United states IT Service Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

United states IT Service Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The United States IT Services Market size is estimated at USD 217.23 billion in 2023, and is expected to reach USD 306.10 billion by 2028, growing at a CAGR of 7.10% during the forecast period (2023-2028).

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.

USA IT Service Market Trends

Acceleration of Digital Transformation Across Industries and Adoption of New Technologies

• Digital transformation in numerous end-user sectors has transformed the company's approach to its customers' digitalization levels. As digital usage and efforts have grown in importance, so have IT services.
• Digital transformation gives businesses a strategic and competitive advantage in assessing the relevance of IT services, organizing IT services as an activity within the plan-build-run framework, and defining an IT service strategy for the organization. Furthermore, as the IT business undergoes a digital transformation, there are numerous chances to improve the customer experience, and advising clients on using analytics is now an integral aspect of modern consulting. To remain ahead of the disruption, IT consultants are learning new skills.
• The environment for IT services is rapidly changing. Enterprises in various end-user verticals need help balancing IT infrastructure and cost control. Future technology plans center around adopting emerging technologies, which are expected to grow as businesses attempt to replace old infrastructure.
• AI, IoT, blockchain, and other technologies are revolutionizing the customer experience in the country's fintech industry, enabling a preference for IT services in the aftermath of rising P2P transfers and payments and using contactless bank cards and cryptocurrency management through digital channels.
• The spread of new technologies, such as big data and machine learning, increases the demand for updated IT infrastructure. Furthermore, the necessity to update old gear is fueling market development.

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

• In recent years, advanced and developing technologies have changed healthcare in the United States. Medical offices and hospitals have adopted new technologies to adapt to a shifting regulatory environment and raise the standard of patient care. Medical facilities throughout the country have high-tech operations that place technological advances in the hands of skilled specialists.
• IT services in the healthcare industry enable the development of insight-driven solutions for efficient and digitally accessible healthcare suitable for individual companies, small and large multiservice organizations, and franchisees. These services also assist healthcare customers in streamlining integrated care delivery for improved clinical, financial, and operational outcomes.
• Furthermore, as healthcare companies change their focus toward digitizing healthcare practices for improved care, the implementation of IT services in the healthcare industry is rapidly increasing across the United States. As a result, many regional IT service providers are launching healthcare IT services.
• Moreover, digital transformation in healthcare in the United States entails integrating digital services or processes across the enterprise, whether a payer, provider, or entity. Digitally changed healthcare may provide individualized and multichannel experiences to patients by merging digital technologies and processes. Advances in electronic medical records or other projects aiming for medical interoperability reflect the current trend in healthcare in the United States toward digital transformation. These innovations are increasing the use of IT services in the United States.
• Collaboration and merger efforts, as well as increasing investment to digitize the United Health sector and introducing innovative IT services by the highest IT service providers, point to a bright future for IT services in the healthcare segment over the projected period.

USA IT Service Industry Overview

The competition rate in the US IT services market is strong and is projected to stay so over the forecasted period. Companies use solid competitive strategies to stay in the market and keep their customers. This aspect heightens the market's competitiveness.

In April 2022, Wipro acquired Convergence Acceleration Solutions (CAS Group), a consulting and program management organization based in the United States specializing in business and technology transformation for big communications service providers. The combined company provides clients services from strategy creation and planning to execution and implementation.

In March 2022, Intel Corporation, a manufacturer of semiconductor chips across the world, joined the Leidos Alliance Partner Network. Due to LAPN, Leidos can expand its services and broaden next-generation customer innovations. LAPN fosters innovation through a vast network of leading technology companies and leverages its supplier base to handle client concerns. The firm can work together to get the newest items and speed up the implementation of critical new technologies with the support of this strong collaboration.

In January 2022, Iconic IT and Integris combined to form one of the biggest managed service providers for small and medium-sized businesses. The 170 workers of Iconic IT and the 270 employees of Integris are combined due to the merger.

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• The market estimate (ME) sheet in Excel format
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