IT Service Management (ITSM) Market

The global IT Service Management (ITSM) Market size was USD 10.5 billion in 2023 and is projected to grow to USD 22.1 billion by 2028, with a CAGR of 15.9% during the forecast period. The impact of the recession (before, during, and after the recession) on the market is covered throughout the report. Cloud solutions' quick and easy deployment drives the demand for cloud ITSM solutions. Since all the necessary IT components run on the cloud service provider's site, end users have direct access to the software over the web anytime, anywhere. Cloud ITSM works on the OPEX (operational expenditure) model, which reduces the total cost of ownership, making it affordable for players of all sizes.

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Recession Impact on the Global IT Service Management Market

During the recession, the IT Service Management (ITSM) market underwent notable transformations driven by shifts in organizational priorities and constrained budgets. One significant impact is the increased scrutiny of costs, prompting organizations to prioritize ITSM solutions that offer efficiency improvements, cost optimization, and streamlined operations. The market is witnessing a surge in demand for ITSM tools emphasizing automation, enabling organizations to do more with fewer resources. Additionally, there is likely to be a heightened focus on essential IT functions, with a preference for solutions that support critical services and contribute to overall operational resilience. Cloud-based ITSM solutions experience increased adoption as organizations seek the flexibility and scalability of cloud platforms while minimizing upfront infrastructure costs. The recession also prompted a reevaluation of procurement strategies, with organizations favoring shorter-term commitments and adaptable licensing models. Vendors offering innovative solutions aligned with these recession-driven priorities are poised to stand out in the evolving ITSM market landscape.

ITSM Market Dynamics

Drivers: Automated management of IT processes and policies

Due to globalization, increased competition, and the demand for customized products, allocating resources to core business functions has become critical for any organization. Any disruption in the normal functioning of an IT department can cause ripples throughout the business, and organizations are left with no choice but to expend their resources to correct the malfunctioning aspect of the infrastructure.

Service management can help to automate processes such as system restoration and network fault management, thereby reducing the overheads of system administrators and correcting issues in real-time. Although an initial human intervention is required to establish the necessary guidelines and policies, the automation of such processes can streamline operations and minimize disruptions.

Restraints:Lack of technical knowledge and expertise

When it comes to utilizing cloud computing platforms, organizations must have a team of experts and staff with the technical skills and knowledge to implement, process, analyze, and secure cloud solutions. However, the lack of technical expertise in this area is a significant hurdle for many organizations, causing them to miss out on the benefits of cloud computing. This shortage of skilled workers is particularly prevalent in cloud computing, and it can result in lost market share and revenue. Companies face several challenges when hiring talented cloud workers, including high wages and difficulty finding candidates that align with their organizational culture. Without sufficient skilled workers, an organization's growth can be hampered. Nevertheless, despite these challenges, many IT leaders are determined to expand their use of modern software engineering and cloud environments, with over 90% planning to achieve this objective.

Opportunities: Increasing government initiatives for necessary technology usage

In today's digital age, organizations are increasingly turning to cloud computing to store their data, as it provides a flexible and affordable solution that can be accessed on demand. As a result, governments are also investing in cloud-based delivery models to improve their efficiency and streamline their technology operations, particularly concerning citizen-facing transactions. By leveraging cloud technology, governments can reduce the cost of acquiring, setting up, operating, and maintaining technical services. They can also quickly adapt to changing user needs and expand public services. For example, during peak demand periods, such as the deadline for filing online tax returns, cloud computing can handle spikes in demand without service interruptions. According to the Government Technology Industry Navigator, funding opportunities for cloud computing services accounted for approximately 18.5% of all government tech funding opportunities. By adopting cloud computing, government technology professionals can stay up to date with the latest hardware and software rather than focusing on maintaining outdated technology platforms. This, in turn, facilitates human resource development pathways in the public sector and future-proofs government infrastructure. 

Challenges: Cybersecurity concerns arising out of breaches

The increasing frequency of high-profile security breaches has made corporations more obsessed with data protection than ever. According to a survey conducted by INAP in 2019, cybersecurity is a priority for over 36% of companies. In over 52% of cases, development teams work on so many critical patches and updates that it consumes too much time. The complex dependencies and integrations can also create weak spots in the interface operating in these temperature ranges. These complications in managing the heat levels inside ITSMs may hinder the growth of the global IT service management market.

ITSM Market Ecosystem

Based on solutions, Operations & Performance Management will hold the largest market share in the ITSM market during the forecast period.

The IT Operations Management (ITOM) solution covers a broad category of solutions, such as data center management, application management, network performance management, and application performance management. The Operations & Performance management solution caters to day-to-day maintenance and management of organizational IT infrastructures and services. These solutions assist end users to improve performance and gain a holistic view of their IT environment and business services. This solution ensures the smooth delivery of IT services and compliance with the predefined parameters. The benefits of insights into the value that each business function delivers and accessible communications with customers and other stakeholders drive the demand for Operations and performance management. Organizations across verticals use these ITSM solutions to enhance visibility, prevent service outages, and achieve maximized operational agility.

Based on Services, managed services hold a higher CAGR in the IT service management market during the forecast period.

Managed services are considered vital as they are directly related to customer experience. No company can afford to compromise the customer experience if they wish to remain at the forefront of the competitive arena. It is now more challenging for businesses to support numerous other functions while emphasizing essential business processes. As a result, managed services have seen rapid expansion in the market. These services provide the technical know-how needed to update and maintain every piece of software in the ITSM ecosystem. Managed services handle all customer inquiries and demands before and after deployment. Managed services offer end customers software tailored to meet their needs, including support throughout the entire software usage process.  

North America holds the largest market share in the ITSM market during the forecast period.

Given that businesses are increasingly adopting digital business strategies and moving toward cloud-based solutions and services, North America is predicted to have the most significant market size among all regions in the ITSM industry. It is anticipated that this tendency will hold throughout the projection period. Because there are so many companies in North America that provide ITSM solutions, the industry is developed. Businesses are allocating more significant funds to support ITSM solutions, which is assisting in expanding the ITSM industry in North America. That contributes to the ITSM market. As a major economy, the US' significant market share is due to the country's technological advancements, the inclination toward innovation, and the adoption of new technologies. Organizations have invested substantially in advanced technologies to gain a competitive advantage and increase business productivity. The ITSM market is expected to grow steadily as enterprises adopt cloud-based solutions and services at various levels to sustain themselves and achieve improved business functioning. Some of the top vendors present in the market are ServiceNow, BMC Software, and Ivanti, among others.

Key market players

The ITSM market is dominated both by established companies as well as startups such as ServiceNow (US), BMC Software (US), Broadcom (US), Ivanti (US), ManageEngine (India), SolarWinds (US), GoTo (US), Atlassian (Australia), OpenText (Canada), and Zendesk (US). These vendors have a large customer base, a strong geographic footprint, and organized distribution channels. They incorporate organic and inorganic growth strategies, including product launches, deals, and business expansions, boosting revenue generation.

The study includes an in-depth competitive analysis of these key players in the IT service management market with their company profiles, recent developments, and key market strategies. 

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Scope of the Report

This research report categorizes the ITSM market to forecast revenue and analyze trends in each of the following submarkets:

Based on Offering:

• Solutions
  • Service portfolio management
  • Configuration and change management
  • Service Desk Software
  • Operations and performance management
  • Dashboard, reporting, and analytics
• Services
  • Professional services
  • Managed services

Based on Deployment model:

• Cloud
• On-premises

Based on Organization Size:

• SMEs
• Large Enterprises

Based on Vertical:

• BFSI
• Telecommunications
• IT & ITeS
• Government & Public sector
• Energy & Utilities
• Manufacturing
• Retail & Consumer goods
• Media & Entertainment
• Healthcare
• Education
• Other Verticals

Based on Region:

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Netherlands
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • Australia
  • Singapore
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC Countries
    • Saudi Arabia
    • UAE
    • Rest of GCC Countries
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments

• In November 2023, Broadcom acquired VMware. With this milestone acquisition in a deal size of USD 61 billion, VMware joins Broadcom's engineering-first, innovation-centric team, which is another crucial step forward in building one of the world's leading infrastructure technology companies. Broadcom's focus moving forward is to enable enterprise customers to create and modernize their private and hybrid cloud environments. Fundamentally, Broadcom will invest in VMware Cloud Foundation, the software stack that serves as the foundation of private and hybrid clouds. VMware Cloud Foundation fits Broadcom's vision of helping customers convert the typically heterogeneous enterprise IT infrastructure into a virtualized and containerized environment, enabling private and hybrid clouds.
• In October 2023, ServiceNow partnered with ANSR. With this deal, ANSR will establish ServiceNow Centers of Excellence in more than 60 Global Capability Centers (GCCs) to train 3,500 people across India on the ServiceNow platform. ANSR aims to power its internal GCC service delivery on ServiceNow, including Now Assist generative AI (GenAI) capabilities.
• In November 2022, BMC Software acquired Remedy. Combining Remedy's industry-leading service management and problem resolution capabilities with BMC Software's performance and availability management solutions will provide customers with robust, integrated service management solutions as the business(es) deliver outcomes.
• In March 2021, Ivanti acquired Cherwell. The deal will leverage the Ivanti Neurons hyper-automation platform to provide end-to-end service from IT across business lines and from every endpoint to the IoT edge, resulting in personalized, contextual employee experiences and outcomes.

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