Summary
Despite a slowing global economy, tepid IT service productivity growth, high genAI tech adoption barriers, and increased competition from software companies, spend on IT services excluding infrastructure as a service (IaaS) will see a 1.8% CAGR from 2024 to 2029. This rises to 4.8% when IaaS is included. GenAI forces IT service vendors to move toward fixed-price and asset-based pricing; develop AI partnerships and alliances; increase margins through the elimination or automation of low-value-added tasks; focus genAI on sets of narrow, well-defined, high-value use cases to facilitate their adoption; and focus on emerging niche growth areas like sustainability, defense, and tech sovereignty.
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