The scale of single projects in major industries has been reduced.
However, in finance, manufacturing, public sector, distribution, etc.
Trend of increasing data-driven new projects


IDC Korea published a report on the outlook for the domestic IT service market on the 20th.

According to the report (Korea IT Services Forecast, 2019-2023), the domestic IT service market in 2019 is expected to grow by 3.3% compared to the previous year as digital technology-based digital transformation efforts expand across enterprises and structural changes in the IT service market become visible.

In the long term, market growth is expected to undergo adjustments as the downward trend in large-scale business continues due to the reduction in the scale of single projects emerging in major industries.

In particular, while the demand for managed cloud services in the managed services market is expected to increase due to the expansion of cloud adoption, the accelerating pace of transition is projected to lead to a correction in market growth trends.

IDC analyzes and forecasts the IT services market by classifying it into project-oriented, managed services, and support services.

In this report, IDC Korea predicted that structural changes in the market driven by demand for digital technology and cloud services would become visible in 2019.all.

The domestic IT service market in 2019 is expected to show slower growth than last year due to a decrease in overall project volume in major industries such as finance and the public sector.

However, as customer experience becomes increasingly important across businesses, the growing trend of new projects for data-driven business intelligence appears to be acting as a new growth engine in various industries, including finance, manufacturing, public sector, and retail.

Along with this, as demand for digital technology and cloud services increases, the domestic IT service market is expected to grow by 3.3% in 2019 compared to the previous year.

"The domestic IT service market is currently undergoing changes in various aspects based on the business challenge of digital transformation," said Kim Kyung-min, Senior Research Analyst at IDC Korea. "Business innovation based on digital technology has become key to securing corporate competitiveness."

He stated, “As companies absorb digital technology-based IT services in various forms to secure competitiveness, this is leading to a structural change in the overall IT service market,” adding, “Cloud computing is having a direct impact on this structural shift in the service market, and in response, operators will need to make strategic changes across all aspects, including service offerings and partnerships.”

In addition, according to the report, the acceleration of cloud adoption is expected to lead to a correction in long-term market growth trends.

In the long term, demand for professional services related to digital technologies that form the basis for realizing the Future Enterprise will increase in the domestic IT service market. In particular, the demand for cloud environments will expand rapidly, driven by factors such as deregulation in sectors like finance and the public sector.
However, while the volume of traditional managed services being replaced by the cloud and the volume of cloud-managed services are expected to offset each other for the time being, the acceleration of cloud adoption is expected to result in an insufficient offset, which is projected to act as a direct cause for the adjustment of long-term growth trends.

Therefore, the domestic IT service market is expected to record a compound annual growth rate (CAGR) of 2.1% over the next five years, reaching a market size of 9.7019 trillion won in 2023.