IDC says IT services grew 4.5% in 2018 as businesses continue to increase spending on outsourced support and development
In 2018, the overall global IT service market topped $1 trillion, led by the United States as the largest service market in the world. Businesses continue to increase spending on outsourced support, subscription applications, software development, and managed services.
The Lowdown: According to the IDC Worldwide Semiannual Services Tracker, IT service sales topped $513 billion in the second half of 2018, bringing the yearlong total to more than $1 trillion for the first time. IT services grew at an annual rate of 4.5%, outpacing global and regional GDP, as more companies around the world look to outside providers for everything from managed services and cloud applications and infrastructure to professional services and application development.
The Details: IDC says growth of the IT service market is powered by healthy increases in spending on business consulting (up 8.3%) and custom application development (up 7.5%). Managed services increased 3.6% to $473 billion on the year. Application managed services — inclusive of managed cloud systems — increased 5.8% to $80 billion on the year.
Geographically, the United States is the largest IT service market in the world. Spending in the U.S. increased 4.6% to $459 billion. Western Europe, the second-largest service market, grew 3% to $266 billion on the year. The Asia-Pacific service market grew 6.2% to $110 billion — a slower pace than normal due to trade tensions.
The Buzz: “Steady growth in the service markets are driven by a continued demand for digital solutions across the regions, with the Americas continuing to contribute to the bulk of the revenue growth,” said Lisa Nagamine, research manager for IDC’s Worldwide Semiannual Services Tracker. “2018 surpassed the trillion-dollar mark, as we had forecasted at the end of 2017. We expect future growth in many geographies worldwide in coming years.”