IT Service Management (ITSM) Market Size, Share, Growth, and Industry Analysis, By Type (On-premises, and Cloud-based), By Application (BFSI, Retail & E-Commerce, IT & Telecom, Government & Public Sector), and by Regional Insights and Forecast to 2032

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IT SERVICE MANAGEMENT (ITSM) MARKET OVERVIEW

The global IT Service Management (ITSM) Market size was valued at approximately USD 12.5 billion in 2024 and is expected to reach USD 36.6 billion by 2032, growing at a compound annual growth rate (CAGR) of about 12.8% from 2024 to 2032

Services are defined as means to deliver services to the customer and provide valuable outcomes. ITSM is known as sub-discipline services science which helps in delivery and support of IT services for customers. As a mixture of operations, research, and business administration ITSM provides quality services to the customers. And customers require and expect robust services. A fundamental aspect of ITSM is to focus on processes and the continuous improvement of those processes moreover, a recent Gartner study found that approximately 80% of IT service failures are the result of process failures (70%) or the lack of employee skill and competence (10%). Only 20% of IT service failures are the result of technology failures, so there are such poor-performing technologies in the market. Companies require the delivery of services that support users in conducting activities that support the company. Companies have to understand the user and provider of the services and have service-level expectations. Businesses around the world are adopting IT services as stated at Microsoft’s 2004 IT Forum Conference, Recent studies are showing that an IT service organization could achieve up to a 48% reduction by applying ITSM principles. In the present time, ITSM's key issue is which IT management services that are hardware or software installation, network, systems, application management business service support plan, and management services that contribute to the business growth. ITSM concentrates on the support and delivery of IT operations. Because most of the cost of infrastructure is in these two areas.

This industry is growing rapidly, focusing on the delivery and management of IT services, key drivers of this market are the growing adoption of digital initiatives, rising demand for remote work solutions increasing reliance on IT services across various industries such as BFSI, retail, and telecommunication. With IT services becoming important for new businesses, ITSM tools are important to enhance productivity and minimize downtime, which in return will improve customer satisfaction. This market is characterized by the adoption of advanced technologies, AI, and cloud computing which are transforming ITSM solutions.

COVID-19 IMPACT

"Remote work opportunities have accelerated the ITSM market"

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The COVID-19 Pandemic has caused many disruptions all over the world across various industries forcing some businesses to rapidly shutdown or transition to remote work this sudden shift has increased the demand for ITSM because mainly everything was operated from home work set-up due to social distancing protocols. Such way companies had to find a way to solve these problems with no contact system to ensure and smooth working of software that needed IT support. So in turn IT support has managed to give smooth working of operations in-home set up. Due to this the demand for ITSM increased and created a surge in the market which has created a surge for ITSM platforms for monitoring and managing remote IT operations to this ITSM responded by providing remote-friendly features and work automation where needed with minimal human interaction, and tools for collaboration as a result the market has seen a robust growth during the pandemic which has increased the demand and also accelerated the market growth.

LATEST TREND

"Involvement of AI and automation to improve productivity "

The collaboration of AI and Automation in the IT service management industry has become an integral part of the business. Nowadays businesses are facing increased complexity of IT operations and increased demand for faster ticket resolutions. Companies are adopting AI and automation in IT service management for faster resolutions. All these AI-driven ITSM tools are designed in such a way that they help users resolve the solutions with greater efficiency. All these advanced tools automate routine tasks. Such as incident management, ticketing, and predictive analytics, significantly reducing the response time By less manual interventions, AI not only improves operational activities but also increases the overall user experience, ensuring quicker solutions. Furthermore, companies that use AI and machine learning in their ITSM systems gain an advantage by adapting more effectively to dynamic business environments. This shift positions companies to manage IT infrastructure with greater precision and increase scalability in a rapidly evolving digital landscape.

IT SERVICE MANAGEMENT (ITSM) MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into On-premises and Cloud-based

• On-premises - Organizations deploy on-premises ITSM tools by managing them within their internal environment. This is common in organizations such as Independent Security Audit organizations that demand more stringent controls and measures on data security and privacy. Mandatory health checks for due diligence on data and infrastructure are much easier however these solutions tend to be higher in cost because of maintenance and upgrades.

• Cloud-based - Due to their flexibility and cost-effectiveness, cloud-based ITSM solutions have the largest share in the market. With these platforms, organizations can execute management IT services on-site without the construction of major capital expenses. Such cloud solutions are most suitable for resource-constrained SMEs and resource-optimizing companies. This rise can be attributed to an increased dependence on hybrid and multi-cloud environments.

By Application

Based on application, the global market can be categorized into BFSI, Retail & E-Commerce, IT & Telecom, Government & Public Sector

• BFSI - ITSM has also been seen as a critical enabler for service continuity and prevention of service outages in critical processes in the BFSI sector, who are keen on using ITSM solutions for organizational needs. ITSM aids in compliance, operational efficiency improvement, and customer experience, thus it can be said to be a must-have in this industry.

• Retail & E-Commerce - Retail & E-Commerce The use of IT service management includes dealing with IT-related issues, managing the point of sale as well as ensuring sustained availability of their website in the Retail and E-commerce organizations. Since making sales has been observed to be very much dependent on how customers view the business, ITSM helps in making the entire IT landscape functional.

• IT & Telecom - IT & Telecom To run operations that include managing a complex structure, overseeing networks, and providing services to users, ITSM tools are used in this industry the IT and telecom sectors. The accelerated changes in the industry and cloud advancements and automation technologies have aided the ITSM to increase.

• Government & Public Sector - Government & Public Sector ITSM tools are also used by governments and publicsector bodies to sustain transparency, increase efficiency in managing public services, and increase citizen interaction. Some of the challenges that such solutions try to address include resource management, IT infrastructure security, and managing incidents.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities, and challenges stating the market conditions.

Driving Factors

"Digital Transformation Across Industries"

The global shift towards digital transformation is one of the main reasons why the ITSM market is growing. Companies that belong to various sectors are using the digital plan to help them do their work more easily, save money, and improve customer experiences. These changes are very important, as they support the ITSM platforms as tools that can help IT systems and processes be carried out easily. This integration will help organizations work better, keep services running smoothly, and achieve their transformation goals. With the growing number of digital transformation projects, the demand for ITSM solutions is likely to increase which will result in IT service market growth.

"More People Turn to Cloud-Based Solutions"

Another big reason behind the IT service market growth is moving from traditional IT systems to cloud-based setups. There are many benefits of cloud-based ITSM solutions, which are easy to grow and cost-effective, saving much money and more accessible to businesses, no matter how small or big. These platforms allow organizations to expand their IT capabilities while still maintaining flexibility and keeping expenses low, making them ideal in fast-changing and highly competitive markets. This has significantly contributed to the growth of the ITSM market as more companies are embracing cloud-based ITSM solutions to be quick and competitive.

Restraining Factor

"High Implementation Costs"

Though it has some advantages, it is quite challenging for small and medium-sized enterprises to employ ITSM platforms mainly due to high setup costs. For example, most on-premises ITSM solutions have costly requirements, such as infrastructure, software licenses, and initial installation. In addition, high maintenance costs and training of particular personnel to operate the systems are factors that increase operation costs, and this could hinder some organizations from implementing such systems.

Opportunity

"Increased Adoption of AI and Automation"

In ITSM The increasing adoption of AI and automation in ITSM platforms gives overall support to IT service market share. New features like predictive analytics, self-healing systems, and AI chatbots make IT operations easier as well as improve efficiency and decrease costs. These new tools allow businesses to give better service while using less human effort, making ITSM solutions more attractive. As companies focus on using automation to keep up with changing business needs, using AI-powered IT service management tools is likely to greatly increase the share of the ITSM market and help the industry grow.

Challenge

"Worries about data safety in cloud settings"

The rising reliance on cloud-based ITSM solutions has brought data security to the forefront as a key challenge for market players. Organizations must address concerns related to privacy breaches, unauthorized access, and compliance with data protection regulations to ensure the safety of sensitive information. The complexity of safeguarding cloud environments while adhering to global and regional security standards poses significant challenges for both ITSM vendors and users. These concerns can slow the adoption of cloud-based solutions, thus negatively impacting the ITSM market growth in regions prioritizing regulatory compliance and data integrity.

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IT SERVICE MANAGEMENT (ITSM) MARKET REGIONAL INSIGHTS

• North America

North America leads the ITSM market driven by the presence of various industry top players. ITSM service providers and the adoption of digitalization have increased the market opportunities in the United States IT service management market has the largest market share due to the increased adoption of various ITSM tools by major players and the adoption of various IT infrastructures across industries such as BFSI, telecom, and healthcare.

• Europe

Europe's ITSM market is integrated by increased adoption of automation and AI in IT services many countries have started adopting countries like Germany and France are key contributors, with companies investing heavily in IT service optimization. This will increase the productivity in the company which will result in more efficient work manner.

• Asia-Pacific

The Asia-Pacific region is also seeing tremendous growth in the ITSM market due to increasing digital exploration and the expansion of small and medium enterprises in countries like India, China, and Japan. The rise of cloud computing and government initiatives promoting digital transformation are key factors driving the market in this region.

KEY INDUSTRY PLAYERS

"Key Industry Players Shaping the Market Through Innovation and Market Expansion"

The leading companies in the IT Service Management (ITSM) market are making strategic moves to retain and grow their share in the market. Most are embracing AI and automation to optimize repetitive processes, ensure greater efficiency in service provisioning, and remain relevant in an ever-increasing dynamic environment. Due to the strong need for remote access and extendibility, the focus on cloud-based solutions has been explosive, with companies expanding their portfolios to target all market segments. Understanding the pressing need for security, major players in the industry are putting a lot of effort into developing robust security features to ease cloud-related worries and comply with legal requirements. Moreover, innovation around the customer experience remains crucial, including new developments to make user-friendly designs, faster and more efficient self-service features, and overall improved user experience, which strengthens the companies’ competitive advantage.

List of IT Service Management (ITSM) Companies

• IBM (United States)
• HPE (United States)
• Citrix Systems (United States)
• BMC Software (United States)
• CA Technologies (United States)
• Atlassian (Australia)
• Axios Systems (United Kingdom)
• Ivanti (United States)
• Cherwell Software (United States)
• Hornbill (United Kingdom)
• Freshworks (India)
• SysAid (Israel)
• Gartner (United States)
• Micro Focus (United Kingdom)
• EasyVista (France)
• Alemba (United Kingdom)
• ManageEngine (India)
• LogMeIn (United States)
• Efecte Plc (Finland)
• Microsoft (United States)

KEY INDUSTRY DEVELOPMENT

September 2023: Fresh Works (India) launched their Fresh service Neo, it is a next-generation ITSM service platform. This new platform uses AI to help IT teams automate workflows, adapt easily resolve issues faster, and improve overall service management efficiency.

REPORT COVERAGE

This report comprises a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.