Are you a digital, IT or tech company?

In the hiring internally vs. outsourcing development post, we pointed out that knowing if you are an IT company or not is one of the keys to understanding whether a company should outsource development or build products internally. As we thought about this further, we realized that using the phrase "IT company" is somewhat limiting. Over the years, IT has developed a very specific connotation. In particular, in the context of most medium and large enterprises, IT generally refers to the department that keeps your computing infrastructure up and running and not the department that builds your enterprises' most innovative products and services.

So what are some of the other terms that you can use - excluding IT - to ask yourself the same question - "are you an X company?" A few terms immediately come to mind, in particular digital and tech. Let's looks at the relative merits of each of these terms.

Are you a digital company?  Digital technology has been around for over 50 years, with the move towards digital accelerating in the last three decades as computing power has increased. Today almost everything that companies produce, share, and store are in digital format. While this hold true for all companies, the change has been particularly dramatic for companies that produced products that were once in analog format that are now being converted to the digital format. Publishing companies are a perfect example of where this change has been felt most in the dramatic fashion.

Are you a tech company? Until recently the word "tech" was used to described companies that were either software, computer hardware, or Internet companies. However, as the size of computer hardware components continue to shrink and as software becomes ubiquitous, companies that were not traditionally considered tech companies, are today being referred to as tech companies. This applies to companies in sectors ranging from big box retail to sports and fitness.

So what is our preferred terminology? Honestly, our pick would still be "IT company". The reason for this is that it best describes the type of technology that we are referring to - information technology. However, given the connotation that has increasingly been attached to IT, it is not a term that is widely accepted and hence can confuse people.

Digital, is our least favorite term. Describing a company as a digital company because the primary method by which a company produces, shares and stores information is digital, is akin to calling a company an electric company because electricity is used to keep the companies factories and offices running. 

Tech on the other hand is a term that we can live with. Tech is increasingly being used to describe both traditional IT companies, as well not traditional companies that are increasingly building tech-centric products and services. It is not as descriptive as the words IT, but its not as amorphous as the word digital either.