ITOps market poised for double-digit growth as AI reshapes industry, Raymond James By Investing.com

Investing.com — The IT Operations (ITOps) market, once viewed as a cost center confined to back-office functions, is experiencing a profound transformation driven by artificial intelligence and automation, according to note by Raymond (NS:) James.

The firm estimates the sector will expand to $125 billion by 2028, growing at a compound annual rate of 13% from $80 billion in 2024.

Raymond James highlights the shift in ITOps’ role from back-office support to a critical business driver, with platforms such as ServiceNow (NYSE:) gaining prominence among C-suite executives for streamlining operations and enabling differentiation. The increased reliance on AI to automate redundant tasks and optimize workflows has positioned the sector for durable double-digit growth, attracting investor interest despite a challenging macroeconomic backdrop.

The report notes that valuation multiples for ITOps companies have declined, now trading 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 for significant shareholder value creation through a cycle of growth, profitability, and reinvestment.

The ITOps ecosystem encompasses several submarkets, including IT Service Management (ITSM), Health Performance and Analysis (HPA), and Artificial Intelligence for IT Operations (AIOps):

ITSM – Valued at over $7 billion, the ITSM market is expanding in the low- to mid-teens, driven by the consolidation of spending into core platforms and the integration of AI capabilities. ServiceNow, with nearly 50% market share, remains a leader, followed by competitors like Atlassian (NASDAQ:), leveraging its Jira ecosystem.

HPA – Estimated at $22 billion, this market 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 criticality of real-time performance monitoring are key growth drivers.

AIOps – At $2 billion, the AIOps segment is growing in the mid- to high-teens. By leveraging AI to analyze vast amounts of IT data, this technology enhances decision-making and expedites problem resolution. Raymond James anticipates AIOps will increasingly integrate with ITSM platforms.