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Contracts Database

for IT Services

Track the pattern of service adoption by monitoring IT Services contract awards by your peers. Identify who are the successful vendors this industry now. Updated monthly!

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IT Services - Market Update

Market Reports

by Dominique Raviart

published on Oct 25, 2023

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Report Overview:

This report provides an update to NelsonHall’s assessment of the IT services market in the light of recent market developments.

Who is this Report for:

NelsonHall’s market update for IT Services is designed for:

  • Sourcing managers investigating sourcing developments within IT services
  • Vendor marketing, sales, and business managers developing strategies to target opportunities within IT services
  • Financial analysts and investors specializing in the IT services sector.

Scope of this Report:

This Market Update report updates NelsonHall's forecast of IT services spending, including:

  • A recap of the key points from our last spending forecast
  • A summary of current IT services spending patterns across the U.S. and U.K./Europe
  • How NelsonHall sees spending developing in 2024.

Key Findings & Highlights:

NelsonHall published its IT services forecast in August 2023, forecasting market growth by geography and service line for the next five years.

Spending on IT services is cyclical and heavily dependent on the macroeconomic environment (and business confidence). NelsonHall has used data from the International Monetary Fund (IMF) to assess such macroeconomic conditions, based on its World Economic Outlook, three times a year.

On October 10, the IMF refreshed its GDP growth predictions: these include better 2023 GDP growth in the U.S. (+2.1%) and Japan (+20%) than the U.K. (+0.5%) and the Eurozone (+0.7%).

However, the IMF’s predictions are not in line with our observations of IT services spending. In Q2 2023, IT services spending growth fell sharply in the U.S. (to low single-digit), while the U.K. and Europe remained solid. Recent quarterly earnings from Accenture, TCS, Infosys, and HCLTech confirm this trend.

This document looks at this unusual disconnect between GDP growth and IT service spending. It also predicts how IT services spending will evolve in 2024.

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