Alloy logo

February 09, 2023

Anna Ruth Williams



The most recent Gartner forecast predicts enterprise spending on IT services and consulting will increase 5.5% and 6.5% this year, respectively. This outpaces overall IT spending expectations by more than 3%. 

So, what’s behind the growing global demand for cloud consultancies, cybersecurity services, MSPs and the like? Here are three drivers:

1. Offsetting the IT Skills Shortage

In the UK, 95% of employers seeking tech talent say they’ve faced a skills shortage over the past 12 months. And this problem is only expected to worsen. The U.S. Labor Department estimates that the global shortage of software engineers may reach 85.2 million by 2030. While a majority of CIOs want to hire technical talent internally, they simply can’t - giving them no choice but to supplement via engagements with IT services firms.

2. Accelerating Digital Transformation

Post-COVID, the top drivers of cloud spending have consistently been compliance, cybersecurity, and the increasing scale of managed services required to support digital transformation initiatives. 

While those budget priorities have remained solid for several years, the pressure to quickly deliver IT modernization projects has mounted. As a result, enterprises are still forging ahead with the technical consulting needed to bring digitization projects to reality - despite a looming recession. The only difference is Gartner anticipates these deals will likely be smaller engagements, versus multi-year contracts. As cloud services investment firm Tercera’s CEO Chris Barbin told TechTarget, "I think the mega projects are getting chunked up. There is more of a premium on quicker, accelerated transformations.

3. Solving Multi-cloud Challenges

Driven by the future of remote work, the growing volume of XaaS providers, and more, enterprises are increasingly moving to hybrid, multi-cloud environments. These networks present technical and operational complexities that require additional expertise and management from - you guessed it - IT service providers.

Alloy client 66degrees announced its
acquisition of Pandera in late 2022.

IT Services Firms Get Serious About Marketing 

Not only is there increased appetite from CIOs for IT services, but the firms themselves are hungry for more robust offerings. 2022 saw a plethora of M&As from cloud services providers like Capgemini, Cognizant, and 66degrees as they look to deepen capabilities and talent. And this private market activity isn’t slowing down. In the first month of 2023, tech consultancies including Aptum Group, Thirdera, and Logically all announced acquisitions.

Simply put, we’re seeing larger, well-funded players aggressively going after bigger and bigger market opportunities. As a result, marketing leaders at IT services and consulting firms must double down on competitive differentiation. The shops that can clearly articulate their expertise, value, and ability to deliver will stand out from the crowd. At Alloy, we know the right mix of marketing communications needed to differentiate offerings and capture the attention of technical personas. If your IT services firm is ready to accelerate brand awareness and lead generation, let’s talk.