Dive Brief:
- The global IT services market will balloon to $2 trillion by 2028, as enterprises pursue cloud modernization, according to a new Forrester report. The firm reviewed public financial documents, conducted executive interviews and used additional consumer and executive data in its analysis.
- Forrester expects enterprise IT services spend to increase an average of 16% annually through 2028, despite relatively tepid near-term growth. Economic headwinds spurred by trade conflicts, geopolitical tensions and budgetary caution have taken a bite out of IT services revenue projections this year, the report said.
- Hyperscalers AWS, Microsoft and Google Cloud are driving the strongest growth by category, with IaaS spending expected to double in five years. By 2028, Forrester expects public cloud infrastructure providers to command 15% of the IT services market, up from 8% in in 2022.
Dive Insight:
Infrastructure leads enterprises down the path toward service-based technology procurements. But cloud data and compute services are an enterprise gateway to consumption-based spending up and down the tech stack and into crucial corners of the IT workforce, where IT services companies outcompete enterprises for talent.
Forrester forecasts significant spending increases across advisory, implementation and managed services. “IT services companies provide critical skills that are in short supply, notably in cybersecurity and compliance, AI, machine learning, deep learning, and data- and cloud-related skills,” the report said.
The firm expects IT services and software combined to capture more than two-thirds of global tech spending by 2027, as global IT spending pushes past $4.7 trillion. Gartner’s more bullish, expecting the number to exceed $5 trillion for the first time this year.
Accenture, the largest IT and management firm by revenue, according to Forrester, anticipates an eventual windfall from the generative AI boom. The professional services firm poured billions into AI development and workforce upskilling in the last year.
While Accenture’s overall revenues were flat year over year during the three-month period ending Feb. 29, CEO Julie Sweet said the company booked $21.6 billion in new business, including $600 million in generative AI-related projects.
Generative AI consulting is an emerging area of strong growth, the Forrester report said. One-quarter of professional service job openings require AI skills, the firm said, noting that Capgemini and Accenture plan to increase the number of in-house data and AI specialists by 17% and 11% respectively over the next three years.
The technology, the report notes, has the potential to reshape IT service delivery, automating processes, reducing project cost and freeing up enterprise dollars for additional modernization.
