IT services companies play a crucial role in the modern business landscape by helping clients implement and optimize complex technologies, bridging gaps in technical workforces, and acting as essential intermediaries between tech creators and end users. In 2024, total spending in global IT services surpassed $1.5 trillion, and the market is projected to grow by nearly 10 percent in 2025.1 This increase in value is relevant for companies of all sizes: Large enterprises often need external partners to supplement in-house talent with niche expertise or navigate legacy technologies. Small- and medium-size businesses typically rely on third-party providers because of limited access to IT talent.
Around the time of the COVID-19 pandemic, private equity (PE) investors significantly expanded their focus on IT services in Europe, primarily in response to an increased reliance on digital infrastructure. Despite the sector’s rapid expansion in the following years, some PE investors remain hesitant. IT services can fall into an awkward space—not “techy” enough for software-focused investment teams but too technical for investors in traditional business services. Concerns also persist over the feasibility of business models, the scalability of service-based operations, and the potential threat of disintermediation by technology vendors, in addition to concerns about the risks inherent to investing in ever-changing tech trends.
To read the full article, download the PDF here.
