Global IT and business services revenue is expected to grow by 3.4 percent in 2021, according to IDC beancounters.
The outfit claims that the market will grow by six percent year on year, due to foreign exchange fluctuation, the analyst added.
IDC claims the services market is forecast to top $1.1 trillion in 2021, adding this is consistent with what major vendors have been reporting in the first and second quarters of this year.
IDC Global Services Markets and Trends research director, Xiao-Fei Zhang said that the need for digital transformation and the demographic squeeze on talent, expedited by the pandemic, global supply chain disruptions, and loose monetary policies, have created the perfect push and pull for enterprise buyers.
“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”, he said.
The research firm further claims the market will continue to expand through 2023 and 2024 with growth between 3.8 percent to four percent 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 programmes and schemes are taking place (Europe, APAC).
IDC figures show the US services market is forecast to grow by 2.4 percent 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 percent this year and 3.7 percent in 2022.
Europe’s recovery this year will fuel global recovery for the IT services market, accounting for around 30 percent 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.
