Bohodev.com – The global information technology services market is on a trajectory for robust, sustained expansion over the next five years, according to a new forecast from leading research firm Forrester. The analysis projects that worldwide enterprise spending on IT services will grow at a compound annual growth rate (CAGR) of 4.8% from 2024 through 2029. This growth is underpinned by a broad spectrum of technology offerings, encompassing traditional consulting and managed services, application development, and comprehensive digital transformation initiatives. Notably, the forecast highlights the accelerating integration of next-generation technologies, with cloud computing infrastructure and generative artificial intelligence (GenAI)-enabled automation standing out as the twin engines propelling market demand forward. This trend signals a decisive shift in corporate investment priorities toward capabilities that promise enhanced agility, innovation, and operational efficiency.
Cloud services, particularly Infrastructure as a Service (IaaS), are identified as a dominant force within this growth narrative. Forrester projects IaaS specifically to surge at an extraordinary CAGR of 21.9% through 2030, a rate it notes is approximately double that of the software segment. This explosive demand is not uniform but shows distinct regional characteristics. In the Asia-Pacific region, for instance, major Indian IT service providers like Tata Consultancy Services and Infosys are reporting strong demand for sovereign cloud solutions, while Australian enterprises are rapidly adopting hybrid cloud models. Drivers in these markets extend beyond mere cost savings, heavily emphasizing critical factors such as regulatory compliance, data sovereignty, and the need for scalable, resilient infrastructure to support business expansion.
Parallel to the cloud boom, generative AI has emerged from experimental labs to become a core component of enterprise IT strategy, directly fueling services growth. Forrester’s analysis directly links the expansion of the IT services market to the proliferation of GenAI programs within large organizations. The technology is no longer a standalone curiosity but is increasingly woven into broader cloud migration and business process automation projects. This integration is evident globally, with adoption rates expected to vary. For example, while Goldman Sachs anticipates 10-20% of Chinese enterprises will adopt GenAI by 2030, the focus differs in mature markets like Singapore, where firms are prioritizing AI-driven cybersecurity and compliance tools to navigate complex regulatory landscapes.
The forecast also delineates significant sector-specific spending patterns, with financial services and the public sector leading technology investment in the Asia-Pacific region. Banking and insurance institutions are channeling funds into large-scale technology modernization programs, motivated by stringent regulatory compliance mandates and the pressing need to address legacy system obsolescence. Simultaneously, public sector and defense projects in nations like Australia and Singapore are actively exploring the application of generative AI to enhance operational efficiency and improve data-driven decision-making capabilities. This sectoral demand underscores a move beyond generic IT solutions toward tailored, outcome-oriented services that address industry-specific challenges.
The competitive landscape of the IT services industry is concurrently being reshaped by strategic consolidation and evolving pricing models. Forrester points to aggressive merger and acquisition activity as a key growth lever for major players, with Accenture notably capturing nearly half of its 2024 revenue growth through acquisitions. Other giants like Capgemini and NTT DATA are expanding their geographic and service footprints, with the latter achieving the fastest growth among top-20 providers by capitalizing on soaring demand for digital transformation and AI services. As generative AI work becomes more commonplace, Forrester also anticipates a shift in pricing structures, moving from traditional time-and-materials models toward more value-based and outcome-linked contracts, reflecting the transformative potential these advanced services promise to deliver.
