This is a question that is easy to answer, but the term “IT” (aka Information Technology) is misleading and doesn’t make sense. To better understand IT, we must apply it in a business situation for it to make sense. Don’t get me wrong. Technology is a great tool in our everyday lives that has definitely helped us. But to better understand the importance of technology, we need to see it in the light of business.
Technology holistically is meant to help the business run more efficiently, effectively, and therefore, more profitably. Unless the business in consideration makes money through technology, such as Netflix or Amazon, IT will always be a cost center and never makes the company money.
In physical terms, IT consists of computers, both desktops and servers; networking gear, such as switches, routers, and firewalls; other specialty equipment, the management and care of the data stored within these systems, along with the management of the equipment. All can either be stored at the same site as the company or most could be stored in a hosting provider (cloud) company in order to take care of the physical requirements of the equipment in a more controlled environment.
All of this equipment and management is contained within IT and stays within the IT realm.