Global services market to hit $1.1tn in 2021 - IDC
Large services providers are making big bets on the operations and product side, which enjoys more than twice the market growth
Global IT and business services revenue is expected to grow by 3.4 per cent (in constant currency) in 2021, according to IDC.
In nominal dollar denominated revenue based on current exchange rates, the market will grow by six per cent year on year, due to foreign exchange fluctuation, the analyst added.
IDC claims the services market is forecast to top $1.1tn (€861bn) in 2021, adding this is consistent with what major vendors have been reporting in the first and second quarters of this year.
"The need for digital transformation and the demographic squeeze on (the right) talent pool, expedited by the pandemic, global supply chain disruptions, and loose monetary policies, have created the perfect push and pull for enterprise buyers; therefore, our long-term growth outlook for the IT and business services market remains sanguine," said IDC Global Services Markets and Trends research director, Xiao-Fei Zhang.
"Additionally, we are seeing large services providers also making big bets, both organic and inorganically, on the operations and product side, which enjoys more than twice the market growth of the existing IT/business services market, according to our latest Digital Engineering & Operational Technology Tracker's latest figures."
The research firm further claims the market will continue to expand through 2023 and 2024 with growth between 3.8 per cent to four per cent annually.
It explained a better economic outlook has contributed to the improved optimism, but the main driver was the stronger demand for IT and business services across several regions outside the US, particularly where large government-led digitalisation programs and schemes are taking place (Europe, APAC).
US and Europe
IDC figures show the US services market is forecast to grow by 2.4 per cent in 2021, down slightly from the April forecast in constant currency.
The outlook for the US remains largely unchanged with projects, managed services, and support services recovering in 2021, the analyst said.
Despite US GDP growth softening in recent months, IDC continues to project the US market to grow more than 2.3 per cent this year and 3.7 per cent in 2022.
IDC added the near-term outlook for Europe remains sanguine and unchanged.
Europe's recovery this year will fuel global recovery for the IT services market, accounting for around 30 per cent of annual growth worldwide.
Western Europe's annual growth rate over the next few years has been adjusted upward again by around 25 basis points due to an improved outlook across the major continental European economies.
IDC said it is "confident" the region will continue to grow above three per cent in the following years, which will markedly outpace GDP growth, owing to European governments' stimulus spending and long-term investment policies to target digital transformation and new industries.