Cloud It Service Management (Cloud Itsm) Market by Vertical (BFSI, IT & ITeS, Retail & Consumer Goods), Components (Solutions (Service Portfolio Management, Configuration & Change Management, Service Desk Software) and Services) - Partner & Customer Ecosystem (Product Services, Proposition & Key Features) Competitive Index & Regional Footprints by MarketDigits - Forecast 2024 – 2032

The Cloud IT Service Management Market is projected to reach a size of USD 12.2 billion by 2025, with a Compound Annual Growth Rate (CAGR) of 21.2%. In 2020, the market was valued at USD 4.7 billion.

The growth of the Cloud ITSM Market is expected to slow down after the COVID-19 pandemic, as it is already a matured market. Although technology spending in the Asia-Pacific (APAC) region has increased, the recent impact of COVID-19 is likely to pose challenges.

Impact of COVID-19:
The COVID-19 pandemic has brought about significant changes in the global business landscape. While it has exposed weaknesses in various sectors, it has also provided opportunities for cloud ITSM vendors to expand their business across enterprises. The adoption of cloud technology has increased during the lockdown imposed due to COVID-19. Many companies have reduced their IT spending in 2020 and are strategically reevaluating their capital expenditure (CAPEX) plans. Some companies are considering CAPEX models only if absolutely necessary and opting for operational expenditure (OPEX) models instead. To implement these strategies and reduce capital spending during these financially challenging times, organizations are shifting towards the public cloud. This situation presents favorable conditions for cloud ITSM vendors, as they can offer more opportunities to a large client base in untapped markets.

Market Dynamics
Drivers: Increasing shift to cloud-based technologies
The growing adoption of cloud-based technologies has created a range of opportunities for vendors offering cloud-based IT Service Management (ITSM) solutions. Organizations are increasingly seeking to obtain IT services externally, paying for them based on their actual usage, rather than investing in building and maintaining on-premises IT infrastructure. While ITSM solutions were once considered complex and costly when deployed on-premises, the availability of cloud-based versions has made them more accessible to small and medium-sized enterprises (SMEs). Additionally, large enterprises are opting for cloud-based ITSM solutions to improve the management of their IT resources and align their IT services with their real-world business needs.

As the adoption of cloud technology continues to grow, more enterprises are migrating their workloads to the cloud. This shift has resulted in a significant demand for ITSM services to effectively manage the increasing traffic of applications and services in the cloud. Deploying ITSM solutions in the cloud presents excellent growth opportunities as they help streamline operations. By migrating enterprise applications and ITSM operations to the cloud, organizations can save substantial infrastructure costs. The cost-effectiveness, agility, and scalability offered by cloud services have proven to be advantageous for organizations, prompting them to move away from traditional on-premises ITSM solutions. This trend paves the way for the expansion of cloud-based ITSM in the coming years.

Restraints: Security and privacy concerns for confidential data and business processes
Ensuring data security is a crucial aspect of maintaining business continuity. In today's digital landscape, access to critical information presents numerous challenges, particularly as enterprises storing sensitive data are prime targets for cybercriminals. The privacy and confidentiality of organizational data play a vital role in the operations of enterprises, causing many companies to hesitate in migrating their data and business processes to the cloud. Instead, they opt for on-premises IT Service Management (ITSM) solutions, which hinders the growth of the cloud ITSM market. Despite advancements in cloud-based ITSM solutions, data security remains a significant challenge in this market.

Enterprises are highly sensitive about their communication channels due to the direct impact on the security and privacy of their data. This concern becomes even more critical in the cloud ITSM market, as the customers' businesses rely entirely on the security and privacy of their data and the available IT services. Any disruption to the organizational data can lead to significant setbacks for clients' businesses. Therefore, continuous monitoring of cloud ITSM processes is essential to minimize risks and enhance the security features of these solutions. Cloud ITSM solutions must prioritize the safety of sensitive data during interactions through systems and services.

Challenges: Organizations face significant challenges when it comes to integrating different IT systems and their communication protocols, mainly due to the lack of standard procedures and concerns related to traditional architectures. Integration, which involves connecting multiple IT systems, is a complex process that poses obstacles for enterprises. In recent years, companies have experienced growth through partnerships, mergers, and acquisitions, resulting in complex and diverse IT environments. This complexity makes transitioning to the cloud a prominent issue for many organizations. They struggle to identify the most suitable cloud IT Service Management (ITSM) solutions and find efficient ways to implement them while considering their existing IT architecture. As more companies embrace cloud technology, they encounter the challenge of integrating cloud ITSM solutions into their intricate and heterogeneous environments, which incurs additional costs and overhead.

Opportunities: Growing demand among small and medium-sized enterprises
The demand for cloud-based IT Service Management (ITSM) solutions has increased among SMEs and startups, primarily due to the cost benefits they offer. Compared to on-premises ITSM solutions, which require substantial capital expenditures (CAPEX) and ongoing operational expenditures (OPEX) for setting up and maintaining IT infrastructure, SMEs and startups are hesitant to adopt them. Instead, they prefer public cloud services that align with their business requirements and allow them to invest in revenue-generating services, considering their limited budgets. Pay-per-use and license-based models are more favorable for SMEs and startups, catering to their specific business needs. ITSM solution providers can quickly set up and configure the ITSM system in a Software-as-a-Service (SaaS) environment, further enhancing the appeal of cloud-based ITSM solutions for SMEs and startups. The additional benefits offered by these solutions are driving market growth and increasing their popularity among startups and SMEs.

Regarding the components, the solutions segment is expected to contribute significantly to the growth of the cloud ITSM market during the forecast period. ITSM solutions focus on managing IT infrastructures, components, business applications, and associated processes. Various industry groups, such as ITIL, COBIT, and IT4IT, provide recommendations for implementing ITSM services and processes to address specific business needs. As enterprises rapidly migrate their applications to the cloud, they seek secure, stable, and reliable cloud infrastructure to gain agility, reduce operational costs, and ensure compliance with ITSM standards.

Cloud ITSM offers several advantages, including minimal upfront investments through subscription-based models. SMEs can leverage cost-effective ITSM implementation to establish scalable IT help desks tailored to their requirements. Some cloud ITSM providers offer services based on the number of users accessing the system, which is beneficial for SMEs with limited users. Cloud ITSM solutions are gaining traction across enterprises of all sizes due to their integrated capabilities, such as dashboards, notification alerts, service level management, and data management services. Prominent vendors like ServiceNow, BMC, Cherwell Software, Ivanti, Broadcom, and IBM offer cloud ITSM solutions.

In terms of organization size, large enterprises, defined as those with more than 1,000 employees, play a significant role in driving the growth of the cloud ITSM market. These enterprises rely on cloud ITSM offerings to effectively deliver services to their customers. The adoption of cloud ITSM solutions is particularly high among large enterprises due to the increasing demand for cloud automation, a trend expected to continue in the forecast period. Large enterprises heavily invest in advanced technologies to enhance overall productivity and efficiency. With the exponential growth of data, they need robust IT infrastructure and technical expertise to automate various tasks. Cloud ITSM solutions allow large enterprises to reduce infrastructure CAPEX and OPEX. These enterprises are expected to make substantial investments in implementing suitable cloud ITSM solutions, enabling them to optimize infrastructure costs, enhance business operations, and thrive in a highly competitive environment.

Asia Pacific (APAC) to grow at the highest CAGR during the forecast period
The demand for cloud IT Service Management (ITSM) solutions in the APAC region is increasing due to their affordability and enhanced agility. The adoption of advanced technologies in APAC is expected to drive substantial growth, creating better opportunities for service providers. The primary factors driving the significant uptake of cloud ITSM solutions in this region are improved business operations and reduced operational costs. However, the limited availability of technical expertise poses a challenge to the adoption of cloud management solutions and services. IBM, HPE, and Microsoft are among the key players operating in the APAC market.

The cloud ITSM market is dominated by companies such as ServiceNow (US), BMC Software (US), Cherwell Software (US), Broadcom (US), Ivanti (US), HPE (US), IBM (US), Axios Systems (US), Citrix Systems (US), Hornbill (UK), Microsoft (US), EasyVista (US), Micro Focus (UK), Atlassian (Australia), Alemba (UK), SysAid (Israel), Freshworks (US), LogMeIn (US), ManageEngine (US), Efecte (Finland), EZOfficeInventory (US), Mint Service Desk (Poland), Device42 (US), LeanIX (Germany), Aisera (US), ITSM (Australia), Electric (US), InfraSight Labs (Sweden), Symphony SummitAI (US), and ITarian (US). These vendors have a large customer base and strong geographic footprint along with organized distribution channels, which helps them to increase revenues.

This research report categorizes the Cloud ITSM market to forecast revenue and analyze trends in each of the following submarkets:
Based on the component:
Solutions
Services

Based on the solutions:
Service portfolio management
Configuration and change management
Service desk software
Operations and performance management
Dashboard, reporting, and analytics
Based on organization size:
Small and Medium-sized Enterprises (SMEs)
Large Enterprises

Based on verticals:
Banking, Financial Services, and Insurance (BFSI)
Telecommunications
IT and ITeS
Government and Public Sector
Retail and Consumer Goods
Manufacturing
Energy and Utilities
Media and Entertainment
Healthcare and Life Sciences
Others (education, travel and hospitality, and transportation and logistics)

Based on regions:
North America
US
Canada
Europe
UK
Germany
France
Rest of Europe
APAC
China
Japan
Australia
Rest of APAC
MEA
Saudi Arabia
UAE
South Africa
Rest of MEA
Latin America
Brazil
Mexico
Rest of Latin America

Recent Developments
In June 2020, ServiceNow announced its plans to expand its data center capacity in the UK and Ireland. The company is developing new data center facilities in two locations: Newport, UK, and Dublin, Ireland. This expansion aims to increase ServiceNow's presence in Europe and ensure the scalability of its cloud services.