Global IT sector investment could reach $2 trillion by 2028: Forrester

A Forrester report has predicted that global IT service industry investment should peak at $2 trillion by 2028. 

In its Global IT Services Market Forecast 2023-2028 report, Forrester stated the $2 trillion spend over the next five years, averages 4.6 percent of annual growth. 

Tech vendors in the financial services, manufacturing and energy space are set to drive around 44 percent of revenues over 2023, the report also stated. 

For the Asia-Pacific region (APAC), growth is said to be the fastest, reaching around the 6 percent mark. 

In a blog post about the report, Michael O’Grady, principal forecast analyst said, Overall, the IT services industry will average 4.6 percent annual growth, with infrastructure as a service (IaaS) averaging annual growth of nearly 16 percent.”

O’Grady stated that shortly, growth will be driven by financial services, manufacturing managed services and cybersecurity.

According to O’Grady, the growth opportunity “is significant” as “Accenture estimates that only 5 percent of manufacturing and engineering services companies scale mature digital capabilities across their organisation.”

“Infrastructure as a service will nearly double its share of the IT services market — going from 8 percent in 2022 to 15 percent in 2028. 

“The largest hyperscalers will enjoy the biggest growth. Google Cloud and AWS had 26 percent and 13 percent growth in 2023, respectively, with Azure and other cloud services growing 17 percent for Microsoft,” O’Grady said. 

O’Grady also said, “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.”

Across the globe 

The report also stated IaaS will see fast growth and almost double its share of the IT services market, from 8 percent in 2022 to 15 percent in 2028. 

According to the report, this will be driven by the growth of the largest hyperscalers, Google Cloud and AWS.   

As a way to handle the accelerated growth in 2024, the report said “will need to constantly calibrate talent-supply to the demand.” 

“IT service firms grew headcount to match supercharged pandemic demand, but many are now cutting jobs,” the report said. 

From the report, generative AI is reshaping how services are delivered. 

“In the US, 57 percent of the jobs lost to automation in professional services will come from generative AI. 

“If generative AI increases IT service productivity to lower project delivery costs, more resources would be available to reduce project backlogs,” the findings stated. 

O’Grady said, “The IT service industry captures more than a third of annual global tech spend. By 2028, the annual spending will increase significantly to reach $2 trillion. 

“Despite strong forecasted growth over the next few years, IT service firms must stay ahead of current challenges, including optimizing headcount for cost and efficiency, staying abreast of competition from software and engineering firms, and utilizing generative AI judiciously to reshape service delivery."

O’Grady added that “IT service companies that manage these challenges well will thrive and scale globally."