United States IT Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

United States IT Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The US IT Services market was valued at USD 193,52 billion in 2021 and is expected to grow at a CAGR of 7.10% during the forecast period 2022-2027. The market estimates are recorded based on the revenue generated based on the accrued services by different players in the market analyzed on nominal terms.

Key Highlights

• Rapidly increasing digital transformation across industries, adoption of new technologies such as artificial intelligence, IoT, and blockchain, and a growing emphasis on leveraging the core competencies by outsourcing non-core operations are the major driving factors of the market. With digital transformation, organizations have become dependent on the success of creative applications and extensions that IT could provide. IT has become a critical competitive edge for most organizations. Moreover, IT outsourcing has become more than a simple cost reduction technique with cloud migrations and service options. Therefore, this new form is driven by organizational motivations regarding business growth, customer experience, and competitive disruption.
• The government of the United States passed the 21st Century Integrated Digital Experience Act (21st Century IDEA) in December 2018. This Act has established a regulatory framework for all federal agencies to improve and streamline digital service delivery. The government has also implemented various IT initiatives such as IT modernization, Digital Strategy, and investments in Emerging technologies.
• Additionally, in 2022, the President’s Federal government IT budget allocation was more than USD 58 million. This budget enables the government to act according to the 21st Century IDEA and allows the U.S. to General Services Administration and the Federal offices to make initiatives in the IT Services landscape.
• Customization and data migration are the restraints for the United states IT services market. However, the security of data has been another restraint for the companies in the United States from implementing IT Services across various domains. According to PurpleSecLLC, a cyber security company in the United States, in 2021, enterprises in the region on average experienced nearly 130 security breaches per year, and the annual number of security breaches in enterprise organizations has increased by 27.4%, with over 50% of the cyber-attacks targeted at SMB’s. However, companies are investing significant resources in cybersecurity solutions for the enhanced safety of data. Hence, the impact of the restrain would be effective in the short term.
• The outbreak of COVID-19 prompted organizations across the region to undertake all the necessary steps to ensure the safety of their employees and the community. COVID-19 pandemic had a beneficial impact on the market, owing to the rise in remote working and the expanding digital transformation of enterprises. Businesses are looking for business processes that are seamless, efficient, and accessible from any location. Further, many businesses completed their digital transformation, and many have decided to remain fully remote or operate on a digital and in-office hybrid model. With the growing remote working model, companies are increasing investments in the shift to cloud, and AI-powered technologies, which is expected to boost the IT Services market.

Key Market TrendsAcceleration of Digital Transformation Across Industries and Adoption of New Technologies

• Digital transformation in various end-user industries has reshaped the company’s approach to its customer’s digitalization levels. As digital adoption and initiatives have increased, high-performing IT Infrastructure has become more important, leading to an increase in demand for IT Services.
• Digital transformation provides companies with a strategic and competitive advantage in determining IT Services and their importance, and further organizes the IT Services as an activity of plan-build-run framework and defines IT Service strategy to the organization. Further, as a digital revolution is underway in the IT industry, there are tremendous opportunities to enhance the client experience, and advising clients on leveraging analytics is now an essential part of modern consulting. IT Consultants are acquiring new skill sets to stay ahead of the disruption.
• The landscape of IT Services is changing rapidly. Enterprises across various end-user verticals struggle to balance their IT infrastructure and cost management. The future technology adoption plans hover around the adoption of emerging technologies that are expected to grow exponentially as businesses look to replace outdated infrastructure.
• AI, IoT, blockchain, and others, are transforming the customer experience across the fintech sector in the country, enabling the preference for IT Services in the wake of increased P2P transfers and payments and the use of contactless bank cards and cryptocurrency management via digital channels.
• The proliferation of advanced technologies, like big data and machine learning, fuels the need for updated IT infrastructure. Moreover, the need to replace outdated hardware is another factor driving the market’s growth.

Healthcare Sector is Expected to Register the Fastest Growth During the Forecast Period

• Advanced and emerging technologies have transformed healthcare in recent years in the United States. Hospitals and physician offices have implemented new technologies to respond to a changing regulatory environment and improve patient care quality. Medical facilities in the country now have high-tech operations that put cutting-edge technologies into the hands of talented professionals.
• IT services in the healthcare sector enable the implementation of insights-driven solutions for efficient and digitally-accessible healthcare that suit individual organizations to small or big multiservice organizations and franchises. Additionally, these services help healthcare customers streamline the delivery of integrated care for better clinical, financial and operational outcomes.
• Moreover, the implementation of IT services in the healthcare sector is rapidly rising across the United States, as healthcare organizations are shifting their focus toward digitizing healthcare practice for improved care. Therefore, various IT service providers are introducing healthcare IT services in the region.
• Furthermore, in the United States, digital transformation in healthcare involves the integration of digital functions or processes across the enterprise – be it a payer, a provider, or another organization. By combining digital systems and processes, digitally transformed healthcare can offer its patients individualized and omnichannel experiences. Advancements in electronic medical records or other initiatives striving for medical interoperability reflect the recent shift toward the digital transformation of healthcare in the United States. Such developments are boosting the adoption of IT services in the United States.
• The collaboration and merger activities, along with growing investment to digitize the United Health sector and the advent of innovative IT services by leading IT service providers, offer a promising future for IT services in the healthcare segment over the forecast period.

Competitive Landscape

In the United States IT Services Market, the degree of competition is high and expected to remain the same throughout the forecasted period. In order to sustain in the market and retain their clients, the companies are employing powerful competitive strategies. This factor intensifies the competitive rivalry in the market.

• April 2022 - Convergence Acceleration Solutions (CAS Group), a consultancy and program management firm located in the United States that specializes in business and technological transformation for large communications service providers, has been acquired by Wipro. The joint business will provide clients services spanning from strategy formulation and planning through execution and implementation.
• March 2022 - Intel Corporation, a prominent producer of semiconductor chips worldwide, joined the Leidos Alliance Partner Network. Leidos is able to increase its services and widen next-generation customer innovations due to LAPN, which promotes innovation through a huge network of the world's prominent technology businesses and uses its supplier base to address client issues. With the help of this solid alliance, the business will be able to work together to secure the latest goods and accelerate the adoption of essential new technology.
• January 2022 - Iconic IT and Integris have combined to form one of the biggest managed service providers for the small- and medium-sized business market. The 170 workers of Iconic IT and the 270 employees of Integris are combined as a result of the merger.

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• The market estimate (ME) sheet in Excel format
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