ITSM Market Size, Share & Industry Analysis, By Deployment (On-premises and Cloud), By Enterprise Type (Large Enterprises and SMEs), By Application (Configuration & Change Management, Operations & Performance Management, Incident Management, Problem Management, and Others), By Industry (BFSI, IT & Telecommunication, Government & Public Sector, Retail & Consumer Goods, Healthcare, Manufacturing, Media & Entertainment, and Others), and Regional Forecast, 2024-2032

The global ITSM market size was valued at USD 10.57 billion in 2023. The market is projected to grow from USD 12.00 billion in 2024 to USD 37.75 billion by 2032, exhibiting a CAGR of 15.4%. North America dominated the global market with a share of 38.69% in 2023.

IT Service Management (ITSM) refers to organizations' activities, processes, and strategies to design, deliver, manage, and improve IT services they provide to their customers or end-users. This service focuses on aligning IT services with the needs of the business and ensuring that IT infrastructure and services support the organization’s goals and objectives. ITSM frameworks, such as ITIL (Information Technology Infrastructure Library), provide best practices and guidelines for implementing IT service management processes and achieving service excellence. These services aim to ensure that IT services are delivered effectively, efficiently, and in line with business needs, ultimately improving customer satisfaction and organizational success. Thus, the increasing adoption of digital transformation initiatives by organizations across industries plays a vital role in driving market growth.

The COVID-19 pandemic positively impacted the market, as remote work became the norm during the pandemic. The surged demand for IT service solutions that enable remote support, collaboration, and service delivery. Organizations had to quickly adapt their IT service management processes to support remote teams and ensure business continuity. As businesses continue to navigate the evolving landscape, IT service management solutions will enable agility, resilience, and efficiency in the post-pandemic world.

In the scope of work, we have included solutions offered by companies such as ServiceNow, Freshworks Inc., Flexera Software, Inc., Open Text Corporation, Ivanti, IBM Corporation, Atlassian Pty Ltd., and others.

Impact of Generative AI

Growing Demand for Predictive Analytics for Incident Management to Boost Market Growth

Generative AI can automate the process of ticket creation and resolution by analyzing historical data and generating responses to common IT issues. This can help reduce the workload on IT service desks and improve end-user response times. Moreover, gen AI models can analyze large volumes of IT data to identify patterns and trends that may indicate potential incidents or service disruptions. By predicting these issues before they occur, IT teams can proactively address them and minimize their impact on operations. In addition, gen AI can assist in creating and updating knowledge-based articles by generating relevant content based on existing information and user queries. Generative AI helps ensure that knowledge bases are comprehensive, up-to-date, and easily accessible to IT staff and end-users. For instance,

• In December 2023, Atlassian integrated novel generative AI capability, which is available across its Jira software services for managing IT and DevOps workflows. The team of Domino’s Pizza uses Atlassian Intelligence to boost its productivity.

ITSM Market Trends

Increasing Focus on Enhancing Self-Service Capabilities Fuels the Adoption of ITSM Solutions in Organizations

Growing emphasis on self-service capabilities within IT service solutions empowers the users to resolve issues independently and reduce the burden on IT support teams. Additionally, organizations prioritize user-centric design and intuitive interfaces to enhance the overall user experience. Self-service automation is considered a boon for IT businesses. For instance,

• In 2020, industry experts predicted that 75% of IT businesses will offer self-service capabilities to end users by 2021.


• In September 2023, NaphCare, a provider of healthcare services, adopted self-service functionality to evaluate IT service management tools. Also, they aim to enhance the response time of their IT support team.

Furthermore, organizations are moving away from traditional on-premises IT service management solutions toward cloud-based alternatives. The cloud-based IT solution offers greater flexibility, scalability, and accessibility, allowing organizations to adapt quickly to changing business needs and reduce infrastructure costs.

IT Service Management Market Growth Factors

Surge in Digital Transformation Initiatives and Focus on Providing Enhanced Customer Experience Aids Market Growth

Organizations worldwide are undergoing digital transformation to enhance their agility, efficiency, and competitiveness. IT service management plays a crucial role in supporting these initiatives by providing the tools and processes needed to manage and optimize IT services in alignment with business goals. With the proliferation of technologies, such as cloud computing, IoT, and BYOD (Bring Your Own Device), IT environments have become more complex. IT service management helps organizations effectively manage this complexity by providing centralized control, automation, and visibility into IT infrastructure and services. For instance,

• As per the survey, spending on digital technology is expected to grow eight times faster than the global economy in 2023. The total revenue generated by digital products from G2000 organizations will be 40% by 2026.

In addition, there is a growing emphasis on delivering exceptional customer experiences across industries. These service solutions enable organizations to prioritize customer needs, deliver timely and efficient IT services, and continuously improve service quality to enhance overall customer satisfaction.

RESTRAINING FACTORS

High Initial Deployment Cost and Lack of Skilled Resources May Hinder Market Growth

IT service solutions can require significant upfront investment in software, hardware, training, and consulting services. Budget constraints may limit organizations’ ability to invest in ITSM initiatives, particularly for smaller businesses and non-profit organizations. In addition, these solutions require skilled professionals with expertise in service design, process automation, and cybersecurity. The shortage of skilled resources can hinder organizations’ ability to implement and maintain effective IT service management practices.  

ITSM Market Segmentation Analysis

By Deployment Analysis

Growing Need for Cost Efficiency and Scalability Drives Demand for Cloud-based ITSM Solution

Based on deployment, the market is classified into on-premises and cloud.

Cloud based ITSM solutions captured a larger share of the market in 2023, and is expected to continue its dominance by growing at the highest CAGR over the forecast period, as it offers scalability, flexibility, and cost efficiency. This solution allows organizations to access and manage IT services from anywhere with an internet connection. These solutions typically follow a subscription-based pricing model, where organizations pay only for the services they use monthly or annually. This cost-efficient pricing model eliminates the need for upfront capital investment in hardware and software, reducing Total Cost of Ownership (TCO) and improving cost predictability.

Cloud-based IT service management solutions can be deployed quickly and easily compared to on-premises solutions, which require time-consuming installation, configuration, and maintenance. Cloud-based solutions are typically hosted and managed by the service provider, allowing organizations to get up and running with IT service management capabilities faster.

By Enterprise Type Analysis

Increasing Demand for IT Service in Complex IT Environment Fuels the Adoption of ITSM Solutions in Large Enterprises

Based on enterprise type, the market is bifurcated into large enterprises and SMEs.

Large enterprises captured the highest market share in 2023, as they have complex IT infrastructures with diverse technologies, applications, and systems. ITSM solutions help these organizations manage and optimize their IT services, ensuring smooth operations and alignment with business goals. These solutions enable large enterprises to standardize IT processes, workflows, and procedures across different departments, business units, and geographical locations. This standardization promotes consistency, efficiency, and compliance with internal policies and industry regulations.

SMEs are expected to grow at the highest CAGR in the coming years. Many SMEs are experiencing rapid growth and expansion, making scalability a crucial factor in their IT service management solution selection. Cloud-based IT service management solutions offer scalability, allowing SMEs to scale their IT services up or down based on business needs without significant infrastructure investments.

By Application Analysis

Growing Need for Centralized Management and Improved Visibility among Organizations Fuels Demand for IT Service Management Solution

Based on application, the market is divided into configuration & change management, operations & performance management, incident management, problem management, and others (asset management).

Operations & performance management captured a larger share of the market in 2023. IT service management solutions provide a centralized platform for managing operation and performance management applications, allowing organizations to track, monitor, and optimize their IT infrastructure and services from a single interface. These solutions offer greater visibility into the operation and performance management applications, enabling organizations to track Key Performance Indicators (KPIs), identify trends, and generate reports to support decision-making and strategic planning.

Problem management is expected to dominate the market by growing at the highest CAGR during the forecast period, as IT service management solutions help minimize downtime and disruption to IT services by proactively identifying and resolving problems. Faster resolution of problems reduces the impact on business operations, improves service availability, and enhances overall user satisfaction.

By Industry Analysis

Surge in Demand for Data Protection and Regulatory Compliance Propel the Adoption of DRaaS Solution in BFSI

Based on industry, the market is categorized into BFSI, IT & telecommunication, government & public sector, retail & consumer goods, healthcare, manufacturing, media & entertainment, and others (energy & utility and education)

IT & telecommunication held the largest ITSM market share in 2023, as IT service management solutions enable organizations in the IT and telecom industries to deliver high-quality IT services to their internal users, customers, and partners. Features such as problem management, change management, incident management, and asset management help organizations maintain service excellence and meet customer expectations. The IT and telecommunication industries are highly competitive, and customer experience is a key differentiator.

REGIONAL INSIGHTS

By region, the market is studied across North America, Europe, Asia Pacific, Middle East & Africa, and South America.

North America held the largest revenue share in 2023, as it is a hub for technological innovation, with many organizations leveraging advanced IT service management solutions to streamline their IT operations, improve service delivery, and enhance customer satisfaction. Organizations in the region prioritize delivering exceptional customer experiences, and IT service management is vital in achieving this goal by enabling efficient and effective IT service delivery and support. North America is home to many leading ITSM vendors and service providers, offering a wide range of solutions and services to meet the diverse needs of organizations in the region. For instance,

• In March 2023, ServiceNow, the U.S.-based company, unveiled a novel “Now Platform Utah” platform to expand its portfolio. This platform is built to help organizations generate quick outcomes and future-proof their businesses.

These factors are important to fuel the market growth in the region.

Asia Pacific market is expected to grow at the highest CAGR during the forecast period. Many organizations in the region are undergoing digital transformation initiatives to stay competitive and meet evolving customer demands. IT service management helps support these initiatives by providing the tools and processes needed to manage and optimize IT services in alignment with business objectives. Many countries in APAC are experiencing rapid digitalization across industries, driven by factors such as increasing internet penetration, smartphone adoption, and the rise of e-commerce. This solution helps organizations manage and optimize their IT services to support digital transformation initiatives. For instance,

• In August 2022, iZeno, a Logicalis Company, became the first official partner of Atlassian, specializing in ITSM in Asia Pacific. The company’s solution offers superior services to enhance customer satisfaction.

In Europe, the adoption of IT service management is growing at a prominent pace as European organizations prioritize delivering high-quality services and exceptional customer experiences to remain competitive. IT service management enables organizations to align IT services with business needs, improve service delivery efficiency, and enhance overall customer satisfaction. The region has some of the most stringent global data protection and privacy regulations, such as the General Data Protection Regulation (GDPR). Compliance with these regulations drives organizations to implement IT service management solutions to ensure proper management of IT processes, data protection, and privacy compliance.

The Middle East & Africa is expected to showcase noteworthy growth during the forecast period. The MEA region is experiencing rapid urbanization and economic growth, leading to increased investments in technology infrastructure and digital services. IT service management solutions help organizations manage their IT resources effectively, improve operational efficiency, and deliver high-quality IT services to support business growth. Moreover, the adoption of this solution is growing significantly in South America, as many governments in the region are investing in this solution to modernize government services, improve citizen engagement, and enhance public sector efficiency. IT service management solution enables governments to streamline service delivery, automate processes, and improve the overall citizen experience.

List of Key Companies in ITSM Market

Key Market Players are Focusing on Partnership and Acquisition Strategies to Expand Their Analytics Services Globally

Key players are focusing on expanding their global geographical presence by presenting industry-specific services. Major players are strategically focusing on acquisitions and collaborations with regional players to maintain dominance across regions. Top market participants are launching new solutions to increase their consumer base. An increase in constant R&D investments for product innovations is enhancing market expansion. Hence, top companies are rapidly implementing these strategic initiatives to sustain their competitiveness in the market.

List of Key Companies Profiled:

• ServiceNow (U.S.)


• Salesforce, Inc. (U.S.)


• Freshworks Inc. (U.S.)


• Flexera Software, Inc. (U.S.)


• BMC Software, Inc. (U.S.)


• Open Text Corporation (Canada)


• IBM Corporation (U.S.)


• Ivanti (U.S.)


• Broadcom, Inc. (U.S.)


• Atlassian Pty Ltd. (Australia)

KEY INDUSTRY DEVELOPMENTS:

• February 2024: Flexera Software acquired Snow Software. This acquisition is expected to allow customers to create more value from technology investment and enhance their IT team’s capability to serve their customers.


• January 2024: Freshworks Inc. changed the IT service management system at Scotland’s office location to enable automation, self-service, and centralized administration.


• October 2023: Ivanti released its new capabilities for the “Ivanti Neurons platform.” This platform was released to enhance the digital employee experience, improve vulnerability prioritization, and provide scalability to customers. Also, this platform will allow IT and security teams to have a complete view of their IT estate.


• September 2023: ServiceNow released a new range of platforms that includes IT Service Management, HR Service Delivery (HRSD), Customer Service Management (CSM), and Creator integrated with generative AI technology. With this platform expansion, the company aims to boost its productivity and enhance customer experience.


• June 2023: Flexera software launched Flexera One Select, SaaS-based IT management solutions for IBM Corporation. The company aims to simplify and automate IBM-only license reporting with this new solution.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

Report Scope & Segmentation

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024-2032
Historical Period	2019-2022
Growth Rate	CAGR of 15.4% from 2024 to 2032
Unit	Value (USD Billion)
Segmentation	By Deployment On-premises Cloud By Enterprise Type Large Enterprises SMEs By Application Configuration & Change Management Operations & Performance Management Incident Management Problem Management Others (Asset Management) By Industry BFSI IT & Telecommunication Government & Public Sector Retail & Consumer Goods Healthcare Manufacturing Media & Entertainment Others (Energy & Utility and Education) By Region North America (By Deployment, Enterprise Type, Application, Industry, and Country) U.S. (Application) Canada (Application) Mexico (Application) South America (By Deployment, Enterprise Type, Application, Industry, and Country) Brazil (Application) Argentina (Application) Rest of South America Europe (By Deployment, Enterprise Type, Application, Industry, and Country) U.K. (Application) Germany (Application) France (Application) Italy (Application) Spain (Application) Russia (Application) Benelux (Application) Nordics (Application) Rest of Europe Middle East & Africa (By Deployment, Enterprise Type, Application, Industry, and Country) Turkey (Application) Israel (Application) GCC (Application) North Africa (Application) South Africa (Application) Rest of the Middle East & Africa Asia Pacific (By Deployment, Enterprise Type, Application, Industry, and Country) China (Application) India (Application) Japan (Application) South Korea (Application) ASEAN (Application) Oceania (Application) Rest of Asia Pacific