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April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Company Profiles, April 2024

Accenture plc

Company Overview

Accenture plc (Accenture or "the company") is a provider of management consulting, technology, and outsourcingservices to clients across a broad range of industries.
It serves food and beverage, household goods, personal care, tobacco, fashion/apparel, agribusiness, and consumer health companies such as supermarkets, hardline
retailer, mass-merchandise discounters, department stores, and specialty retailers; as well as airlines and hospitality and travel services companies. The company also
serves to media and entertainment industry group serves the broadcast, entertainment, print, publishing, and Internet/social media industries. It also operates in the
Americas, Europe, the Middle East and Africa (EMEA), and Asia-Pacific. The company is headquartered in Dublin, Ireland.The company reported revenues of (US
Dollars) US$64,111.8 million for the fiscal year ended August 2023 (FY2023), an increase of 4.1% over FY2022. In FY2023, the company's operating margin was
13.7%, compared to an operating margin of 15.1% in FY2022. In FY2023, the company recorded a net margin of 10.7%, compared to a net margin of 11.2% in FY2022.
The company reported revenues of US$15,799.5 million for the second quarter ended February 2024, a decrease of 2.6% over the previous quarter.

Business Description

Accenture plc (Accenture or "the company") is a global management consulting, technologyservices, and outsourcing company. The company operates in more than
200 cities in 49 countries across the Americas, Europe, the Middle East and Africa (EMEA), and Asia-Pacific.

The company classifies its business operations into five industry groups: Products; Communications, Media and Technology; FinancialServices; Health and Public
Services; and Resources.

Through products segment, Accenture serves a set of increasingly interconnected consumer-relevant industries. Its consumer goods, retail and travel services industry
group serves food and beverage, household goods, personal care, tobacco, fashion/apparel, agribusiness and consumer health companies; supermarkets, hardline
retailers, mass-merchandise discounters, department stores, and specialty retailers; as well as airlines and hospitality and travel services companies. The industrial
industry group works with automotive manufacturers and suppliers; freight and logistics companies; industrial and electrical equipment, consumer durable and heavy
equipment companies; and construction and infrastructure management companies. In FY2023, the products segment reported revenue of US$19,103.8 million, which
accounted for 29.7% of the company's revenue.

Under communications, media, and technology segment, the company serves the communications, electronics, high technology, media, and entertainment industries.It
comprises of communications industry group which serves wireline, wireless, cable and satellite communications, and service providers. Electronics and high tech
industry group serves the information and communications technology, software, semiconductor, consumer electronics, aerospace and defense, and medical equipment
industries. Media and entertainment industry groups serve the broadcast, entertainment, print, publishing, and Internet/social media industries. In FY2023, the
communications, media, and technology segment reported revenue of US$11,452.9 million, which accounted for 17.8% of the company's revenue.

Financial services segment serves banking, capital markets, and insurance industries. Professionals in this operating group work with clients to address growth, cost and
profitability pressures, industry consolidation, regulatory changes, and the need to continually adapt to new digital technologies. Its financial services operating group
comprises of banking and capital markets industry group which serves retail and commercial banks, mortgage lenders, investment banks, wealth and asset management
firms, broker/dealers, depositories, exchanges, clearing and settlement organizations, and other diversified financial enterprises. In FY2023, the financial services
segment reported revenue of US$12,131.5 million, which accounted for 18.9%of the company's revenue.

Under health and public service segment, the company serves healthcare payers and providers, as well as government departments and agencies, publicservice
organizations, educational institutions and non-profit organizations around the world. The company offers its services to U.S. federal government through Accenture
Federal Services. It comprises of health industry group which works with healthcare providers, such as hospitals, public health systems, policy-making authorities,
health insurers (payers), and industry organizations and associations. The public service industry group work primarily with defense departments and military forces;
public safety authorities, such as police forces and border management agencies; justice departments; human services agencies; educational institutions, such as
universities; non-profit organizations; and postal, customs, revenue and tax agencies. In FY2023, the health and public service segment reported revenue of
US$12,560.4 million, which accounted for 19.5% of the company's revenue.

Through resources segment, Accenture serves the chemicals, energy, forest products, metals and mining, utilities and related industries.It comprises of chemicals and
natural resources industry group which works with a range of industry segments, including petrochemicals, specialty chemicals, polymers and plastics, gases and
agricultural chemicals, among others, as well as the metals, mining, forest products, and building materials industries. The energy industry group serves a range of
companies in the oil and gas industry, including upstream, downstream, oil services, and new energy companies. Utility industry group works with electric, gas, and
water utilities around the world. In FY2023, the resources segment reported revenue of US$8,862.9 million, which accounted for 13.8% of the company's revenue.

Geographically, the company operates through three segments: North America, Europe, and Growth Markets. In FY2023, the North America segment accounted for
47.2% of the company's revenue, followed by Europe with 33.2%; and Growth Markets with 19.6%.

Accenture plc

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Table 6: Accenture plc: key facts COMPANY WEBSITE

DetailType Detail
1 Grand Canal Square Grand Canal Harbour, Dublin 2, Dublin,
Head office:
Ireland
Telephone: 35316462000
Fax: 35316462020
Number of
733000
Employees:
Website: www.accenture.com/ie-en
DetailType Detail
Financial year-end: August
Ticker: ACN
Stock exchange: New York Stock Exchange

International Business Machines Corporation

Company Overview

International Business Machines Corporation (IBM or 'the company') provides information technology products and services. The company develops and markets
systems hardware and software, infrastructure, and the technology-based product line includes artificial intelligence, analytics, blockchain,IT management, cloud
computing, IT infrastructure, automation, cybersecurity, and software development products. It also provides services, such as consulting, delivery and implementation
services, networking, application services. The company serves several industries, including public, banking and financial services, industrial, energy and utilities,
healthcare, manufacturing, telecommunications, consumer products, and retail. It has business presence across Europe, the Americas, Middle East, Asia Pacific, and
Africa. The company is headquartered in Armonk, New York, the US.The company reported revenues of (US Dollars) US$61,860 million for the fiscal year ended
December 2023 (FY2023), an increase of 2.2% over FY2022. In FY2023, the company's operating margin was 14%, compared to an operating margin of 1.9% in
FY2022. In FY2023, the company recorded a net margin of 12.1%, compared to a net margin of 2.7% in FY2022. The company reported revenues of US$14,462 million
for the first quarter ended March 2024, a decrease of 16.8% over the previous quarter.

Business Description

International Business Machines Corporation (IBM or 'the company') provides information technology products and services. The company's products and services
include systems hardware and software, hosting, infrastructure, and consulting services.

The company classifies its business operation into five reportable segments: Software, Consulting, Infrastructure, Financing, and Other.

The Software segment provides hybrid cloud platform and software solutions to help its clients become more data-driven, and to automate, secure and modernize their
environments. It also includes software, such as Hybrid Platform & Solutions and Transaction Processing. The Hybrid Platform & Solutions include Red Hat,
Automation, Data & AI, and Security. The Transaction Processing includes the software that supports clients' on-premises workloads in industries such as banking,
airlines and retail. In FY2022, the Software segment reported revenue of US$25,037 million, which accounted for 41.4% of the company's revenue.

The Consulting segment offer deep industry expertise and capabilities in business transformation and technology implementation. With the aid of technology from IBM
and ecosystem partners, consulting creates open, hybrid cloud architectures and improves crucial business processes. In order to help customers accelerate their digital
transitions, consulting leverages the IBM Garage technique to bring specialists together to co-create business products and solutions with the clients. It also includes
technology consulting, business transformation and application operations. In FY2022, the Consulting segment reported revenue of US$19,107.0 million, which
accounted for 31.6% of the company's revenue.

The Infrastructure offers solutions for hybrid cloud. It also includes remanufacturing and remarketing of used equipment with a focus on sustainable recoveryservices.
The segment also includes two business areas, Hybrid Infrastructure and Infrastructure Support. In hybrid cloud settings, Infrastructure Support offers clients a
completely integrated services experience. The comprehensive, proactive, and AI-enabled services provided by Infrastructure Support help clients' IT infrastructure
(hardware and software), whether on-premises and in the cloud, remain available and valuable. Maintenance for IBM products and other technological platforms is
included in the infrastructure services, along with support for open source and multi-vendor software and solutions. In FY2022, the Infrastructure segment reported
revenue of US$15,288 million, which accounted for 25.3% of the company's revenue.

The Financing segment offers financing solutions to facilitate IBM clients' acquisition of information technology systems,software and services. It also includes client
financing and commercial financing. The majority of the finance agreements support IBM's hybrid cloud platform and AI strategy by being used to purchase goods or
services that are essential to end users' business operations. In FY2022, the Financing segment reported revenue of US$645 million, which accounted for 1.1% of the
company's revenue.

In FY2022, the Others segment reported revenue of US$453 million, which accounted for 0.7% of the company's revenue.

Geographically, the company classifies its operations into three segments: United States, Japan, and Other countries.

As of December 2022, the company operated its business across 175 countries. In FY2022, the company generated 49.5% of its revenue from Other Countries followed
by United States (41.5%), and Japan (9.0%).

International Business Machines Corporation

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Table 7: International Business Machines Corporation: key facts COMPANY WEBSITE

DetailType Detail
1 New Orchard Road , Armonk, New York, United
Head office:
States
Telephone: 19144991900
Number of
305300
Employees:
Website: www.ibm.com
Financial year-end: December
Ticker: IBM
Stock exchange:
New York Stock Exchange

Hewlett Packard Enterprise Company

Company Overview

Hewlett Packard Enterprise Company (HPE or 'the company'), is a technology company that offers compute, storage, and data center networkingservices, enterprise
networking and security solutions. The company also provides wired and wireless local area network hardware products such as switches, routers, sensors, Wi-Fi access
points, and various software products including cloud-based management, network management, analytics and location services. It offers investment solutions such as
leasing, financing, IT consumption, utility programs, asset managementservices. HPE offers its solutions to commercial and large enterprise groups through resellers,
advisory firms, distribution partners, original equipment manufacturers, independent software vendors and system integrators. The company serves manufacturing,
telecommunications, public sector, financial services, health and life sciences, media and entertainment, service providers, and small and mid-sized business. It has
business presence in the Americas, Europe, Middle East, Africa and Asia Pacific. The company is headquartered in San Jose, California, the US.The company reported
revenues of (US Dollars) US$29,135 million for the fiscal year ended October 2023 (FY2023), an increase of 2.2% over FY2022. In FY2023, the company's operating
margin was 7.4%, compared to an operating margin of 2.5% in FY2022. In FY2023, the company recorded a net margin of 7%, compared to a net margin of 3% in
FY2022. The company reported revenues of US$6,755 million for the first quarter ended January 2024, a decrease of 8.1% over the previous quarter.

Business Description

Hewlett Packard Enterprise Company (HPE or 'the company') is a provider of technology solutions to optimize the customers' traditional information technology I(T).
The company's portfolio of offerings includes enterprise IT solutions, artificial intelligence, storage, compute, intelligent edge, networking, IoT, and server management.

The company operates through six reportable business segments: Compute, HPC & AI, Storage, Intelligent Edge, FinancialServices (FS) and Corporate Investments and
Other.

Under Compute segment, HPE provides general purpose servers for multi-workload computing and workload-optimized servers. It offers products such as HPE ProLiant
rack and tower servers, HPE BladeSystem, and HPE Synergy. It also provides operational and support services. In FY2022, Compute segment reported revenue of
S$12,519 million, which accounted for 43.9% of company's revenue.

Through HPC & AI segment, the company offers compute servers designed to support specific use cases. Its HPC portfolio provides Cray and HPE Apollo products that
are sold as supercomputing systems, including exascale supercomputers. Its Data Solutions portfolio provides the HPE Nonstop, HPE Superdome Flex and HPE
Integrity product lines for critical applications. The Edge Compute product portfolio provides Edge Compute business which consists of the HPE Edgeline products for
computing at the network edge. In FY2022, HPC & AI segment reported revenue of US$3,078 million, which accounted for 10.8% of company's revenue.

Under Storage segment, HPE deliver an intelligent data platform which provides customers to power of their data. It provides HPE Nimble Storage dHCI, and HPE
SimpliVity. It also provides HPE Primera, HPE Nimble Storage and HPE 3PAR primary storage solutions. The company offers its solutions for storage networking and
disk products such as HPE Modular Storage Arrays (MSA) and HPE XP, and secondary workloads and traditional tape products. In FY2022, Storage segment reported
revenue of US$4,681 million, which accounted for 16.8% of company's revenue.

The Intelligent Edge segment offers wired and wireless local area network (LAN), campus and data center switching, network security, software-defined wide-area-
network, and associated services to enable secure connectivity. The HPE Aruba product portfolio comprises of hardware products like Wi-Fi access points, switches and
gateways; software and services portfolio includes cloud-based management, network management, network access control, analytics and assurance, professional and
support services and location services software. In FY2022, Intelligent Edge segment reported revenue of US$4,654 million, which accounted for 16.3% of company's
revenue.

Under Financial Services segment, the company offers flexible investment solutions such as financing, leasing, IT consumption, and utility programs and asset
management services. It also supports financial solutions for on-premises flexible consumption models such as HPE GreenLake. In FY2021, FinancialServices segment
reported revenue of US$3,665 million, which accounted for 12.9% of company's revenue.

Through Corporate Investments and Other segment, HPE involved in the investment of Hewlett Packard Labs for research and development, HPE Ezmeral Container
Platform, HPE Ezmeral Data Fabric and the communications and media solutions (CMS) business. In FY2022, Corporate Investments and Other segment reported
revenue of US$3,665 million, which accounted for 4.4% of company's revenue.

Geographically, the company operates through three regions: Americas; Europe, Middle East and Africa; and Asia pacific and Japan. In FY2022, Americas accounted
for 40% of the company's revenue, followed by Europe, Middle East and Africa 36.1%, and the remaining 23.9% was contributed by Asia pacific and Japan. As of
October 2022, HPE had 12 million sq. ft. of space for administration and support operations; and 3 million sq. ft. of space for core data centers, manufacturing plants,
research and development facilities, and warehouse operations.

Hewlett Packard Enterprise Company

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Table 8: Hewlett Packard Enterprise Company: key facts COMPANY WEBSITE

DetailType Detail
1701 E Mossy Oaks Road Spring, Texas, United
Head office:
States
Telephone: 16782599860
Fax: 13026555049
Number of
62000
Employees:
Website: investors.hpe.com
Financial year-end: October
Ticker: HPE
Stock exchange: New York Stock Exchange

Fujitsu Limited

Company Overview
Fujitsu Limited (Fujitsu or "the company") is a provider of information and communication technology (ICT)services. The company's products portfolio comprises of
software, electronics devices, network, IT products and systems, and other products. Fujitsu provide services such as manage infrastructure services, business and
application services, hybrid IT and cloud services, and product support services. The company also provides key solutions such as infrastructure solutions, industry
solutions and business and technology solutions. It has business presence across various geographical regions including Japan, the Europe, Middle East, India and Africa
(EMEIA), Americas, Asia, and Oceania. The company is headquartered in Minato-Ku, Tokyo, Japan.The company reported revenues of (Yen) JPY3,756,059 million for
the fiscal year ended March 2024 (FY2024), an increase of 1.1% over FY2023. In FY2024, the company's operating margin was 4.3%, compared to an operating margin
of 9.2% in FY2023. In FY2024, the company recorded a net margin of 6.8%, compared to a net margin of 5.8% in FY2023.

Business Description

Fujitsu Limited (Fujitsu or "the company") offers solutions in the area of information and communication technology (ICT). The company's business encompasses the
development, manufacture, sale and maintenance of electronic devices. Its key products include software, electronics devices, network, and IT products and systems.
Fujitsu's major services include manage infrastructure services, business and application services, hybrid IT and cloud services, and product support services. The
company has presence in more than 150 countries including Japan, the Europe, Middle East, India and Africa (EMEIA), Americas, Asia, and Oceania.

The company operates through three business segments: Technology Solutions, Ubiquitous Solutions, and Device Solutions.

Through Technology Solutions segment, Fujitsu provides integration services for information technology (IT) system consulting and construction, and infrastructure
services centered on outsourcing services such as complete information system operation and management. The company also offers system platforms such as servers
and storage systems which form the backbone of information systems, along with network products such as mobile phone base stations, optical transmission systems,
and other communications infrastructures. Network products include mobile phone base stations, optical transmission systems, network management systems and other
equipment used to build communications infrastructure. In FY2023, the segment reported revenue of JPY3,156,810 million, which accounted for 85% of the company's
revenue.

Under Ubiquitous Solutions segment, the company is engaged in the manufacturing of personal computers (PCs), mobile communication equipment and mobile phones.
The company's PCs include desktop PCs, laptop PCs, water- and dust-resistant tablets, and customization options. It offers connectivity products such as car navigation
systems, mobile communication equipment and automotive electronics. In FY2023, the segment reported revenue of JPY188,612 million, which accounted for 5.1% of
the company's revenue.

Under Device Solutions segment, Fujitsu provides LSI devices and electronic components. Its electronic components include semiconductor packages, batteries,
structural components such as relays, connectors, optical transceiver modules, and printed circuit boards. In FY2023, the segment reported revenue of JPY368,345
million, which accounted for 9.9% of the company's revenue.

Geographically, the company classifies its business operations into two regions: Japan and Outside Japan. In FY2023, the Japan accounted for 61.7% of the company's
revenue and Outside Japan with 38.3%.

Fujitsu Limited

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Table 9: Fujitsu Limited: key facts COMPANY WEBSITE

DetailType Detail
Shiodome City Center 1-5-2, Higashi-Shimbashi, Minato-Ku, Tokyo,
Head office:
Japan
Telephone: 81362522220
Number of
124055
Employees:
Website: www.fujitsu.com
Financial year-end: March
Ticker: 6702
Stock exchange: Tokyo Stock Exchange

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Competitive Landscape, April 2024

The global IT services market is characterized by a dynamic environment shaped by rapid technological advancements, evolving customer demands, and intense
competition among a diverse array of players. Global IT giants such as IBM, Accenture, Fujitsu, and HPE compete alongside regional players and niche service
providers, offering a wide range of services including software development, consulting, infrastructure management, and cloud computing. Additionally, the emergence
of disruptive technologies like artificial intelligence, blockchain, and the Internet of Things (IoT) has further intensified competition, as firms race to innovate and
differentiate their offerings. Price competition is prevalent, especially in commoditized segments, driving firms to optimize costs. Strategic partnerships and mergers
shape the landscape as companies seek expansion and differentiation. Amidst intense competition, customer focus, innovation, and agility are crucial for success in this
dynamic market.

Who are the leading players?

Accenture Plc Accenture is one of the key players in the global IT services industry. It is headquartered in Dublin, Ireland, and provides services and solutions in
strategy, consulting, digital, technology, and operations areas. The company operates business processes for enterprise functions such as sourcing and procurement,
finance and accounting, supply chain, marketing, and sales. The company's solutions find applications in various industries, including consumer goods, retail and travel
services, banking and capital markets, software and platforms, and industrial and life sciences. The company serves the agribusiness, automotive, banking, capital
markets, retail, travel, health, chemicals, media and technology, and communications industries. International Business Machines Corp IBM provides global hybrid
cloud, AI, and consulting solutions and services. It is headquartered in Armonk, New York, the US. The company's product portfolio includes analytics, artificial
intelligence, automation, blockchain, cloud computing, IT infrastructure, IT management, cybersecurity, and software development products. It also offers services such
as cloud, networking, security, technology consulting, application services, business resilience services, and technology support services. The company classifies its
business operations into five reportable segments: Software, Consulting, Infrastructure, Financing, and Other. In FY2023, the software and consulting segment
contributed the highest revenue of $26.3 billion and $20.0 billion, respectively. Fujitsu Ltd Fujitsu provides a comprehensive range of technology products, solutions,
and services. The company also offers consulting services, system integration solutions, IT infrastructure management, and system products. It is headquartered in
Minato-Ku, Tokyo, Japan, and offers application, business transformation, enterprise and cybersecurity, network, and communication services. It markets products under
the Fujitsu brand. The company serves various industries, including automotive, manufacturing, retail, financial services, transport, public sector, energy and utilities,
and services providers. The company generates a majority of its revenue from Japan. In FY2023 (ended March), the company reported revenue of JPY2,290.3 billion
($16.3 billion) from Japan. Hewlett Packard Enterprise Co HPE provides intelligent solutions and cloud-based services. Its service portfolio includes information
technology (IT) consulting, IT support, education and training services. HPE serves commercial and large enterprise groups, including business and public sector
enterprises, small and medium-sized businesses, financial services, healthcare, manufacturing, and telecommunications industries. The company classifies its business
operations into six reportable segments: Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, Corporate Investments, and others.

What strategies do the leading players follow?

Accenture in FY2023 made substantial investments in patents and pending patents, research and development (R&D), functional solutions, strategic acquisitions,Â
and recruiting, training, and developing personnel. Through these efforts, the company aims to improve its marketability and competitiveness. Its strategic
approach to acquisitions, which catalyzes organic expansion, is centered on growing the company in high-growth sectors, expanding industry and functional
knowledge, and acquiring new skills and capabilities. The company spent $1.3 billion on R&D, $1.1 billion on learning and professional development, and $2.5 billion
on 25 strategic acquisitions in the fiscal year 2023. It focuses on R&D activities to improve the performance of products and develop new technologies. Its R&D
capabilities enable the company to overcome technical barriers encountered in the commercialization of sophisticated consulting, technology, and outsourcing offerings
through its Accenture Research, Accenture Ventures, and Accenture Labs, Studios, and Innovation Centers, a network of more than 100 innovation hubs and delivery
centers. IBM partners with the world's leading technology enablers, which help it increase revenue and market share. By collaborating with major players such as
Adobe, Amazon Web Services (AWS), Microsoft, Oracle, Salesforce, Samsung Electronics, and SAP, it gains access to advanced technologies, expertise, and resources
across various domains, including cloud services, software solutions, and managed services. These partnerships enable the company to offer end-to-end solutions that
address complex business challenges faced by its clients, providing them with innovative and comprehensive offerings. For instance, in April 2024, IBM Cloud and
Fortinet partnered to introduce the Fortinet Virtual FortiGate Security Appliance (vFSA) on IBM Cloud. Also, the company makes R&D investments to advance the
fundamental science of several critical technologies, including AI, quantum computing, and semiconductors. In FY2023, the company incurred expenses of $6.8 billion
on research, development, and engineering (RD&E), which as a percentage of revenue, stood at 10.9%. Fujitsu aims to upgrade its customers' current IT systems with
an emphasis on cloud migration and using data and digital technology to solve management problems. It aims to improve international offers and broaden the range of
services. The company intends to enhance traditional SI business by using data and AI more effectively. In keeping with the goal, the business and Whitbread
partnered in March 2023 to improve IT services for the Premier Inn and restaurant brands. Moreover,it focuses on product development and research for bringing new
products into the market. It aims to develop advanced emerging technologies, extend its value chain globally, and create new businesses. The company focuses its R&D
resources on five technology areas including computing, AI, network, data and security, and converging technologies. Besides R&D in each technology area, it also aims
to advance technology integration so that it can provide comprehensive value by combining five technology areas. In FY2023, the company incurred expenses of
JPY109.5 billion ($781.5 million) on R&D, which as a percentage of revenue, stood at 2.9%.

What are the strengths of the leading player?

Accenture is one of the world's leading IT services companies that offers consulting and outsourcing solutions. It has a wide geographical presence with operations
spread across the Americas, Europe, Asia-Pacific, Latin America, Africa, and the Middle East. The company has offices in the world's leading business centers,
including San Francisco, Boston, Chicago, New York, London, Madrid, Dublin, Frankfurt, Milan, Beijing, Manila, Paris, Rome, Bangalore, Mumbai, Sao Paulo,
Shanghai, Tokyo, Singapore, and Sydney. Accenture has offices and operations in over 200 cities in 49 countries globally. As of August 2023, the company served
clients in more than 120 countries. IBM operates in over 175 countries and serves clients across industries. Its global reach and customer relationships provide a stable
revenue stream and opportunities for growth and expansion. It also helps the company to mitigate risks by reducing its dependence on any particular customer segment.
It provides IT services, including software development, infrastructure, hosting, and consulting services globally across the Americas, Asia-Pacific, Europe, the Middle
East, and Africa. HPE has a diversified geographical presence across the Americas, the Middle East, Europe, Africa and Asia-Pacific. As of December 2022, the
company had seven million square feet of space for administration and support operations; and two million square feet of space for core data centers, manufacturing
plants, research and development facilities, and warehouse operations. Fujitsu holds a strong market position which enables the company to attract and retain a wide
customer base and develop a competitive edge over peers. The company is the number one IT services provider in Japan. It is the 10th largest IT services provider in the
world. The company provides its services in about 100 countries worldwide.

What are the most recent developments in the market?

In April 2024, IBM announced the establishment of a new Cloud Multizone Region (MZR) in Montreal, Quebec. With the use of a secure, business cloud platform
and cutting-edge technologies such as generative AI, the facility will be built to assist clients in meeting their changing regulatory needs. The three Availability Zones
that make up the Montreal MZR are remote areas inside data centers or cloud infrastructure that are intended to offer availability, reliable cloud services, and increased
resilience to support customers in carrying out mission-critical workloads. Businesses will be able to fully utilize the potential of hybrid cloud and AI due to the new
Cloud MZR, which will act as a catalyst for revolutionary breakthroughs. In November 2023, Accenture acquired Solnet, a New-Zealand based IT services provider.
The acquisition strengthens the company's local cloud and infrastructure engineering services. It supports long-term engagements and helps clients design, automate, and
optimize complex business processes. It also strengthens Accenture's position in the New Zealand market and enhances its ability to deliver large-scale projects. In
October 2023, Fujitsu announced an absorption-type merger with its consolidated subsidiary, Fujitsu Cloud Technologies Limited (FJCT). Fujitsu Cloud, which is fully
owned by its parent company, provides public and private cloud services via its FJcloud-V and Nifcloud divisions. By merging FJCT's cutting-edge cloudservice
development technology with its enterprise service delivery capabilities, this absorption-style merger will enable Fujitsu to expedite the adoption of the newest
technologies and further enhance transparency, security, and dependability in this field. In May 2023, IBM launched IBM Hybrid Cloud Mesh, a SaaS solution at
ONUG today, to help businesses manage their hybrid multi-cloud architecture. IBM Hybrid Cloud Mesh, powered by "Application-Centric Connectivity," is
designed to assist modern enterprises manage their infrastructure across hybrid multi-cloud and heterogeneous environments by automating the process,
management, and observability of application connectivity in and between public and private clouds.

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Executive Summary, April 2024

Market value

The global IT services industry grew by 9.5% in 2023 to reach a value of $1,612.2 billion.
Market value forecast

In 2028, the global IT services industry is forecast to have a value of $2,936.3 billion, an increase of 82.1% since 2023.

Category segmentation

Infrastructure services is the largest segment of the global IT services industry, accounting for 62.9% of the industry's total value.

Geography segmentation

North America accounts for 34.9% of the global IT services industry value.

Market rivalry

The IT services industry is fragmented, with small players competing alongside large multinationals. Services have become increasingly globalized and are expected to
become gradually automated, particularly due to the adoption of cloud computing services. Moreover, the industry is evolving from offering services such as
outsourcing, which improves productivity and efficiency, to providing value-added services such as analytics consulting. This has increased rivalry as players seek to
capture a share of these higher-margin sectors.

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Five Forces Analysis, April 2024

The IT services market will be analyzed taking information and communications technology companies as players. The key buyers will be taken as small businesses to
multinational companies and government agencies, and providers of hardware devices and softwares, as well as skilled employees as the key suppliers.

Summary

Figure 5: Forces driving competition in the global IT services industry, 2023 MARKETLINE

The IT services industry is fragmented, with small players competing alongside large multinationals. Services have become increasingly globalized and are expected to
become gradually automated, particularly due to the adoption of cloud computing services. Moreover, the industry is evolving from offering services such as
outsourcing, which improves productivity and efficiency, to providing value-added services such as analytics consulting. This has increased rivalry as players seek to
capture a share of these higher-margin sectors.

In the IT services industry, buyers are often businesses and governments. These buyers range in size with large buyers holding more power due to greater financial
muscle. Moreover, the industry consists of a large number of buyers which reduces their power. Brand recognition is of significant importance to customers and many
look to reputable companies for services. This is particularly the case for players involved in IT outsourcing and data processing, where consistent quality and security
are key factors in winning contracts.

Skilled employees, as suppliers of technical knowledge and expertise, are an important input. Other inputs include hardware components, which tend to be purchased
from a sole supplier, increasing their power. In contrast, some companies engage in backward integration with their own hardware and software capabilities, which
reduces their reliance on external suppliers.

The threat of new entrants is nevertheless very strong due to the ease of entry, the rapid growth of the industry, and the proliferation of niche applications to which start-
ups cater. The players can enter the industry on a small scale with low start-up costs and significantly low infrastructure investment. This increases the likelihood of new
entrants. However, the requirement for specialized knowledge and skills is likely to prevent new entrants in the industry.

A substitute is to employ and train in-house staff to provide IT services. In times of economic difficulty, some companies may rely on existing staff rather than third-
party service providers. However, the services offered by industry players do provide several key advantages. As such, the threat from substitutes remains moderate.

Buyer Power

Figure 6: Drivers of buyer power in the global IT services industry, 2023 MARKETLINE

Buyers range in size from small businesses to multinational companies and government agencies. Larger buyers, with greater financial muscle, exert more buyer power
as compared to small ones. Also, the industry consists of several buyers, which are growing significantly due to the rising number of SMEs worldwide. For instance,
according to the US Small Business Administration (SBA), in 2023, there were 33.3 million small businesses in the US. According to the China Association of Small
and Medium Enterprises, the Small and Medium Enterprises Development Index for 2023 was 89.2, up from 88.4 in 2022, based on a survey of 3,000 SMEs from eight
major industries. This rise in a buyer number is reducing their power.

Contracts between industry players and buyers vary according to the service provided. Some IT service contracts can last for several years, which can translate into
substantial switching costs for buyers should they wish to terminate the agreement early. However, consulting contracts tend to be shorter and there is a growing trend
toward shorter-duration contracts. Contracts with large customers are often secured after a bidding process. Consequently, such customers enjoy greater buyer power.

The market players offer slightly undifferentiated products, giving buyers the upper hand, as they can choose from a variety of market players. However, brand
recognition is likely to be of significant importance to customers, particularly when it comes to electronic data processing. Buyers will often look to a reputable company
for such services; this is especially the case regarding government contracts, which have heightened media scrutiny in terms of IT failures. Services offered are often
critical to the successful operation of a business, which reduces buyer power considerably.

Full backward integration by buyers is unlikely, even in cases where in-house IT services have been developed. Those IT services cannot match the quality of products
the industry players can provide due to years of experience, decreasing buyer power overall. Although this could decrease buyer power, it is mitigated by the fact that
players are reluctant to integrate forwards into buyers' areas of operation, industries in which players may not necessarily have any experience.

The undifferentiated nature of the industry has given rise to strong price competition, driven by a reduction in labor costs, and has encouraged multinational providers to
relocate to low-cost locations. This shows the power that buyers have in influencing player practices. Large-scale players seek to differentiate themselves in terms of
customer relations and are likely to become more successful as they develop more complex offerings. IBM, for instance, has developed 'System One', a quantum
computer that is 1,000 times faster than a normal computing system, which can offer its services to all institutions around the world via cloud access. This will serve to
weaken buyer power. While some smaller companies may seek to drive down the cost of services by seeking the best prices from players, for many buyers, the quality of
the services offered is of the utmost importance as the quality of the buyer's product is greatly affected by this. Multinational corporations and government agencies need
to ensure they obtain a high-quality product as failures could be extremely costly. However, since government agencies and big corporations often employ industry
players through auctions or price competitions, they force industry players to compete with each other for the same kind of services, giving buyers the power to choose
the best price. Therefore, in this industry, there is a mix of buyers willing to pay less for services and willing to pay more for high-quality services.

Overall, buyer power is assessed as moderate.

Supplier Power

Figure 7: Drivers of supplier power in the global IT services industry, 2023 MARKETLINE
The suppliers in the industry include IT hardware manufacturers, software providers, and a skilled workforce. Inputs such as hardware components are often purchased
from sole suppliers; these tend to be large companies offering differentiated products, resulting in significant supplier power. The leading global hardware companies
include Dell, Microsoft, Lenovo, HP, and ASUS. Also, IT service providers rely heavily on computer hardware for offeringservices such as business process
outsourcing (BPO), application development, cloud computing, storage services, and others. This makes suppliers an irreplaceable part of the industry which, combined
with a diverse customer base and the importance of quality to the industry, increases supplier power. Also, the software industry is dominated by large international
companies, which hold substantial power. Leading suppliers in the global industry include Microsoft Corporation, Oracle Corporation, and SAP.

Skilled employees with appropriate technical knowledge and expertise are key to success in this industry, forcing players to rely on the continuedservice of highly
qualified and usually well-paid employees, which results in a high switching cost. Cost considerations are even more important in developed markets such as the US and
Europe, due to high labor costs. The US, Europe, and Japan are considered the 'triad' of knowledge economies and are at the forefront of many technological
developments. As such, there is a large pool of skilled labor in these economies, which reduces supplier power to an extent. However, in developing countries like China
and India, where the supply of qualified workforce may be inadequate, supplier power is increased, but lower staff turnover mitigates that.

The employment in tech industry is rising, which is expected to boost suppliers, reducing their power. According to the US Bureau of Labor Statistics, from 2022–32, the
total employment in computer and information technology (IT) occupations is expected to expand at a much greater rate than the average for all occupations. Due to job
growth and the need to replace workers who leave the sector permanently, an average of 377,500 openings per year are expected for these occupations. Also, according
to the India Brand Equity Foundation (IBEF), in 2023, direct employment in the IT services and BPO/ITeS category in India reached 5.4 million, up 290,000 over 2022.

Taking into consideration that suppliers in this industry are mainly highly paid and skillful employees,it makes the industry a crucial component of suppliers'
livelihoods, due to their specialized expertise in providing services based on this specific industry. Suppliers could likely move into the industry themselves, due to the
experience they could acquire over their careers, making them willing and confident to start their own companies and organizations. The amount of alternative raw
materials is relatively low, as raw materials in this industry are hardware components and software, which increases supplier power.

Large players such as IBM engage in backward integration as it has its own hardware and software capabilities – reducing its reliance on external suppliers. This slightly
reduces supplier power. Also, software suppliers may begin to forward integrate once more complex software is required to provide IT services linked to powerful
computers, offering parallel processing and advanced analytical techniques, which will increase supplier power. Microsoft, for example, runs a predictive analytics
service based around its Azure cloud platform, while IBM offers access to its new quantum computer System One to institutions around the world through the cloud.

Overall, supplier power in this industry is assessed as strong.

New Entrants

Figure 8: Factors influencing the likelihood of new entrants in the globalIT services industry, 2023 MARKETLINE

Certain industries, such as software development or consultancy, may have minimal entry barriers for newcomers asit require little capital investment in infrastructure,
IT hardware, and a small number of employees. However, industries such as cloud computing or cybersecurity require high investment in infrastructure setup, research
and development (R&D), and hiring personnel. Also, the industry for IT services requires specific technical expertise and abilities. To effectively compete, new entrants
need to have expertise in industry-specific domains, software development processes, and developing technologies.

Large companies in this industry have significant economies of scale in processing and can offer more services. Smaller companies can compete by specializing in
particular verticals and offering customized services. However, prominent companies, relying on an established image, may be unwilling to trust smaller, less
established companies, giving larger industry players an advantage. While there is a relatively large number of expert staff in this industry, many will be attracted to
firms such as IBM and Accenture as they are often able to offer greater incentives, such as development opportunities and higher pay. This may deter new entrants as
they may lack the reputation and ability to attract the most experienced staff.

The industry is subject to government regulations and policies related to cybersecurity standards, data privacy rules, and intellectual property which may prevent new
entrants. The General Data Protection Regulation (GDPR) of the European Union, the GDPR of the UK, recent comprehensive privacy laws passed by US states, and
numerous other federal and state laws in the US related to the protection of privacy, health information, and other personally identifiable information govern the industry.
Regulation is varied and largely dependent on the service offered and the buyers involved. For example, data processing services for financial institutions are often
stringently regulated. In the US, they are subject to examination by the Federal Financial Institutions Examination Council, an interagency body comprising the federal
bank, thrift regulators, and the National Credit Union Association. Restrictions on data flows between different countries may restrict the expansion capabilities of new
entrants. Some countries have introduced a variety of incentives in a bid to encourage new entrants, these include competitive tax rates, funding for start-ups, and R&D
programs. In Singapore, the government has introduced a range of policies and regulations to encourage innovation and support the Smart Nation initiative; this includes
encouraging technology start-ups by doing business with them rather than making them rely on grants. Regions that implement favorable policies are likely to attract
new entrants.

Fixed costs for certain industry segments are relatively high, due to the energy and electricity consumption server rooms require. To provide theirservices, even via the
cloud, IT companies require a large amount of space for their server rooms, consuming high levels of electricity. To provide high-endservices and keep them up to date,
server rooms require constant maintenance from highly expert personnel, increasing fixed costs.

Rapid innovation and technology breakthroughs define the IT services sector. Established firms may face serious threats from new competitors with disruptive
technology or creative service offerings, especially if they can fill gaps in the market or offer better value propositions. Increasing demand for the technology and
expertise to implement emerging technologies such as big data, e-commerce, and the IoT will continue to attract new entrants into the industry.

The need for IT services, including software development, cloud computing, data analytics, cybersecurity, and digital consultancy, is accelerating due to the push
towards digitalization. Cloud computing is becoming more and more popular as companies look for affordable, scalable, and flexible IT services and infrastructure.
Demand for cloud migration, administration, and optimization services is driven by cloud services, such as Infrastructure as a Service (IaaS), Platform as a Service
(PaaS), and Software as a Service (SaaS). According to GlobalData, in 2023, the global cloud computing market reached $394.9 billion, up 14.7% over 2022. Such
favorable demand is expected to attract new players in the industry.

Overall, the likelihood of new entrants to this industry is assessed as strong.

Threat of substitutes

Figure 9: Factors influencing the threat of substitutes in the global IT services industry, 2023 MARKETLINE

The industry includes indirect substitutes that might not provide an exact solution but can fulfill comparable requirements or offer different strategies. An alternative to
several services offered in this industry is to employ and train in-house staff to provide such services. In times of economic difficulty, some companies may rely on
existing staff rather than third-party service providers. For instance, for digital transformation, a corporation may choose to use self-learning materials and internet
resources or create an inside team. However, the services offered by industry players do provide several key advantages. Hence, indirect substitutes may not fully
replace IT services but can influence purchasing decisions based on factors like cost-effectiveness, control, and scalability.

In the IT services industry, disruptive breakthroughs and emerging technologies represent a serious threat of substitution. New methods or technologies may make
current services less appealing or outdated. For instance, the rise of machine learning (ML) and artificial intelligence (AI) technologies has facilitated the creation of
automated solutions that can carry out operations such as system monitoring and troubleshooting that were previously done by human IT specialists. The increasing
automation of IT services will pose difficulties for many players as buyers seek to bring more services in-house. This will also allow the service arms of hardware and
software suppliers to act as substitutes for traditional IT services players. Equally, professional services firms such as KPMG are increasingly offering IT services due to
the relative ease of replicating service models.

Overall, there is a moderate threat from substitutes in this industry.

Degree of rivalry

Figure 10: Drivers of degree of rivalry in the global IT services industry, 2023 MARKETLINE

The global IT services industry consists of numerous players, which increases the rivalry between the players. The industry is dominated by large global players such as
International Business Machines (IBM), Accenture, and Hewlett Packard Enterprise (HPE) while there exist small companies that focus on certain niches. Due to the
large number of competitors, there is fierce competition as businesses fight for contracts and industry dominance.

The number of competitors varies between countries. The US has more than 100,000software and IT services companies, over 99% of which are SMEs – which
increases rivalry in comparison to Brazil, which has closer to 3,000 IT services companies. The Chinese industry is more fragmented than other countries, with
competition in this industry being dominated by small firms with less than 50 employees. A key factor in the Chinese industry is that there are almost no IT services
inputs or imports from foreign economies, which highlights that most international service providers already have a presence in China.

Large players attempt to differentiate themselves through several initiatives to boost their competitive edge. Companies such as IBM offer variousservices and products
including hardware and software, which serves to ease rivalry as they are not solely reliant on the revenues generated from this industry. In addition, developments in
social networks, mobile, analytic, and cloud technologies allow players to offer more value-added services, increasing rivalry regarding intellectual property and the
need for perpetual innovation.

The markets in which the companies in this industry operate are subject to technological advances, developing industry standards, and changing customer needs and
preferences. The success of a company is dependent on its ability to anticipate and adapt to changes. Large companies often acquire smaller players to gain access to the
technology and intellectual property of smaller, more innovative firms. For instance, in October 2022, Capgemini completed the acquisition of Braincourt, a German
business intelligence and data science service specialist. The acquisition will boost Capgemini's analytics and data capabilities across the German and North European
markets.

Customers view a lot of IT services, including software development, system integration, and consulting, as undifferentiated. Competition frequently revolves around
price, quality, delivery speed, and customer service when there is little difference in the essential services provided. The absence of distinct product offerings exacerbates
competition, as companies endeavor to set themselves apart through alternative strategies such as creativity, sector knowledge, or client connections.

The globalized nature of the industry increases rivalry concerning cost reductions, which has driven the rapid expansion of exportservices in countries such as India,
where competitive contractual terms are key success factors. This has historically been linked to labor costs but may develop into storage costs as restrictions on data
flow mean that data centers will proliferate.

Security and secrecy are also key factors in terms of data storage, which is perhaps why traditional tax havens top the list of countries with the most secure internet
servers per million people – Liechtenstein, Bermuda, Monaco, Switzerland, Luxembourg, and the Isle of Man are all in the top 10. However, services offered by most
industry players are essentially similar and companies are highly reliant on revenues from the industry.

Companies operate in a highly competitive information technology industry, which is characterized by frequent changes and improvements in technology. Such intense
competition and technological advancements could affect its business and operating results. Competition could intensify with the entry of new entities, the development
of new technologies, products, and services, and convergence. Competition in these markets is determined by several factors such as technical skills and capabilities,
innovative services and product offerings, quality, client relationships, value and speed, availability of resources, price, reliability, and security. Some of its competitors
took several initiatives, which could increase competition in the industry.

The degree of rivalry between players in the global industry has been alleviated by the strong industry growth between 2018 and 2023, allowing multiple firms to
expand and take advantage of the growing demand for IT services. According to GlobalData, the global IT services industry grew at a CAGR of 8.2% during the historic
period. Rivalry is expected to be eased in the coming years as the industry experiences strong growth fueled by the accelerating digitalization of businesses and
enterprises.

Overall, the degree of rivalry is assessed as moderate.

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Macroeconomic Indicators, April 2024

Country data

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Table 10: Global size of population (million), 2019–23 MARKETLINE

Year Population (million) % Growth
2019 331.4 0.8%
2020 333.9 0.8%
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Table 11: Global gdp (constant 2005 prices, $ billion), 2019–23 MARKETLINE
Year Constant 2005 Prices, $ billion % Growth
2019 16,929.6 2.2%
2020 17,270.7 2.0%
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Table 12: Global gdp (current prices, $ billion), 2019–23 MARKETLINE

Year Current Prices, $ billion % Growth
2019 21,993.9 4.3%
2020 22,953.1 4.4%
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Table 13: Global inflation, 2019–23 MARKETLINE

Inflation Rate
Year
(%)
2019 2.2%
2020 2.4%
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Table 14: Global consumer price index (absolute), 2019–23 MARKETLINE

Consumer Price Index (2005 =
Year
100)
2019 135.1
2020 138.3
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Table 15: Global exchange rate, 2019–23 MARKETLINE
Exchange rate
Year
(€/$)
2019 1.1195
2020 1.1422
2021 1.1827
2022 1.0539
2023 1.0813

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Market Data, April 2024

Market Value

The global IT services industry grew by 9.5% in 2023 to reach a value of $1,612.2 billion.

The compound annual growth rate of the industry in the period 2018-23 was 8.2%.

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Table 1: Global IT services industry value: $ billion, 2018-23 MARKETLINE

Year $ billion € billion % Growth
2018 1,089.4 1,007.5
2019 1,150.8 1,064.3 5.6%
2020 1,230.5 1,138.0 6.9%
2021 1,357.4 1,255.4 10.3%
2022 1,472.7 1,362.0 8.5%
2023 1,612.2 1,491.0 9.5%
CAGR: 2018–23 8.2%

Figure 1: Global IT services industry value: $ billion, 2018-23 MARKETLINE

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Market Outlook, April 2024

Market Value Forecast

In 2028, the global IT services industry is forecast to have a value of $2,936.3 billion, an increase of 82.1% since 2023.

The compound annual growth rate of the industry in the period 2023-28 is predicted to be 12.7%.

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Table 5: Global IT services industry value forecast: $ billion, 2023–28 MARKETLINE

Year $ billion € billion % Growth
Year $ billion € billion % Growth
2023 1,612.2 1,491.0 9.5%

2024 1,803.6 1,668.0 11.9%

2025 2,028.9 1,876.4 12.5%
2026 2,295.1 2,122.6 13.1%
2027 2,606.3 2,410.4 13.6%
2028 2,936.3 2,715.6 12.7%
CAGR: 2023–28 12.7%

Figure 4: Global IT services industry value forecast: $ billion, 2023–28 MARKETLINE

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Market Overview, April 2024

Market definition

The IT services market involves the design, development, implementation, management, and support of information technology systems and applications for
organizations. Market values include revenues generated from (a) signed deals that remain under contract and (b) new contracts signed within that calendar year.

The market is segmented into BPO services, application services, and infrastructure services.

The BPO services segment includes customer relationship management (CRM), finance and accounting, human resources, knowledge process outsourcing, and
procurement and supply chain.

The application services segment covers application development, application management, and application performance monitoring.

The infrastructure services segment includes cloud computing, data center & hosting services, IT management, managed security services, and storage services.

All market data and forecasts are adjusted for inflation and all currency conversions used in the creation of this report have been calculated using yearly annual average
exchange rates.

For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific, Middle East, South Africa and Nigeria.

North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Chile, Colombia, and Peru.

Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia,
Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Scandinavia comprises Denmark, Finland, Norway, and Sweden.

Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea,
Taiwan, Thailand, and Vietnam.

Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.

Market analysis

The Global IT services industry experienced strong growth, during the historic period of 2018-23. The growth was fuelled by rapid digital transformation, across various
industries, resulting in growing demand for IT services. In 2023, the industry continued to witness a strong annual growth of 9.5%. Going forward, the industry growth
is forecasted to accelerate and grow at a strong rate, over the forecast period of 2023-28.

The global IT services industry is largely dominated by the North American region capturing a share of 34.9%, followed by the Asia-Pacific region capturing the second-
largest share of 31.7% in 2023. The European region also accounted for a significant portion of industry value with a 22.3% share in 2023. Amidst rapid technological
advancements and evolving business paradigms, the IT function is experiencing a profound transformation. Industry growth is being driven by growing digitalization
and technological adoption by businesses. The increased move towards technology transformation by businesses, including, cloud migration and modernization, modern
ERP and data, and artificial intelligence (AI) is pushing businesses to invest in IT services, to remain competitive, driving IT services industry growth.

The global IT services industry registered revenues of $1,612.2 billion in 2023, representing a compound annual growth rate (CAGR) of 8.2% between 2018 and 2023.
In comparison, the Asia-Pacific and North American industries grew with CAGRs of 9.3% and 7.3% respectively, over the same period, to reach $515.3 billion and
$562.3 billion in 2023.

The global IT services industry witnessed strong growth despite the weakening economy and rising inflation, and it is anticipated that this growth will continue in the
coming years. The continued growth resulted from the increased demand for improved operational resilience, as well as accelerated investments in digital transformation
and cloud adoption, in response to altered consumer behaviors. Furthermore, the growing shift towards outsourcing of IT services was another significant demand driver.
Companies are outsourcing more due to the need to free up personnel and financial resources, to carry out their growth and transformation initiatives; and the talent
shortage, results in the continued growth of the IT services. IT service providers are also investing in research & development, to assist clients with their ever-changing
business models, which are forecasted to drive innovation and demand growth in the coming years.

The infrastructure services segment accounted for the industry's largest proportion in 2023, with total revenues of $1,014.7 billion, equivalent to 62.9% of the industry's
overall value. The BPO services segment contributed revenues of $324.8 billion in 2023, equating to 20.1% of the industry's aggregate value.

Infrastructure services have experienced a significant demand growth, largely due to an increased effort from businesses to increase their digital presence, alongside the
prevalence of data collection. Additionally, remote, and online working have also increased the value of infrastructure services, resulting in the dominance of the
infrastructure services segment, in 2023. Furthermore, a growing shift towards robotics, immersive virtual reality, AI, and connected devices (IoT) will make the existing
infrastructure outdated, and force the companies to invest in updating their IT infrastructure, incorporating the latest technological advancements, which is projected to
ensure the continued growth of the infrastructure services segment, over the forecast period.

The performance of the industry is forecasted to accelerate, with an anticipated CAGR of 12.7% over 2023–28, which is expected to drive the industry to a value of
$2,936.3 billion by the end of 2028. Comparatively, the Asia-Pacific and North American industries will grow with CAGRs of 15.3% and 10.4% respectively, over the
same period, to reach $1,050.8 billion and $920.3 billion in 2028.

The industry growth is projected to accelerate further, over the forecast period, driven by the improving economic environment and reducing inflationary pressure across
several large economies, allowing businesses to increase their ICT budgets, to procure new IT services. For instance, according to GlobalData analysis based on
information from the Bureau of Labour Statistics, the US, and the World Bank (WB), the consumer price inflation rate in the US is estimated to go down to 2.9% in
2024, from 4.1% in 2023, whereas, the consumer price inflation rate in Germany is estimated to go down to 2.5% in 2024, from 6.0% in 2023, according to the
GlobalData analysis based on information from the Federal Statistical Office of Germany and the World Bank (WB). Furthermore, amidst geopolitical crises and supply
chain disruptions across several countries, the prevailing global economic environment is compelling businesses to embrace novel technological innovations, driving the
demand for IT services. Enterprises are searching for innovative digital ways to maintain a strong competitive position in the evolving market, which is projected to
drive the demand for IT services, in the coming years.

April 26, 2024 (12:56) | Publication: MarketLine Global Industry Reports

Global - IT Services - Market Segmentation, April 2024

Category Segmentation

Infrastructure services is the largest segment of the global IT services industry, accounting for 62.9% of the industry's total value.

The BPO Services segment accounts for a further 20.1% of the industry.

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Table 2: Global IT services industry category segmentation: % share, by value, 2018-2023 MARKETLINE
Category 2018 2019 2020 2021 2022 2023
Infrastructure Services 58.1% 59.0% 60.0% 61.2% 62.3% 62.9%
BPO Services 23.1% 22.7% 22.3% 21.8% 20.8% 20.1%
Application Services 18.8% 18.3% 17.7% 17.0% 16.8% 16.9%
Total 100% 100% 100% 100% 100% 100%
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Table 3: Global IT services industry category segmentation: $ billion, 2018-2023 MARKETLINE

Category 2018 2019 2020 2021 2022 2023 2018-23 CAGR(%)
Infrastructure Services 633.4 679.0 738.7 831.1 918.1 1,014.7 9.9
BPO Services 251.3 261.3 274.2 296.3 306.7 324.8 5.3
Application Services 204.7 210.5 217.5 230.1 248.0 272.7 5.9
Total 1,089.4 1,150.8 1,230.4 1,357.5 1,472.8 1,612.2 21.1

Figure 2: Global IT services industry category segmentation: $ billion, 2018-2023 MARKETLINE

Geography Segmentation

North America accounts for 34.9% of the global IT services industry value.

Asia-Pacific accounts for a further 32% of the global industry.

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Table 4: Global IT services industry geography segmentation: $ billion, 2023 MARKETLINE

Geography 2023 %
North America 562.3 34.9
Asia-Pacific 515.3 32.0
Europe 359.5 22.3
South America 64.5 4.0
Middle East 42.5 2.6
Rest of the
68.1 4.2
world
Total 1,612.2 100%

Figure 3: Global IT services industry geography segmentation: % share, by value, 2023 MARKETLINE

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