The Information Technology Market: Size, Share, Trends, Growth Outlook and Company Analysis

The information technology (IT) market is a rapidly growing industry that encompasses a wide range of technologies, services, and products. This market includes everything from hardware and software to cloud computing, cybersecurity, and data analytics. The global IT market size was valued at USD 5.2 trillion in 2020, and it is expected to grow at a compound annual growth rate (CAGR) of 7.2% from 2021 to 2028.

The information technology (IT) industry encompasses the use of computers, computer peripherals, and telecommunications equipment for storing, retrieving, transmitting, and moving data. It includes technologies such as computer networking, broadcasting, systems design services, and information distribution technologies like television and telephones.

One of the major drivers of growth in the IT market is the increasing demand for digital transformation across all industries. As businesses strive to become more efficient and competitive, they are turning to technology solutions to streamline their operations and improve their customer experience. This has led to a significant increase in demand for cloud computing, artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT).

The latest development in IT services as of 2019 is the Internet of Things (IoT), which refers to a network of physical objects like vehicles, devices, buildings, and other items that are equipped with electronics, sensors, software, and network connectivity to collect and exchange data. For instance, Rolls-Royce has partnered with Microsoft to integrate its intelligent engines with Microsoft Suite to enhance its digital skills.

The IT service market is concentrated with several major global players, where the top five competitors hold about 30% of the total market share. IBM is the largest competitor followed by Accenture, HPE, Microsoft, and SAP. With the rise of open-source software platforms, more companies are contributing to open-source projects to build applications.

Another trend in the IT market is the shift towards remote work and virtual collaboration. The COVID-19 pandemic has accelerated this trend, as businesses have had to rapidly adapt to remote work in order to continue operating. This has led to an increased demand for cloud-based collaboration tools, video conferencing software, and cybersecurity solutions.

The COVID-19 pandemic has had a significant impact on the IT market, with supply chains disrupted due to trade restrictions, and employees facing infrastructure and communication difficulties because of lockdowns. However, this pandemic is considered a “black swan event” and not a reflection of ongoing weaknesses in the market or the global economy. The IT market is expected to recover from this shock and continue its growth trend throughout the forecast period.

According to The Business Research Company’s information technology market report, the demand for IT services is anticipated to be propelled by the rising demand for cloud computing services during the forecast period. In the cloud computing model, data storage is managed and operated as a service by a cloud computing provider on the internet.

The market for cloud computing is expected to continue to grow, driven by the increasing use of cloud-based software-as-a-service (SaaS) solutions and the migration of enterprise workloads to the cloud. The market for big data analytics is also expected to grow, driven by the increasing demand for data-driven insights across a range of industries.

Cloud computing providers store data on the internet and offer it as a service, with many businesses opting for cloud-based applications and data storage for their day-to-day operations. This trend is expected to continue, with 94% of enterprise workloads projected to be processed by cloud data centres in 2021.

Artificial intelligence is another area of rapid growth in the IT market, with applications in areas such as predictive analytics, natural language processing, and computer vision. The market for IoT devices is also expected to grow rapidly in the coming years, driven by the increasing use of connected devices in homes, businesses, and industries.

Some of the key players in the IT market include IBM Corporation, Microsoft Corporation, Cisco Systems Inc., Oracle Corporation, and Amazon Web Services Inc. These companies are investing heavily in new technologies such as AI, ML, and blockchain, and they are also expanding their offerings to include more comprehensive solutions that address multiple aspects of digital transformation.

Also, in terms of geography, China and India will be among the fastest-growing markets for IT solutions, driven by cloud computing and mobile devices. North America and Europe are also significant markets, with a strong focus on cybersecurity and data analytics.

The global information technology market experienced a compound annual growth rate (CAGR) of 8.2%, growing from $8179.48 billion in 2022 to $8852.41 billion in 2023. However, the Russia-Ukraine conflict has disrupted the global economic recovery from the COVID-19 pandemic in the short term, leading to economic sanctions on several countries, supply chain disruptions, and inflation across goods and services. Despite this, the information technology market is projected to grow at a CAGR of 7.9%, reaching $11995.97 billion by 2027.

As a result, the IT market is defined as the revenue generated by entities providing IT services, such as computer networking, broadcasting, design services, and information distribution technologies like TV and telephones. It also includes sales of computers, computer peripherals, and telecommunications equipment used in providing IT services. 

The market value is generated by service providers selling or including related goods. Only goods and services traded between entities or sold to end consumers are included in this market. The value of goods in this market includes related services sold by the creators of the goods. These values represent the “factory gate” values, i.e., the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers.

As such, market value refers to the total revenue generated by businesses from selling their goods and/or services within a specific market and geographic region, including sales, grants, or donations, typically in USD.

The revenues generated within a particular geographical region are consumption values and include all revenues produced by organizations within that region’s market, regardless of where they are manufactured. However, it does not include revenues from reselling products further along the supply chain or as part of other products.

The global information technology market is segmented into several categories, including IT services, computer hardware, telecom, and software products. It is further classified based on organization size, including large enterprises and small to medium-sized enterprises, and end-user industries, such as financial services, retail and wholesale, manufacturing, healthcare, and other end-user industries.

Additional sub-segments within the IT market include hardware support services, software and BPO services, cloud services, computer peripheral equipment, computer storage devices and servers, computers, wireless and wired telecommunication carriers, communication hardware, satellite and telecommunication resellers, operating systems and productivity software publishing, database storage and backup software publishing, business analytics and enterprise software, video game software, and design, editing, and rendering software.

In the past five years, low-cost open-source alternatives have become increasingly prevalent, and open source has emerged as a preferred platform for developing new technology. While software publishers used to use open-source software that was not profitable, companies now use open-source software to expand their market share. Recently, Supabase, a YC-incubated startup providing developers with an open-source alternative, raised $6 million in funding to develop new open-source tools.

The continuous challenge for IT leaders is enterprise IT security, as companies operate in a dynamic and technology-driven environment, making their digital properties vulnerable to cyber threats. Globally, cybercrime networks are worth $100 billion, which is twice the amount that companies spend on protecting their information resources.

In terms of regional insights, the Asia Pacific is the largest region in the IT market, accounting for around 40% market share, followed by North America with 25% market share, and Africa with the smallest market share of around 2%. The Global Information Technology Market Report provides policymakers, marketers, and senior management with the necessary information to make informed decisions about the global IT market.

Overall, the IT market is expected to continue growing in the coming years, driven by the increasing demand for digital transformation, remote work solutions, and advanced technologies. However, as the market becomes more crowded and competitive, companies will need to differentiate themselves by offering innovative and comprehensive solutions that meet the evolving needs of their customers. Therefore, it’s important to keep up-to-date with the latest trends and developments to make informed investment decisions.