Asia-Pacific IT Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Asia-Pacific IT Services Market revenue is expected to grow at a CAGR of 8.3% over the next five years. Increased IT spending, advanced technology such as artificial intelligence, and ever-expanding cloud-based offerings have increased the demand for the IT services market.

Key Highlights

• Key players in the IT services market are focusing on expanding their businesses and strengthening their market positions through collaborations and partnerships. For instance, 21 Vianet Blue Cloud partnered with Microsoft to accelerate ever-growing digital needs.
• The demand for network services and data center construction will grow over the next five years. For Instance, the Keppel Data Center Fund II will collaborate with Heying to create a new greenfield data center in Greater Beijing. Construction will be completed by the end of the current year.
• The extensive use of digital payments and the introduction of advanced technologies such as AI, cloud computing, and blockchain technology used in the end-user industries are likely to drive the growth of the IT services market over the next five years. For instance, HSBC has signed a multi-year agreement with Oracle to accelerate the bank’s digital transformation.
• The adoption of remote healthcare and wearable devices in this sector has been gaining traction over recent times, which, in turn, has been one of the significant factors influencing the healthcare IT market. The major trends in wearable connected devices include increasing demand for pain management wearable devices, increasing use of wearables for cardiovascular disease management, and others. For instance, Cognizant and Microsoft cooperated to develop a new digital health solution to improve remote patient monitoring.
• During the COVID-19 outbreak, there was a growing adoption of cloud services which is expected to create a favorable market scenario for the growth of the IT services market. The post COVID-19 scenario has led to a remarkable increase in the usage of digital solutions across the Asia-Pacific. The rising adoption of advanced technologies and increasing cyber security investment are some of the major factors driving the demand for IT services in the Asia-Pacific.

Key Market Trends

Growing Demand for Cloud Services

• The IT services market is gaining traction with advanced technology, such as cloud computing. Artificial intelligence is also extending its application across the end-user segment, fueling market growth over the next five years. For Instance, Keppel Data Centers Holding (Keppel DC) has announced a collaboration with AsiaPac Technology (AsiaPac, a wholly-owned subsidiary of M1 Limited), which will offer Keppel DC’s clients access to hybrid and multi-cloud services effectively and rapidly support their business's changing needs.
• Increased cloud adoption will result in a higher volume of data generation and, as a result, a higher need for data storage and processing. For Instance, Alibaba Cloud has pledged to invest USD 1 billion in enhancing ecosystem capabilities while displaying new products and comprehensive customer support for complete services.
• Philips launched the HealthSuite System of Engagement with new AI capabilities to accelerate the digitalization of healthcare. HealthSuite System of Engagement is a comprehensive set of capabilities leveraging intelligence in dynamic workflows, securely harnessing the power of data across the health continuum. New HealthSuite AI capabilities include cloud-based managed AI workflow and DICOM interoperability in a secure environment. Such initiatives in the healthcare sector would drive more demand for the IT services market.
• During the COVID-19 pandemic and post-COVID-19 scenario, most people preferred the work-from-home model, thus creating more demand for cloud-based services. Key players in the market are now concentrating on expanding their cloud computing services that support 5G networks.

India is Expected to Register Significant Market Growth During the Forecast Period

• The growing adoption of cloud computing in India, increasing internet penetration, data center construction, government regulations for data generated in the country, and growing investment by foreign players are some of the major factors driving the demand for the IT services market in India.
• According to the National Broadband Plan conceived by the Federal Communications Commission (FCC) in India, the healthcare industry can save around USD 700 billion in the next 15-20 years with remote patient monitoring technology.​ Such advancement in the healthcare industry will create new growth opportunities for the IT services market.
• The growing adoption of cloud-based solutions and services for the storage of critical information of customers and the increasing number of cyberattacks are driving the demand for cloud-based services in the BFSI segment. For Instance, Oracle offers a local cloud in India to drive growth in the banking sector. Oracle has clients such as Axis Bank, ICICI Bank, Federal Bank, Kotak Mahindra Bank, and SBI Card.
• Data center construction is growing in India and thus increases demand for the IT services market. For Instance, Microsoft plans to construct its fourth data center in India at Hyderabad, Telangana, which will be operational by the end of 2025. The corporation intends to invest over Rs 15,000 crore over 15 years in building this data center.
• According to NASSCOM, the data center construction investment is growing, and by 2025 data center construction investment is expected to reach USD 4.6 billion. Such investment activities would create more demand for the IT services market over the next five years.

Competitive Landscape

The Asia-Pacific IT services market is highly competitive. Key players in the IT services market dominate the market in terms of market share. Some major market players are Accenture Plc, Capgemini SE, Cognizant Technology Solutions, Infosys Ltd, and Tata Consultancy Services Ltd.

As of August 2022, Tata Consultancy Services is building an advanced research and innovation facility in Hyderabad to incubate digital solutions for Consumer Packaged Goods (CPG) firms that use SAP systems.

In November 2022, Tata Consultancy Services expanded its collaboration with Randstad to modernize the latter's application estate on a cloud, boost the security posture and accelerate its growth.

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• The market estimate (ME) sheet in Excel format
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