Demand for Cloud Hosting Expected to Lift IT Service Revenues


Cleveland, January 19, 2017 — Revenues for the US information technology (IT) services industry are forecast to rise 5.9% annually to 2020. Faster growth is expected for the leading infrastructure provisioning and management (IP&M) segment, driven by expanding demand for hosting services as companies continue to move processes to the cloud.

IP&M providers benefit from economies of scale. For example, cloud and virtualization technologies enable them to share capital resources among pools of customers, ensuring a high utilization rate of available infrastructure to reduce competition. As a result, they may achieve a higher return on investment in hardware resources than what their customers can realize on their own. Furthermore, their scale affords them superior bargaining power with hardware vendors and other service providers. Despite these advantages, however, industries that handle sensitive customer data – such as banks, hospitals, and insurance providers – have been slow to adopt these systems due to liability concerns.

These and other key insights are featured in IT Services: United States, a report recently released by Freedonia Focus Reports, a division of The Freedonia Group. The report forecasts US IT service revenues in US dollars to 2020. Total revenue is segmented by service type in terms of:

  • infrastructure provisioning and management
  • custom applications
  • infrastructure design and development
  • technical consulting
  • technical support
  • training

US IT service revenues include income from all domestic locations primarily engaged in providing IT services.

To illustrate historical trends, total revenues and the various segments are provided in annual series from 2005 to 2015.

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About Freedonia Focus Reports

Each month, The Freedonia Group – a division of – publishes over 20 new or updated Freedonia Focus Reports, providing fresh, unbiased analysis on a wide variety of markets and industries. Published in 20-30 pages, Focus Report coverage ranges from raw materials to finished manufactured goods and related services such as freight and construction. Analysis is intended to guide the busy reader through pertinent topics in rapid succession, including:

  • total historical market size and industry output
  • segmentation by products and markets
  • identification of market drivers, constraints, and key indicators
  • segment-by-segment outlook in five-year forecasts
  • a survey of the supply base
  • suggested resources for further study.

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