Investing.com – The IT operations (ITOps) market, once seen as a cost center limited to back-office functions, is undergoing a profound transformation driven by artificial intelligence and automation, according to a note by Raymond (NS:) James.
The company estimates that the sector will expand to $125 billion by 2028, at a compound annual growth rate of 13% from $80 billion in 2024.
Raymond James highlights the shift in the role of ITOps from back-office support to a critical business driver, with platforms like ServiceNow (NYSE:) gaining prominence among C-suite executives to streamline processes and enable differentiation. The increasing reliance on artificial intelligence to automate redundant tasks and improve workflow has enabled the sector to achieve sustained double-digit growth, attracting investor interest despite the challenging macroeconomic backdrop.
The report notes that valuation multiples for ITOps companies have declined, and they now trade in line with broader technology indices, such as the Technology Select Sector SPDR Fund (XLK). However, Raymond James sees this as an attractive entry point for investors, emphasizing the potential to create significant shareholder value through a cycle of growth, profitability and reinvestment.
The ITOps ecosystem includes several submarkets, including IT Service Management (ITSM), Health Performance and Analysis (HPA), and Artificial Intelligence for IT Operations (AIOps):
IT Services – The IT Services Market (ITSM) is worth more than $7 billion and is expanding in the low- to mid-market segment, driven by consolidation of spending in core platforms and integration of AI capabilities. ServiceNow, with a market share of nearly 50%, remains the leader, followed by competitors like Atlassian (NASDAQ:), leveraging its Jira ecosystem.
HPA – This market, valued at $22 billion, supports the performance of IT infrastructure and applications, with submarkets such as application performance monitoring (APM) and observability showing high growth. Organizations' shift to cloud-based systems and the importance of real-time performance monitoring are key growth drivers.
AIOps – At $2 billion, the AIOps sector is growing in the mid- to upper teens. By leveraging artificial intelligence to analyze massive amounts of IT data, this technology improves decision-making and accelerates problem solving. Raymond James predicts that AIOps will increasingly integrate with ITSM platforms.
