Breaking News

Global IT Services Spending to Grow 4.8% Annually Through 2029, Driven by GenAI and Cloud Adoption

Global IT services spending is projected to grow at a 4.8% compound annual growth rate from 2024 to 2029, driven by enterprise adoption of generative AI, strong demand for cloud services, and expansion across financial services, manufacturing, energy, and public sector markets, according to a new Forrester report.

The forecast, titled "Global IT Services Market Forecast, 2025 To 2029," predicts this growth despite ongoing economic headwinds and productivity challenges facing the industry.

Cloud services are expected to dominate growth, with Infrastructure as a Service projected to expand at a 21.9% CAGR through 2030—double the rate of software growth. Indian IT giants including Tata Consultancy Services and Infosys reported strong demand for sovereign cloud capabilities, while Australian enterprises are accelerating hybrid cloud adoption for compliance and scalability.

Generative AI is accelerating IT services adoption across regions. Goldman Sachs expects 10-20% of Chinese enterprises to adopt genAI by 2030. In India, Infosys and Wipro are embedding AI into cloud migration and automation projects, while Singapore-based firms are prioritizing AI-driven cybersecurity and compliance solutions.

Financial services and public sector organizations are leading regional demand in Asia-Pacific, with banking and insurance sectors investing heavily in technology modernization to manage regulatory compliance and address technology obsolescence. Defense and public sector projects in Australia and Singapore are exploring genAI applications for operational efficiency and decision-making.

Mergers and acquisitions are fueling market growth, with Accenture capturing nearly 50% of its 2024 revenue growth through acquisitions. Capgemini expanded its Asian footprint through WNS Holdings, while Japan-headquartered NTT DATA posted the fastest IT services growth among the top 20 providers, driven by demand for digital transformation and AI services.

GenAI is reshaping business models across the sector. IT service vendors in Asia-Pacific are shifting to outcome-based and asset-based pricing, automating low-value tasks, and investing in areas such as sustainability and technology sovereignty. Infosys trained 85% of its workforce—275,000 employees—in AI and genAI, while TCS reported that 70% of its workforce has foundational genAI skills.

"The IT services market is entering a transformative era," said Michael O'Grady, principal forecast analyst at Forrester. "Generative AI and cloud are not just incremental technologies—they are redefining how enterprises operate, compete, and deliver value worldwide."

O'Grady added that firms embracing AI-driven efficiencies, sovereign cloud strategies, and outcome-based pricing models will be more likely to thrive, urging business leaders to invest in scalable AI use cases, strengthen data governance, and build partnerships that accelerate innovation.