Cloud Based ITSM Market To Hit USD 12.4 Billion by 2033

Introduction

The Cloud Based ITSM (Information Technology Service Management) market is rapidly expanding and becoming a cornerstone for enterprises navigating cloud-based services. In 2023, the market was valued at USD 4.8 billion, and it is expected to rise to USD 5.3 billion by the end of 2024. This growth trajectory is predicted to continue with a CAGR of 10.0%, reaching USD 12.4 billion by 2033.

The increasing complexity of IT environments and the need for agile IT solutions are driving the demand for cloud ITSM services. Advanced technologies like artificial intelligence (AI) and machine learning (ML) are being integrated into cloud ITSM platforms to enhance decision-making capabilities, predictive analytics, and user experience. Strategic acquisitions and partnerships are also broadening service offerings and customer bases, with companies like Axios Systems, BMC Software, and Citrix Systems being key players. The adoption of remote working models and the consequent need for efficient, cloud-based IT service management solutions that can support distributed teams are further fueling the sector’s growth.

However, the market also faces challenges, including integration concerns within complex business organizations, and concerns regarding data ownership, safety, and security. These obstacles may hinder growth to some extent, but they also present opportunities for innovation and the development of more seamless and secure cloud ITSM solutions.

Key Takeaways

• The global cloud-based ITSM market is projected to reach a substantial valuation of USD 12.4 billion by 2033, with a steady CAGR of 10% anticipated over the forecast period.
• The Cloud-Based ITSM industry was valued at USD 4.8 billion in 2023 and is expected to reach USD 5.3 billion by the end of 2024.
• The Solution segment held a dominant market position in 2023, capturing more than a 73% share.
• Large Enterprises accounted for over 60% of the market share in 2023, reflecting their growing reliance on cloud-based solutions.
• The IT and telecom sector held the largest market share in 2023, capturing over 24% of the Cloud-Based ITSM market.
• North America led the market in 2023, holding over 40% of the global market share.
• Hewlett Packard Enterprise, ServiceNow, IBM Corporation, and Microsoft Corporation are among the market’s top key players.

Cloud-Based ITSM Statistics

• The average waiting time in customer service queues decreased from 5 minutes and 16 seconds in 2022 to 3 minutes and 40 seconds in 2023.
• By 2025, 95% of new digital workloads are predicted to run on cloud-native platforms, up from 30% in 2021.
• 81% of customers try to solve issues on their own before contacting customer service.
• 90% of customers worldwide expect organizations to offer online self-service customer support portals.
• 50% of respondents would avoid self-service if it leads to a negative experience.
• Companies using AI-powered knowledge base tools observe a 5-7% increase in first-contact resolution.
• Nearly 89% of millennials rely on search engines before reaching out to customer service.
• Implementing a robust Knowledge Management System (KMS) can reduce information search time by 35%.
• Bite-sized learning can boost productivity by nearly 14%.
• Engagement significantly impacts employee stress levels, causing an annual productivity loss of $8.8 trillion globally.
• Companies using Generative AI for ticket resolution experience a 75% reduction in resolution times.
• 80% of employees perceive lost productivity from just 12.6% of tickets.
• SaaS BPM indicates a 41% decrease in absenteeism and a 59% reduction in turnover with engaged employees.
• 72% of employees believe AI-powered automation can increase their workload by 30%.
• Ipsos research shows an increase in AI understanding in Europe over the past 18 months.
• 92% of businesses utilize automation and AI for personalized service and support.
• By 2026, 10% of large enterprises will have a mature zero-trust program in place.
• 59% of companies plan to increase their IT staff, while 63% struggle to find IT talent.
• 76% of employees are more likely to stay in a company if provided ongoing training.
• 94% of employees would stay longer at a company if their career development was invested in.
• Approximately 44% of enterprises foresee 5G technology as a major IT capability.
• IT automation is prioritized by 71% of IT organizations.
• Hybrid cloud solutions are gaining traction due to advancements in cloud computing.
• 48% of businesses plan to migrate IT applications to the cloud in 2022.
• Enterprises should consider investing in cloud ITSM in 2022 for streamlined operations and enhanced productivity.
• In 2023, around 67% of IT organizations prioritize enhancing employee experience.
• Basic ITSM capabilities, like change enablement and problem management, need improvement according to 64-69% of organizations.
• Organizations reporting “great” ITSM success are twice as likely to have used their ITSM tools for over two years.

Use Cases Across Industries

• Healthcare: Cloud-based ITSM solutions are pivotal for healthcare providers, ensuring the security and accessibility of patient data. These platforms streamline operations and maintain compliance with regulations like HIPAA, automate appointment scheduling, and foster improved communication between healthcare professionals, enhancing care coordination and patient experiences.
• Financial Services: Financial institutions leverage ITSM tools for managing IT infrastructure efficiently, mitigating security risks, and delivering exceptional customer service. Automation of compliance reporting and monitoring of transactions and fraud detection are facilitated by ITSM solutions, providing round-the-clock support to customers through various channels.
• Manufacturing: In manufacturing, ITSM tools help in optimizing production processes, minimizing downtime, and ensuring product quality. They provide real-time insights, automate tasks, facilitate inter-departmental collaboration, track inventory levels, and schedule maintenance for machinery.
• Retail: Retailers use ITSM solutions to integrate online and offline sales channels, track customer preferences, automate order fulfillment processes, and ensure timely product delivery to enhance customer satisfaction and brand loyalty.
• Education: Educational institutions utilize ITSM platforms to manage diverse IT assets, support remote learning, ensure data privacy, improve administrative efficiency, deploy e-learning resources, and foster collaboration among students and educators.

AI Integration in ITSM

The integration of AI into ITSM is set to redefine service desk operations by automating workflows and providing intelligent solutions to common IT service management challenges:

• Chatbots: AI-driven chatbots are employed for handling specific categories of requests and incidents, such as printer problems. These bots can guide users through documented solutions, automatically create and assign tickets, and even proactively identify and resolve issues before they are reported by users.
• Knowledge Management: AI algorithms enhance knowledge management by automatically rating solutions based on their success rates, identifying areas requiring additional documentation efforts, and improving the overall effectiveness of the IT service desk’s knowledge base.
• Service Request Management: AI technologies are applied to automate complex service request workflows, such as employee onboarding and adapting processes dynamically based on historical data for higher efficiency.
• IT Change Management: AI minimizes risks in IT Change Management by improving planning, risk evaluation, and analysis, significantly reducing the chances of failure due to human error.
• IT Asset Management: AI and Machine Learning (ML) systems monitor and predict the performance of IT assets, enabling preemptive maintenance and anomaly detection, thus ensuring the smooth operation of IT infrastructure.

Key Players Analysis

• Hewlett Packard Enterprise Development LP (HPE) is a leading player in the Cloud-Based ITSM sector. HPE is actively working towards shaping the future of the industry with its innovative approaches, particularly in AI-native architecture and hybrid cloud solutions. In November 2023, HPE unveiled a range of AI-native and hybrid cloud offerings aimed at machine learning development, data analytics, AI-optimized file storage, AI tuning and inferencing, and professional services. These solutions leverage HPE’s strengths in hybrid cloud, supercomputing, and AI/ML software, enabling organizations to harness the power of AI to transform their operations and customer engagements. HPE’s initiative emphasizes its commitment to helping organizations become AI-powered enterprises by providing a curated mix of software and infrastructure designed to accelerate the AI lifecycle from edge to cloud.
• HPE has also made a strategic move to supercharge its edge-to-cloud strategy and establish leadership in an AI-native environment. In January 2024, it announced its acquisition of Juniper Networks. This acquisition is set to merge HPE and Juniper’s complementary portfolios, offering customers comprehensive solutions that simplify their increasingly complex connectivity needs. By leveraging Juniper’s expertise in AI-driven networking solutions and HPE’s strengths in hybrid cloud and AI, the combined entity aims to accelerate innovation in networking optimized for hybrid cloud and AI, significantly expanding HPE’s reach in the Cloud-Based ITSM sector.
• In March 2021, IFS acquired Axios Systems, a well-known provider in cloud-based IT Service Management (ITSM) and IT Operations Management (ITOM) sector. This acquisition has added Axios’s ITSM and ITOM solutions to IFS’s service management portfolio, strengthening their offerings. Axios Systems is recognized for its quality omnichannel service management solution and is now part of IFS’s aim to support customers’ digitalization journeys and service-led evolution. The combination of IFS and Axios Systems enhances workflow design and automation capabilities, driving internal efficiency and creating opportunities for better customer service.
• ServiceNow is a leader in the cloud-based IT Service Management (ITSM) sector, well-known for its comprehensive ITSM solutions that enhance IT services, boost IT flexibility, and increase user satisfaction. The platform’s recent strategic initiative is the collaboration with Amazon Web Services aimed at integrating digital workflows with AWS to support customers on their digital transformation journeys. This partnership helps organizations optimize their ITSM practices using the cloud, showcasing ServiceNow’s commitment to innovation and customer success in the digital age.
• Ivanti acquired Cherwell Software in January 2021, a key player in the cloud-based ITSM sector. This strategic acquisition is aimed to expand Ivanti’s Neurons platform to offer comprehensive service and asset management solutions that span from IT departments to various business lines, and from every endpoint to the IoT edge. This move reinforces Ivanti’s commitment to innovation by integrating Cherwell’s strengths in enterprise service management with Ivanti’s broader IT solutions.
• IBM has enhanced its offerings in the cloud-based ITSM sector by launching new services aimed at simplifying security across hybrid cloud environments. These services integrate IBM’s own technologies with cloud-native and third-party solutions, showcasing IBM’s commitment to securing dispersed IT resources effectively. This initiative underlines IBM’s approach to providing comprehensive security strategies that encompass the entire cloud ecosystem, addressing the complexities and risks associated with hybrid cloud configurations.
• Microsoft Corporation solidified its position in the cloud-based ITSM sector by acquiring Nuance Communications in March 2022. This move highlights Microsoft’s strategy to provide industry-specific cloud solutions that transform work and care environments, utilizing Nuance’s expertise in conversational AI across various sectors. The acquisition aims to improve organizational outcomes through AI-driven, cloud-based solutions while focusing on secure, industry-specific transformations.
• Citrix Systems Inc. is enhancing its ITSM adapter service to streamline onboarding and other processes for its users. By integrating with ServiceNow, the updates aim to save significant time and effort for enterprises with self-service, workflow automation, and centralized incident handling. These developments show Citrix’s commitment to improving IT service management and automation for its clients.
• CA Technologies, now a part of Broadcom, continues to develop its IT Service Management (ITSM) solutions with a focus on modernization, catering to the evolving needs of IT service management. Their approach integrates cutting-edge features and capabilities to support the dynamic role of ITSM, highlighting their commitment to innovation in this sector.
• BMC Software, a leader in the IT and enterprise software industry, continues to lead in IT Service Management (ITSM) tools. Gartner’s Magic Quadrant for ITSM Tools has named BMC Helix ITSM solution a Leader for eight consecutive years, demonstrating BMC’s commitment to innovation and excellence in the ITSM sector. This accolade shows BMC’s ongoing effort to provide advanced solutions in an evolving market.
• Ivanti has been proactive in enhancing its cloud-based ITSM solutions, focusing on reducing IT infrastructure costs and streamlining service management processes. They offer a scalable, secure, and easy-to-manage cloud ITSM solution designed to lower ownership costs and redeploy resources to higher-value activities. This approach allows organizations to stay up-to-date with the latest ITSM features and trends, offering the flexibility to scale technology in response to changing organizational needs.

Conclusion

The Cloud-Based ITSM market is experiencing strong growth due to the increasing demand for agile and integrated IT solutions, coupled with the expanding use of cloud computing. Despite facing challenges related to integration and data security, the market’s growth is supported by continuous technological advancements and strategic industry moves. As enterprises continue to recognize the strategic value of technology investment, the Cloud-Based ITSM market is expected to maintain its growth momentum, presenting promising opportunities for providers and users alike.

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