IT Services

IT Services Sector Revenue Set to Rise

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The Freedonia group released research this week that predicts a positive outlook for the US technology services sector.

Revenues for the IT services industry are forecast to rise 5.9% annually through to 2020. An even faster rate of growth is predicted for the leading infrastructure provisioning and management (IP&M) segment. This is driven by a growing demand for hosting services as companies continue to move their processes to the cloud.

IP&M providers benefit from economies of scale. For example, cloud and virtualization technologies enable them to share capital resources among pools of customers, ensuring a high utilization rate of available infrastructure, thus reducing competition. As a result, they are able to achieve a higher return on investment in hardware resources than t their customers can realize on their own. Their scale also affords them superior bargaining power with hardware vendors and other service providers. Despite these advantages, industries that handle sensitive customer data – such as banks, hospitals, and insurance providers – have been slow to adopt these systems due to understandable liability concerns.

These and other key insights are featured in IT Services: United States, a report recently released by Freedonia Focus Reports, a division of The Freedonia Group.

The report forecasts US IT service revenues in US dollars to 2020. Total revenue is segmented by service type in terms of:

  • infrastructure provisioning and management
  • custom applications
  • infrastructure design and development
  • technical consulting
  • technical support

US IT service revenues include income from all domestic locations primarily engaged in providing IT services.

To illustrate historical trends, total revenues and the various segments are provided in annual series from 2005 to 2015.

For more information, download the full report from the Freedonia Group website.

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Kirstie Magowan

Kirstie Magowan is the managing editor of IT Chronicles. Kirstie is an experienced journalist and publisher who has been working in the IT Service Management industry since 1999. Kirstie is a regular speaker at industry conferences globally.