Global IT Services Spend Will Reach $2 Trillion by 2028

Financial services and manufacturing. Ten of the largest IT services companies saw 44% of their revenues come from financial services, manufacturing, and energy. The growth opportunity is significant: Accenture estimates that only 5% of manufacturing and engineering services companies scale mature digital capabilities across their organization.

Managed services. Infrastructure as a service will nearly double its share of the IT services market — going from 8% in 2022 to 15% in 2028. The largest hyperscalers will enjoy the biggest growth. Google Cloud and AWS had 26% and 13% growth in 2023, respectively, with Azure and other cloud services growing 17% for Microsoft.

Cybersecurity. Canalys estimates that two-thirds of the $224 billion in cybersecurity spend in 2024 will be for IT services in consulting, outsourcing, managed services, solution deployment and integration, maintenance, and support.

Headcount vis-à-vis automation. IT services firms grew headcount to match supercharged pandemic demand, but many are now cutting jobs. Since headcount and revenue have been in lockstep, they must ensure that such cuts do not harm the bottom line. To improve margins, many are considering the productivity gains of automation, but most benefits are still unrealized.

Competition from software and engineering firms. Engineering and IT services firms are competing to increase their share of IT services revenue, especially in consulting, security, maintenance, digital, and networking. IT services firms are also nurturing closer collaboration with the software industry: For example, Cognizant's purchase of Thirdera strengthens its strategic partnership with ServiceNow for AI-driven automation.

Generative AI in terms of how it reshapes the way that services are delivered. Fifty-seven percent of the jobs lost to automation in professional services in the US will come from generative AI. If genAI increases IT service productivity to lower project delivery costs, more resources would be available to reduce project backlogs. Project onshoring could become more popular as parts of consultant jobs become semiautomated.