry comprises businesses that focus on building business systems to support other businesses and provide infrastructure to support and add value to their clients’ business. Examples of players in this industry include Software as a service companies (SaaS), Internet Technology (IT) consulting firms, data processing and hosting services, industry research providers, digital media and content marketing, security services, third-party HR and payroll services and more. Target clients in the industry are normally other businesses and corporations. The industry is in its growth phase and businesses have increasingly been depending on third-party specialists to reduce labour costs and leverage industry-specific expertise. The industry is going through a rapid rate of technological change and disruption. Adaptation to technology and changing consumer behaviour is a key success factor. The industry is driven by economic growth and corporate profits which warrant the use of third-party services. Over the last five years, low-interest rates and a robust economic environment allowed the industry to flourish. As we enter a late phase in the business cycle, complemented by rate hikes, expenditure on business services will decrease. As a result, industry growth will be slightly slower in the next five years. Players with high platform stickiness which offer products and services fundamental to clients’ growth will continue to outperform the market.
