The landscape of IT Operations (ITOps) has shifted dramatically from merely serving as a cost center to becoming a pivotal element of overall business strategy. This transformation is largely attributed to advancements in artificial intelligence (AI) and automation, reflective of broader technological trends that are reshaping how organizations operate. A report from Raymond James projects that the ITOps market is poised for substantial growth, expected to reach $125 billion by 2028, demonstrating a remarkable compound annual growth rate of 13% from $80 billion in 2024.
This growth trajectory underscores an evolving perception of ITOps from back-office functionalities into essential drivers of business performance. Platforms like ServiceNow have emerged as essential tools for C-suite executives, facilitating streamlined operations and establishing a competitive advantage in an increasingly complex market.
The integration of AI and automation technologies is no small factor in this industry’s evolution. Companies are increasingly leaning on these innovations to automate repetitive tasks and fine-tune workflows, reducing operational complexity and enhancing efficiency. As a result, investor interest in the sector has surged, even amidst challenging macroeconomic conditions that have affected various sectors.
Despite a decline in valuation multiples for ITOps firms, aligning them more closely with broader tech indices like the S&P 500, experts at Raymond James view this as an appealing moment for investors. Their analysis suggests a favorable environment for long-term growth and the potential for generating substantial shareholder value through stages of growth, profitability, and reinvestment.
The ITOps market is rich with various submarkets, each contributing to the sector’s overarching growth and development. Among these, IT Service Management (ITSM) holds a significant position. Currently valued at over $7 billion, the ITSM market is expanding in the low to mid-teens, driven predominantly by the consolidation of expenses into core platforms while integrating AI capabilities. ServiceNow leads this space with close to 50% of market share, with key competitors like Atlassian utilizing their Jira ecosystem to carve out niche offerings.
Another important segment is Health Performance and Analysis (HPA), with an estimated valuation of $22 billion. This sector focuses on enhancing the performance of IT infrastructure and applications, capturing growth from submarkets like Application Performance Monitoring (APM) and observability. The industry is experiencing increased demand due to the migration to cloud-based systems and the growing requirement for real-time performance oversight.
Finally, the Artificial Intelligence for IT Operations (AIOps) segment, currently valued at around $2 billion, is also seeing mid to high-teens growth. AIOps utilizes AI to analyze extensive datasets related to IT operations, thereby enhancing decision-making processes and improving problem resolution speeds. Analysts from Raymond James predict that AIOps will increasingly intertwine with ITSM platforms, strengthening their collaborative potential and functional utility in the IT ecosystem.
The ongoing transformation within the ITOps market reflects broader shifts in technological adoption and operational efficiency. With AI and automation at the forefront of this evolution, the sector is not just adapting but thriving, making it an attractive proposition for investors. As organizations seek to optimize their operational capabilities, the role of ITOps as a central business driver is set to further solidify, pointing towards a promising future packed with opportunities for growth and innovation.