Information Technology Service Management Market Size [2031]

Report Description

Information Technology Service Management Market Outlook 2031

The global information technology service management market size was USD 9 Billion in 2022 and is likely to reach USD 20.3 Billion by 2031, expanding at a CAGR of 9.5% during 2023–2031. The market is propelled by the growing reliance on technology across organizations from different sectors.

Rising implementation of technology tools for operational improvements and optimization has boosted the demand for information technology service management (ITSM). With the increasing number of technology solutions, the complexities in overall IT systems and infrastructure are widening.

ITSM supports optimizing technology and related services; therefore, it becomes convenient to efficiently manage and resolve any issues occurring with software and hardware. The focus on effective use of technology and reducing unnecessary costs from organizations is expected to boost the market during the assessment period.

• According to a Technology and Innovation Report 2023 published by the United Nations Conference on Trade and Development (UNCTAD), technology adoption is rising across worldwide industries, offering huge growth potential for nations around the world. The report studied 17 frontier technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), Electric Vehicle (EVs), green hydrogen, and others. The overall market valuation for these technologies was at USD 1.5 trillion in 2020 and is expected to near the USD 9.5 Trillion mark by 2030.

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The research report finds that the COVID-19 pandemic fueled the information technology service management market. An increasing number of businesses adopted digital solutions during the major shutdown caused by the pandemic.

Companies and customers have adopted digital platforms established by the companies including applications and websites for products and services. This, as a result, raised the need for the activeness of IT infrastructure 24/7, for efficient customer and employee experience.

ITSM solutions proved to be critical in facilitating a seamless experience for the users, as they aided in the quick identification and resolution of issues that occurred in different technology tools. The market has witnessed steady growth post the normalization of the pandemic situation, as digitization and technology advancement continue all across the enterprises.

Impact of Artificial Intelligence (AI) on Information Technology Service Management Market

Integration of AI with ITSM solutions is expected to boost the market in the coming years. The advances in AI features are likely to facilitate the software solutions to optimize highly time-consuming tasks, to deliver faster IT services across the organization’s departments and to the customers.

The AI-powered ITSM solutions can streamline various myriad tasks such as routing, intelligent error reporting, alerting, predictive analytics, and self-service on demand.

Rising complexities in IT infrastructure and the need for uninterrupted access to technology, the market for AI-driven ITSM tools is witnessing rapid demand growth. Various players in the market are developing and launching AI-based ITSM solutions to offer the best of AI to their client organizations.

• In September 2023, ServiceNow, one of the major providers of ITSM solutions, launched Now Assist, a generative AI-integrated feature for its ITSM, HRSD, CSM, and Creator solutions, to embed AI across its platforms. This solution is aimed at boosting productivity, increasing agility, and enhancing the customer experience.

Information Technology Service Management Market Dynamics

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Key Trends

Rising adoption of cloud based ITSM solutions is a key trend in the market among several others. Instead of buying a complete software package and on-premise deployment, many organizations are opting for Software as a Service (SaaS) solutions, provided by third-party platforms over the cloud platforms. These solutions offer organizations flexibility, cost-saving, and scalability advantages, while significantly reducing complexities in IT infrastructure.

Preference for integrated service management is another major trend in the market. ITSM facilitates a centralized system for managing several solutions and services, enabling improvement in cross-functioning and streamlining workflow within the organization, thereby, enhancing the overall end-user experience.

Major Drivers

Growing adoption of advanced technology tools and services is propelling the market for information technology service management. With the increasing competition among enterprises for improving productivity, providing quality products, and gaining customers, the scope of technology that is latest, is growing among enterprises.

However, this increasing complexities in IT systems, which can be managed through unified solutions such as ITSM. As businesses are adopting several emergent technologies such as AI, the Internet of Things (IoT), and Computer Vision, among others, the demand for ITSM is steadily growing, to effectively manage IT systems.

• According to the Future of Jobs Report 2023 published by the World Economic Forum (WEF) in May 2023, technology adoption is anticipated to be the major driver of organizational/business transformation in the next five years. Among the surveyed organizations during the WEF study, above 85% reported growing adoption of the latest and frontier technologies, coupled with expanding digital access, are bringing transformational shifts in their organizations.

Existing Restraints

Complexities occurring over Service Level Agreements (SLA) are likely to restrain the market. SLA is a contract agreement between the ITSM provider and the client organization. Negotiations on SLA can be a challenging and complex procedure, as both parties are required to balance their interest in this deal, including costs and risks. Rising concerns over the privacy and security of the companies' technology assets are anticipated to hinder the market.

Emerging Opportunities

Growing focus on providing high-quality service experience to customers over digital platforms is expected to fuel opportunities in the market. The quality ITSM solutions can support enterprises in providing differentiated experiences to the customers, thereby, driving engagement and retention over digital platforms.

In the digital age customers demand uninterrupted and quick services from the businesses they opt for. ITSM allows companies to minimize human intervention within IT infrastructure to provide seamless connectivity and interactions to enhance customer prioritization and experience.

Scope of the Information Technology Service Management Market Report

The global market research report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Information Technology Service Management Market Segment Insights

Component Analysis

Based on component, the information technology service management market is divided into solutions and services. The solution segment led the market in 2022, in terms of revenue, and is expected to expand at a major growth rate in the coming years. The segment is driven by rising awareness about the importance of ITSM solutions for improving performance and maintenance of the overall IT infrastructure.

Growing dependence on various technology tools across departments and the need for seamless workflow within enterprises, ITSM implementation is becoming a crucial requirement. Thus, rising adoption of automation tools across industries is a major factor fueling the segment in the coming years.

The service segment is expected to expand at a significant pace during the projection period, due to the need for upgrading understanding of various ITSM solutions and their scope of implementation. Companies are taking the route of consulting services to gain critical insights on ITSM customization, implementation, training, and support & maintenance services.

Consultancy services hold special importance in technology implementation for organizations, as they assist in assessing the operational needs and coming up with the plan for the right solutions. Moreover, implementation services, customization services, and support services can further enhance the technology used by the companies.

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Deployment Analysis

On the basis of deployment, the global market is segregated into on-premise and cloud-based. The cloud-based segment is projected to register a considerable CAGR during the forecast period, owing to its benefits such as universal accessibility and enhancement in collaboration.

For numerous businesses, the cloud ITSM solutions enable cost-friendly access, as these Software as a Service (SaaS) solutions are provided by third-party platforms on a subscription basis.  Cloud platforms enable rapid implementation and flexible use of ITSM tools. Thereby, allowing companies to benefit from the advanced technology tools within limited budgets.

The demand for cloud ITSM is major from small and medium enterprises (SMEs), as it is agile and budget-friendly. The growing popularity of cloud computing solutions is likely to boost opportunities for the growth of the cloud ITSM segment.

• According to the information published by Google Cloud in January 2023, over 41% of technology and business leaders planned to raise the investment toward cloud-based products and services, owing to the changing economic climate. 33.4% of leaders planned to shift legacy enterprise software solutions to the cloud, while 32.8% were planning to on-premise workload to the cloud environment. 

Application Analysis

On the basis of application, the information technology service management market is segmented into performance management, configuration management, database management systems, network management, and others. The network management segment is expected to register a robust growth rate during the forecast period, due to increasing complexities in IT networks with the rise in implementation of IT tools and services.

Across organizations, the need for efficient network management and monitoring is widening, to facilitate uninterrupted connectivity of the IT systems and platforms for the users. The network management ITSM solutions allow organizations to speedily identify and solve network-related issues, optimize network performance, and enhance security. The concerns over cybersecurity are furthering the need for network management solutions to safeguard networks from cyber threats.

The database management systems (DBMS) segment is anticipated to witness rapid growth, owing to the need for efficient and quick-responding solutions for managing IT infrastructure. DBMS is vital for the storage and management of large data, which is highly important for modern-day ITSM systems. Rise in the adoption of cloud solutions further boosts the need for DBMS management, owing to the demand for deriving real-time insights from large data sets.

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Vertical Analysis

Based on vertical, the global market is divided into BFSI, IT & telecommunication, manufacturing, education, government, travel & hospitality, healthcare, and retail. The IT & telecommunication segment is projected to expand at a major growth rate during the projection period, due to the expanding utilization of technology tools in this sector for various requirements.

ITSM tools reduce complexities occurring in IT systems for organizations in this sector, allowing cost-saving, enhancing services & solutions delivery, and boosting customer experience.

The healthcare segment is expected to exhibit significant growth in demand in the coming years, owing to the rising adoption of technology tools in the sector. Various digital health technologies, such as AI in healthcare, electronic health records (EHRs), wearable devices, telemedicine, are being developed and adopted worldwide to improve several procedures and facilities management. The preference for ITSM solutions is growing among the clients in the healthcare for managing the technology tools and patient data.

• According to a report published in June 2023, the medical technology revenue is likely to reach USD 570.7 Billion in 2023. It is likely to expand at a 4.73% compound annual growth rate, surpassing USD 719 Billion in revenue by 2028. Increasing adoption of medical devices is expected to be a major contributor to the revenue, accounting for USD 471.8 billion in revenue in 2023.

Regional Outlook

In terms of region, the global information technology service management market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the projection period, owing to the rising reliance on technology in various sectors.

North America has a significant presence of major players in the market such as Microsoft, Atlassian, and ServiceNow. These players are developing pioneering ITSM solutions to manage IT infrastructures, thereby, making the digitization experience seamless and productive for companies. The growing trend of Bring Your Own Device (BYOD) and remote/hybrid working in enterprises in North America, which is boosting the adoption of ITSM solutions and services in this region.

The market in Asia Pacific is expected to witness rapid growth in the coming years, with the increasing digitization across sectors. With the growing globalization of businesses, many organizations in developing countries such as India, China, Japan, and South Korea, are using technology tools to reach customers in different corners of the world.

Increasing number of start-ups and rising business opportunities for medium- and large-sized enterprises with digital platforms, are driving the market in this region. Growing significance of advanced technology solutions such as AI, IoT, and computer vision is expected to drive the demand for integrated service management solutions such as ITSM.

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