North America IT Services Market Growth Forecast: MSP Implications
The North America IT Services market is expected to enjoy strong growth for the next few years, but MSPs will need to carefully navigate professional, cloud, managed and security services amid shifting customer demands and intensified competition.
First, the good news: The North America IT Services market is expected to reach $660.9 billion by 2026, up from $459.2 billion in 2021. That’s a compound annual growth rate (CAGR) of roughly 7.6 percent, according to Reportlinker.com. Predictably, enterprises are increasingly outsourcing their operational, day-to-day activities surrounding the IT infrastructure to MSPs.
Fastest-Growing Vertical Market for IT Services: Healthcare
Healthcare will be the fastest-growing vertical for IT services through 2026, Reportlinker predicts. High-demand IT services in the healthcare vertical will include:
- software development, integration and maintenance;
- networking development, integration and maintenance;
- information security;
- mobile services; and
- Web applications.
Still, general purpose MSPs should proceed into the healthcare sector with caution. Indeed, scores of MSPs struggled to capitalize on EHR (electronic health records) when that market “boom” surfaced about a decade or so ago.
Meanwhile, the Reportlinker research focuses heavily on the largest IT service providers — such as Accenture, Cognizant, DCX, GTT, HCL, Hewlett Packard Enterprise, IBM, Infosys, Tata, and Wipro. A few pure-play MSPs — such as Navisite — also surface in the report.
The mix of company profiles provides a healthy reminder that hot markets (namely, IT services) don’t necessarily guarantee success for all industry participants. Indeed, quite a few IT service providers in the report — including DXC, GTT and IBM — have generated inconsistent financial results in recent years.
IT Services in North America: MSP Opportunities, Challenges
MSPs in the SMB sector will need to navigate multiple IT services opportunities and challenges. Among the biggest opportunities:
- cloud managed services;
- managed security services; and
- managed detection and response (MDR) security services.
Each of those three IT services sectors will generate double-digit compound annual growth rates (CAGRs) over the next few years, according to third-party research.
Still, each of those sectors also involves business challenges. Chief among them: Software and cloud platform providers that introduce “fully managed” services for their cloud, infrastructure and security services.