System Integration Market Is Estimated To Witness High Growth Due To Rising Demand For IoT And Cloud Services
The System Integration Market is estimated to be valued at USD 392.12 Billion in 2024 and register a CAGR of 10.3% over the forecast period from 2024 to 2031. The growing adoption of IoT across various industries is driving the need for system integration services to develop interconnected systems and networks. Furthermore, the rising deployment of cloud-based applications is also fueling the market growth. Cloud services require sophisticated integration of various IT infrastructure components, networks, and applications, thereby augmenting the demand for system integration.
Market Dynamics:
The growing adoption of IoT and cloud services are the key drivers propelling the growth of the system integration market. IoT is enabling the connection of physical devices over the internet to collect and exchange data. This is driving the need for system integration services to develop unified IoT platforms and solutions. Additionally, more organizations are shifting toward cloud-based applications and infrastructure to gain scalability, agility, and cost benefits. This wide adoption of cloud creates the demand for efficient integration of cloud platforms with other IT systems. At the same time, the lack of skilled professionals with expertise in system integration poses a major challenge to market players. Various training and development programs are being introduced to develop requisite skillsets.
Market Drivers:
Growing Demand for Outsourced IT Services
The system integration market is seeing significant growth due to the increasing demand from organizations to outsource their IT infrastructure needs. Many companies lack the necessary in-house expertise and resources to design, implement, and manage complex IT systems. As a result, they are increasingly relying on system integrators who have dedicated teams of specialists to handle various aspects of IT including infrastructure setup, application integration, security, networking, and others. This is allowing businesses to focus on their core operations while leveraging the technical expertise of system integrators.
Rise of Cloud Computing is Fueling the Need for System Integration Services
Another major driver for the system integration market is the rising adoption of cloud computing. As more organizations migrate their workloads and applications to public, private, and hybrid cloud environments, they require the services of system integrators to facilitate a smooth transition. System integrators help in the evaluation, design, migration, and management of cloud infrastructure. They also integrate existing legacy systems with new cloud platforms. This is contributing significantly to the growing need for system integration capabilities. Their familiarity with various cloud vendors and platforms is proving invaluable for enterprises undergoing digital transformation initiatives centered around cloud adoption.
Market Restraints:
Shortage of Skilled Workforce acts as a Restraint on Market Growth
One challenge restricting faster growth of the system integration market is the shortage of skilled professionals with expertise in areas like cloud consulting, DevOps, security, data analytics, and artificial intelligence. As technology becomes more complex, the demand for specialists in niche domains is increasing rapidly. However, the supply of trained talent is struggling to keep pace. This is creating issues for system integrators in fully staffing large projects. It also drives up their employee costs due to higher turnover and retention challenges. Unless more training programs are introduced to close the skills gap, availability of technical expertise will remain a hindrance for the expansion of this industry.
Rising Security Threats are Causing Budgetary Concerns
With the increasing sophistication of cyber-attacks, data security has become a major issue for organizations globally. While integration of various systems introduces several benefits, it also expands the attack surface for hackers. As a result, companies are allocating more of their IT budget towards security measures, limiting funds available for strategic initiatives. This presents a challenge for system integrators trying to take on new projects focused around digital transformation goals. Tighter security requirements also mean system integration engagements now require advanced skills to mitigate vulnerabilities across multi-vendor infrastructures. All these factors contribute to rising project costs, acting as a budgetary restraint in this market.
Market Opportunities:
Growing Focus on IoT and Industry 4.0 Creates Opportunities
The rapid proliferation of IoT devices and technologies associated with Industry 4.0 is opening up new opportunities for system integrators. As industrial assets become 'smarter' through integration with IT systems, the need arises to design, deploy, and manage IIoT platforms seamlessly. This involves connecting operational systems with enterprise applications, cloud platforms, analytics tools, and others. System integrators are well-positioned to capitalize on this evolving space through their domain expertise in integrating heterogeneous environments. Their role in ensuring secure, reliable, and scalable IIoT infrastructure rollouts will become even more important going forward.
Surging Demand for Digital Transformation Projects Spurs Growth Prospects
Digital transformation initiatives across sectors are fueling the need for sophisticated system integration capabilities. As organizations invest heavily in technologies like AI, augmented reality, predictive analytics and mobile apps to create new revenue streams and optimize business processes, skilled partners are required to tie all these disparate systems together in a cohesive manner. System integrators play a pivotal role in envisioning, designing, and executing digital roadmaps through their end-to-end solutioning approach. Their full lifecycle services also help maximize returns from digital investments. This ongoing digital disruption provides abundant opportunities for system integrators to take on exciting new projects and accelerate their own growth trajectory.
Link - https://www.coherentmarketinsights.com/market-insight/system-integration-market-4392
Key Developments:
- In December 2023, MDS System Integration, part of the MDS Group, announced the acquisition of a majority stake in Smpl ID, a Middle East & Africa-based identity and access management (IAM) solution provider. This acquisition aims to enhance security capabilities and provide secure integration services for MDS's existing and potential clients in the MEA region.
- In October 2023, NeoDyne opened a new headquarters in Chesterfield, U.K., marking its growth and expansion. As a SolutionsPT partner and AVEVA Endorsed Systems Integrator, NeoDyne aims to leverage regional engineering talent to better serve its clients.
- In June 2023, GitLab has been named a focal partner in a strategic partnership with MDS System Integration Group. This collaboration aims to enhance GitLab client adoption and promote the benefits of a unified DevSecOps platform as MDS expands.
- In June 2023, Cisco introduced a new Security Service Edge (SSE) solution to provide seamless and secure access across various locations, devices, and applications. This service aims to improve productivity by streamlining access management and addressing inconsistent access experiences.
- In June 2023, IBM Corporation announced the acquisition of Apptio, a company specializing in financial and operational IT management and optimization software. This acquisition is intended to simplify and integrate visibility into technology spending across multi-cloud and hybrid-cloud environments, enhancing IBM’s IT automation capabilities.
- In April 2023, Microsoft Corporation announced a strategic collaboration with a software development company to integrate generative AI into healthcare. This partnership combines Microsoft’s Azure OpenAI Service with Epic’s advanced electronic health record software.
- In April 2023, IBM Corporation announced a strategic partnership with Riyadh Air, where IBM Consulting will serve as the lead systems integrator to support the design, development, and orchestration of technologies for Riyadh Air's digital operations.
Key Market Players:
Key companies covered as a part of this study include Accenture, Atos SE, Boomi, Capgemini, Cisco Systems, Inc., Cognizant, Deloitte Touche Tohmatsu Limited, HCL Technologies Limited, IBM Corporation, Infosys Limited, Livares Technologies Pvt Ltd., Mavenir, MDS SI, NEC Corporation, Oracle Corporation, Tata Consultancy Services Limited, Tech Mahindra Limited, and Wipro.
