IT Services Market Size, Share & Trends Analysis Report By Service Type (Consulting Services, Managed Services, Support and Maintenance Services, Outsourcing Services, Cloud Services, Application Services, Training and Education Services), By Deployment Mode (On-premise, Cloud), By Organization Size (Small and Medium Enterprises (SMEs), Large Enterprises), By End Use (Technology Companies, Consulting Companies, Marketing & Communication Companies, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

IT Services Market Size and Trends

The global it services market size was valued at USD 1.30 trillion in 2023, It is projected to reach from USD 1.43 trillion in 2024 to USD 2.95 trillion by 2032,  growing at a CAGR of 9.5% during the forecast period (2024–2032).

Most businesses today have issues maintaining the functionality and expense of their IT infrastructure. As a result, many companies are entering this sector to provide managed IT services. Similarly, managed Infrastructure is growing in popularity since it allows businesses to focus on their core business operations. Emerging technologies like big data have also contributed to the expansion of the IT Infrastructure Services Market. By 2030, it is anticipated that the Big Data Market will reach around $318 billion. Similarly, when the volume of data increases, the enterprise's IT infrastructure must ensure the most stable information security management to safeguard the enterprise's data from cybercriminals. This demand accelerates the IT services market by applying IT infrastructure services.

The effectiveness of IT services in businesses depends on various criteria and varies significantly between firms. Similarly, each organisation is unique and, as a result, utilises specialised technologies to satisfy its distinct business needs. Due to the lack of standardisation, it is difficult for businesses to determine the feasibility of IT services based on the success rate of the same technology in another organisation. A typical implementation of IT services may cost between $75 and $300 per user. Consequently, inadequate IT services may impose a substantial financial burden on businesses. Cloud-based IT services are gaining popularity due to their inexpensive setup costs. Similarly, cloud-based IT services make the expansion and contraction of enterprises simple. Consequently, many small and medium-sized businesses view cloud-based IT services as the most efficient deployment platform.

IT Services Market Growth factors

Increasing Smart Cities

Global governments are investing in the development of smart cities. The European Union supports smart city efforts with research funding and environmental goals for member states. The concept of smart cities is also on the rise in emerging countries. Alone in China and India, about 300 smart city pilot projects are now being planned. These initiatives require cutting-edge IT infrastructure to be implemented. This will be a significant future development driver for the IT services business. Tencent also announced a $70 billion pledge to invest further in cloud computing, artificial intelligence, and cybersecurity between 2022 and 2030. Chinese companies have demonstrated a strong desire to establish themselves through investments in India. Still, their situation has become more precarious as New Delhi's stance on admitting Chinese technology and investment into its domestic market has evolved. This will be a significant future development driver for the IT services market.

The rise of automation to eliminate routine chores and profound changes

The rise of automation to eliminate menial work and radical transformations in client demand, such as tailored pricing and enhanced customer experience, are compelling businesses worldwide to embrace IT services. In addition, the COVID-19 epidemic put the professional services industry to the test by compelling them to utilise remote working on a massive scale and modify their business plans in response to quickly shifting market conditions. In addition, the COVID-19 outbreak drove various technical improvements across industries, with companies surviving the pandemic with the assistance of technology by focusing on resource management and talent acquisition. In the current environment, businesses are rethinking their business models to ensure they have the necessary skill sets, cash, and resources to obtain a competitive advantage in the long run. Business Intelligence (BI), precise forecasting, enhanced business operations and decreased resource waste are a few of the other advantages of IT professional services. They also aid firms in discovering areas for cost savings. Several businesses are anticipated to leverage IT professional services to streamline their post-pandemic operations, fostering economic expansion.

IT Services Market Restraining Factors

Skills Shortage

The demand for a highly-skilled labour force is anticipated to increase dramatically as automation adoption in the IT services industry grows. Historically, the IT services business relied primarily on entry-level positions that did not require experience. Since entry-level occupations are anticipated to be automated shortly, the number of employees needing skilled labour is projected to develop during the forecast period, causing anxiety among 52 % of IT services industry organisations. Accounting, human resources, web design, and coding industries mostly require highly skilled labour. Low availability of a highly-skilled workforce, i.e., the workforce with a specific background or a managerial position with at least five years of experience, is anticipated to restrain the growth of the BPO services market throughout the forecast period.

IT Services Market Opportunities

The best prospects in software and BPO services

The IT services industry, categorised by category, will provide the most opportunities in the software and BPO services segment, generating global annual sales of $1,691.2 billion by 2030. The software and BPO services market section divided by type that will offer the most significant prospects will be software services, which will generate global annual sales of $1,519.4 billion by 2030. The market for hardware support services classified by type will offer the most excellent prospects in computer and peripherals support services, generating global annual sales of $198 billion by 2030. The software as a service (SaaS) segment will generate $209.0 billion in global annual sales by 2030, representing the most lucrative area of the cloud services industry categorised by service type. The segment of the IT services market classified by organisation size with the most outstanding prospects will be small and medium companies, which will generate global annual sales of $1,349.4 billion by 2030. The most lucrative prospects in the IT services market segmented by end-use industry type will be found in the other category, generating global annual sales of $1,268.0 billion by 2030. At $466,3 billion, the IT services market will grow the greatest in the United States.

IT Services Market Regional Analysis

Due to the significant adoption of Enterprise Resource Planning (ERP) and cloud services for data management, North America defeated the market in 2021 and accounted for over 35 % of the market share. Moreover, the expansion of the region's retail industry necessitates using features such as inventory management, data analytics and reporting, and customer loyalty management by vendors, hence fuelling the region's expansion. In addition, most foreign-owned U.S. affiliates are spending extensively on the research and development of IT professional services, which will contribute to expanding IT professional services throughout the region.

In addition to the aforementioned, Asia Pacific is anticipated to become one of the fastest-growing regional markets throughout the projection period, with a CAGR of 12.6%. This region's legal & advisory, and accounting service industries are anticipated to have an exponential increase in demand for knowledge-based services, which will stimulate growth during the projected period. In addition, emerging nations like China and India focus on IT growth, creating additional prospects for IT professional services throughout the APAC region. In addition, the Asia-Pacific area is home to numerous small and medium-sized enterprises that rely heavily on professional services to execute everyday operations.

IT Services Market Segmental Analysis

In 2021, the project-oriented services category led the IT professional services market and accounted for more than 35 % of its revenue. These services pertain to a project's installation, modernization, maintenance, and decommissioning. Frequently, these services are tailored to the customer's specific requirements, enabling them to maximize operational efficiency and provide projects on time and within the allotted budget. Organizations can reap various benefits as project-oriented services assist with resource management, scope management, revenue management, enhanced quotations, and efficient project delivery. These are the primary elements driving the segment's demand. During the forecast period, the Information Technology Outsourcing (ITO) service segment is anticipated to experience the highest CAGR of 12 %due to its ability to assist organizations across various industries in adapting to changing business demands, allowing associations to focus on innovation rather than IT infrastructure. Organizations leverage ITO services to obtain access to in-depth technical expertise, automate processes, and reduce expenses by selecting the most suitable delivery model. Moreover, ITO services provide a vast pool of resources to generate an adequate Return on Investment (ROI) and bridge the gap between traditional IT systems and innovation. The expansion of this industry is anticipated to be bolstered by several factors, including high-performance computing, compliance, security, and scalability.

The cloud sector led the IT professional services industry in 2021, generating over 65 % of total revenue. Cloud implementation can provide value to businesses by providing operational agility, storage management flexibility, and sufficient storage capacity. The lower installation cost and simplicity of deployment encourage firms to migrate to cloud-based technologies. In addition, it enables enterprises to enhance efficiency, promptness, accessibility, and scalability, driving the demand for cloud implementation. Several businesses are adopting the Bring Your Device (BYOD) policy, utilizing cloud computing, and ensuring a flexible work environment. The on-premises segment is anticipated to experience a CAGR of 9.8 % during the projection period. Organizations prefer on-premise deployment to have greater control over their IT infrastructure and the opportunity to modify infrastructure as needed. Data protection is the primary driver for businesses to select an on-premise deployment, which ensures sensitive data will not leave the company's premises and will be secured from potential fraud and data loss. In the possibility of a network failure, employees will still be able to access data if there is less reliance on the internet. This is another consideration that pushes businesses to adopt on-premise. These advantages are anticipated to increase demand for on-premise adoption.

The technology businesses category led the market with a greater than 40 % market share. Technology organizations rely on the intelligent application of data analytics, which may be accomplished with the assistance of IT professional services. In addition, Technology is continually evolving; hence, several technology organizations, particularly those focusing on the growth of Technology as a Service (TaaS), choose IT professional services to support their company operations. All of these reasons lead to expanding the IT professional services industry. The marketing and communication companies’ segment is predicted to experience the highest CAGR of 12.6% over the projection period. These businesses rely on comprehensive market research, website analysis, budget allocation, and reputation management, all of which can be carried out by IT professional services. In addition, the rise of digital media and improved consumer experience will continue to contribute to the segment's expansion. Presently, marketing and communication firms must communicate with clients and evaluate their operations for future evaluation. By exchanging information proactively and providing tailored adverts, marketing and communication firms can save significant money.

The IT services market is segmented by service type to cater to the diverse needs of businesses. Consulting services include IT strategy consulting and system integration, helping organizations design and implement effective IT frameworks. Managed services offer ongoing management of IT infrastructure, including security and network services, ensuring smooth operations. Support and maintenance services provide essential technical support and upkeep of IT systems. Outsourcing services, such as IT outsourcing (ITO) and business process outsourcing (BPO), allow businesses to delegate IT functions to external providers. Cloud services, including IaaS, PaaS, and SaaS, offer scalable and flexible IT solutions hosted on cloud platforms. Application services encompass development and management of software applications, while training and education services focus on upskilling IT professionals through courses and certification programs.

Segmentation by organization size ensures that IT services are tailored to the specific needs and capabilities of businesses of different scales. Small and Medium Enterprises (SMEs) often require cost-effective, scalable solutions that can grow with their business. They benefit from managed services, cloud solutions, and outsourcing options that offer robust functionality without the need for large upfront investments. Large enterprises, on the other hand, demand comprehensive IT services to manage complex and extensive IT infrastructures. They often require bespoke solutions for system integration, security, and compliance, as well as advanced consulting services to navigate large-scale digital transformations and maintain competitive advantages.

Impact of covid-19

The automotive industry is critical to the economy's growth. However, during the second and third quarters of 2020, the COVID-19 outbreak impacted the whole automotive supply chain, affecting new car sales in FY 2020.

South America is most affected by COVID-19, with Brazil leading the way, followed by Ecuador, Chile, Peru, and Argentina. South America's government (SAM) has taken a number of steps to protect its citizens and stem the spread of COVID-19. South America is expected to have fewer export revenues as commodity prices fall and export volumes fall, particularly to China, Europe, and the United States, which are all significant trading partners. The manufacturing industry, especially automotive manufacturing, has been damaged by containment measures in various South American countries. Due to the pandemic, major automotive manufacturers have also temporarily halted manufacturing in the region as a cost-cutting move. Furthermore, the automobile disc brake industry has been significantly affected in 2020 due to a lack of raw materials and supply chain disruption.

The Automotive Brake System control module of a vehicle is meant to alert the driver with a warning light if the system fails. The module itself is rarely defective; instead, the sensors or the wiring to the sensors are frequently defective. The most typical cause of dysfunction is when the Automotive Brake System is contaminated with particles or metal shavings. There is no signal continuity when sensor wiring is destroyed. Brake fluid becomes contaminated in corrosive situations, and the hydraulic unit fails to function.

Recent Developments

• In June 2022, Accenture Positioned as a Leader in IDC MarketScape for Adobe Experience Cloud Professional Services.
• In April 2022, Datto Launches Two Continuity Solutions that Provide the Last Line of Defense for MSPs Against Cyberattacks.
• In June 2022, Capgemini to expand its semiconductor design services in Europe for Intel Foundry Services customers.
• In June 2022, VMware Enhances Its Unique Lateral Security for Multi.