What are IT Services
‘IT services’ is a frequently used term in business. Though it is widely used, it’s exact definition can be difficult to pin down. ITIL4 (a guide for IT operations) defines IT services as any means of enabling value co-creation by assisting in creating outcomes for customers. What this means in practice is that any service provided by a company using or assisting in the use of information technology is considered an ‘IT service’.
There are several kinds of IT services. The first distinction is to separate hardware from software. Hardware IT services are fairly straightforward. Service providers help businesses repair and upgrade existing physical technology to reduce costs and increase a company’s efficiency. Software IT services assist companies in ensuring that software is up to date and compliant with any end user license agreements.
Software IT Services
Software IT services generally include three main types. Network infrastructure, mobile device management, and cloud computing.
Network infrastructure encompasses internet connectivity and internal communication between computers and other devices. The main service provided from IT professionals in this area is network security. Businesses that use remote-access, payment systems, and other complicated network features must prioritize security. IT professionals can create a more secure network through incorporating multi-factor authentication, password requirements, or preventing logins from outside the network.
Mobile Device Management (MDM)
MDM ensures that only secure devices are able to access the valuable data and applications that help a company run. IT service providers will create a program that allows employees to bring their own device to work while still maintaining the integrity of the network by limiting these device’s access to secure data and assets.
Cloud computing has received a lot of attention recently for its ability to provide small to medium size enterprises with access to powerful technology, while allowing them to only pay for what they use and scale their operations easily. IT service professionals provide assistance through helping companies to configure and manage the cloud systems they are using. Additionally, they will help prevent threats from viruses or other bad actors attempting to infiltrate the network.
The Importance of IT Services
Every business, either large or small, will eventually need IT services. Businesses carry important, confidential information, like employee salaries and intellectual property in digital format. For that reason, it is important that the network is able to protect this valuable information through adequate security protocols.
Including competent IT services into a business will also provide managers with the ability to deeply assess business needs and provide greater scrutiny of the company’s data landscape.
An efficient system in place for backing up critical files is important as well. For example, in the early days of Pixar, an employee accidentally deleted all files related to Toy Story 2 from the company’s servers. Luckily, an employee had created a backup in their home office. Effective backup systems like this can help minimize these risks to protect precious digital resources from being lost or stolen.
Another benefit of IT services is improved decision making. Good decisions are based on solid research and logic. Since research is limited to only the information that is available, IT services can increase the reliability and depth of the research by providing information that would otherwise be unavailable. There are several tools available that can assist with research through AI and data analytics. Without reliable IT services, these types of tools could be out of reach for professionals when they are needed most.
Using IT services to maximize the available professional resources and strengthen daily operations are a common part of today’s corporate world. Companies that do not take advantage of these tools will be less capable of competing with their more efficient competitors and will limit their growth.
By understanding the importance of IT services, companies will equip themselves and readjust their budgets to take full advantage of the technology as it continues to grow and change.
The Market Size of the IT Industry by Region
The market size for the IT industry has been growing over the past several decades, as companies are incorporating the inherent advantages of IT services into daily operations. Over the past two years, the dominant market for IT services has been North America, with 35% of the global market. Asia, with 32%, and Europe, with 22% have also taken large sections of the industry and are projected to continue to dominate this industry in the future.
The IT services industry is growing faster than many other established industries. Even after taking into account the impact of the Coronavirus pandemic on the global economy, IT services will continue to grow at a comparably rapid rate.
The pandemic showed the necessity and flexibility of IT services, as companies with operations that were built with solid IT foundations were able to thrive (online meetings, streaming, gaming, etc.). According to Statista, the IT services industry will continue to grow, reaching $1,277 billion in global spending by 2022.
In North America, global spending is projected to reach $640 billion by 2025, securing the region as the most profitable region for IT services. In the same year, Asia Pacific will reach $240 billion, and EMEA is expected to reach $390 billion. These projections show that the current market share (North America being the largest region, followed by Asia) of IT services is representative of the future.
There is a trend among large companies to outsource their IT services to cheaper regions overseas. However, these outsourced services are generally the simpler services that are more repetitive. More complicated services will generally require an intricate understanding of the technology being used and the company’s needs for that technology.
Companies with the intention of implementing IT services into their daily operations will need to determine the course of action that works best for them by analyzing their IT service needs and a budget that can meet these needs.
Biggest Companies in IT Services Industry
Topping the list of the largest IT services companies is Dell Technologies. Dell tops the list with annual revenue surpassing $91 billion and 10 million clients throughout the world. Additionally, Dell partners with a large majority of companies on the Fortune 500 list and is also ranked as the fifth biggest tech company in the world. Dell provides services in AI, virtual reality, IT infrastructure, data centers, and cybersecurity. These wide range of services, coupled with their hardware and brand recognition, has made Dell the largest company providing IT services in the world.
The second largest IT services company in the world is IBM. IBM has a long history of involvement in the technology sector and is one of the most recognizable names in the industry. With global annual revenue reaching over $77 billion, IBM easily secures its spot at number two. IBM is involved in most aspects of IT services, including digital security, IoT, data analytics, blockchain and AI. Around 97% of banks and 80% of retailers around the world are in business using IBM’s services. This massive market penetration ensures that IBM will be around impacting global markets through IT services for years to come.
The third and final company we cover is CISCO Systems. Cisco Systems has over $51 billion in revenue and over 75,000 employees. CISCO is well known for its involvement in creating switches and routers, but recently they have moved into building software-based solutions. Starting in 2015, the company began their focus on software solutions with an emphasis on Internet of Everything, cybersecurity, data centers, software packages, and analytics.
The fact that these three companies are based in the United States underscores the importance of North America for this industry. The area has been able to thrive in the United States because of the country’s highly educated workforce and meaningful investment into the technology sector.
As smaller companies look to understand this industry and incorporate its best practices, these companies will be a great source of knowledge and application of this knowledge to scale their businesses.
Future of IT Services
Despite the USA leading the landscape for IT companies, Asian countries have emerged with a prominent market for outsourced IT services. With lower costs, highly skilled workers, and highly developed IT markets, countries like India, China, and the Philippines have really become a reliable source of IT services for companies around the world.
Countries like South Korea, Japan and China are also in the race to improve their IT service markets. With sophisticated infrastructure, fast internet and continually developing IT services markets, they have seen year on year growth in revenue, which is expected to continue all the way to 2026.
Navigating the new reality that IT services has created has changed the game for most corporations. It is becoming clear that there is a divide between two types of companies, those who have already incorporated IT services and those who have not. Surviving in this new environment means companies must compete in a way that takes advantages of this new reality and transform the way they provide services and produce goods. Customers will not only expect increased speed, but also quality.
Tomorrow’s IT services will have operating models that take advantage skilled employees at any level of an organization while maintaining its efficiency at scale throughout production. Companies will have to readjust financial policies to account for the new insights created from IT services and invest in areas the data proves to be valuable. Corporations will also have to create an adaptive workforce that can flexibly respond the evolving technology and the skills it requires. Finally, it’s important to do these things in a way that builds trust in customers and client. Data security and transparency in operations will ensure future growth that can protect clients and build lasting brands.
INS Global and IT Service companies
Over the past few years, INS Global has helped numerous IT services expand all around the world. No matter where you are looking to expand your IT services business, we will provide the assistance you need. For nearly two decades we have been providing PEO, recruitment and many other services to companies who wish to expand their global presence. Get in touch with us today and let our expert consultants assist you.