Market Overview

Automation To Reduce IT Labor? JP Morgan Weighs In

Automation To Reduce IT Labor? JP Morgan Weighs In

In a new report on the IT industry, JP Morgan analyst Tien-tsin Huang discussed the growing reliance on automation and its implications on the labor force. As many companies focus on trimming every last cent of costs, reducing labor expense is a key area of exploration.

Automation Numbers

According to the report, India’s IT employment could shrink by as much as 10 percent in the next three years due to the implementation of self-service IT solutions. Automated services will likely continue to replace low-end, low-skilled employees in upcoming years. In addition, up to 65 percent of business process outsourcing could likely become automated.

IaaS Spending On The Rise

Global cloud information-as-a-service (IaaS) spending is expected to grow by 33 percent in 2015. This robust growth is not expected to change anytime soon, as Gartner forecasts 29 percent compound annual growth per year through 2019. Gartner also expects that consolidation will continue around a handful of major IaaS providers, including, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT) and Google Inc (NASDAQ: GOOG)(NASDAQ: GOOGL).

IT Initiatives

According to the report, International Business Machines Corp (NYSE: IBM) is continuing to push for adoption of Watson, while Wipro Ltd (NYSE: WIT) recently launched its own artificial intelligence platform, named “Holmes.” In addition, CAI International Inc (NYSE: CAP) recently introduced a cloud-based banking system, and Genpact Limited (NYSE: G) launched a cloud-based order management platform.

Stock Picks

JP Morgan sees plenty of opportunity for investors in IT stocks. The firm has Overweight ratings on CDW Corp (NASDAQ: CDW), Cognizant Technology Solutions Corp (NASDAQ: CTSH), Globant SA (NYSE: GLOB), Infosys Ltd (NYSE: INFY), Luxoft Holding Inc (NYSE: LXFT) and Virtusa Corporation (NASDAQ: VRTU).

Disclosure: the author holds a short position in Amazon.

Latest Ratings for AMZN

Oct 2020Deutsche BankMaintainsBuy
Oct 2020Credit SuisseMaintainsOutperform
Oct 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings


Related Articles (AMZN + MSFT)

View Comments and Join the Discussion!

Posted-In: JP Morgan Tien-tsin HuangAnalyst Color Long Ideas Analyst Ratings Tech Trading Ideas Best of Benzinga

Latest Ratings

FBJP MorganMaintains315.0
RPTXNorthland Capital MarketsInitiates Coverage On
PCSACraig-HallumInitiates Coverage On12.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at