IT Services Market Overview
- The global IT Services market is estimated at $1.7 trillion in 2026 and is projected to grow at a CAGR of 8.8%, reaching $2.5 trillion by 2031. IT outsourcing remains the largest segment of the IT services market accounting for 28% of revenue in 2025. The U.S. continues to dominate globally, growth is being driven by enterprise investment in complex, next-generation technology stacks rather than traditional labor-based services.
- Despite macroeconomic uncertainty, M&A activity in IT services has remained resilient, supported by strong revenue visibility and a reacceleration of large deals. Buyer focus has concentrated heavily on data, AI, and cloud-led capabilities, which now account for a significant share of transactions. Both strategic and private equity buyers remain active, with increasing emphasis on ecosystem alignment, scalable delivery models, and assets that provide differentiated technical capabilities.
Source(s): Pitchbook, Mordor Intelligence, EY
(1) Pitchbook Screen Criteria: IT Services (Industry); All M&A/Control Transactions + All Buyout Types
Key Trends
FinOps and AI Cost Governance
The rapid deployment of AI models is creating new complexity around compute infrastructure management, resource allocation, and cost control.
Outcome-Based Pricing
Automation is reducing labor needs, pushing IT services contracts away from traditional hourly billing and toward outcome-based pricing.
IT Services Platforms
IT services are shifting from custom consulting engagements to standardized platforms that deliver services repeatedly across clients.
Managed Security Services Provider (MSSP) Market Overview
- Managed Security Services Providers (MSSPs) is the fastest growing cybersecurity segment, as organizations increasingly outsource SOC, MDR and endpoint protection to specialized MSSPs. This shift is driven by increasing threat sophistication and the need for continuous monitoring across complex IT environments.
- Growth is supported by rising threat complexity, internal talent constraints and the need for 24/7 monitoring, driving demand for recurring, outsourced security solutions.
Source(s): MarketsandMarkets, Mordor Intelligence
MSSP Market Dynamics
$67B MSSP market size by 2030
11% CAGR (2025-2030)
39% North America revenue share (largest globally)
$8,900 Avg. monthly recurring revenue per MSSP security client
2x Security client revenue vs. traditional IT client
37% Faster threat detection for AI-enabled MSSPs
Key MSSP Service Categories Driving Growth
SOCaaS / MDR / MxDR
24/7 threat detection and response – most in-demand service line. SOCaaS is a core Catalisto / Loki Labs offering.
Virtual CISO
Security leadership without FTE overhead. Growing demand from SMBs without internal security teams.
Cloud Security (CASB, CSPM)
Cloud-native managed security for multi-cloud environments. 15.9% CAGR through 2030.
Compliance & GRC
CMMC, HIPAA, SOC 2, ISO 27001 readiness services. Catalisto’s advisory strength.
Cybersecurity M&A Landscape
- Cybersecurity M&A remains highly active despite macro uncertainty, driven by strong enterprise demand for AI, data and cloud enabled security capabilities. Strategic buyers continue to view cybersecurity as core infrastructure, while private equity remains active in consolidating fragmented service providers.
- Activity is led by MSSP consolidation and PE driven roll ups, with scaled, recurring revenue platforms attracting premium valuations and increasing strategic buyer participation.
Source(s): SecurityWeek
2025 Headline Metrics
426 Total cybersecurity M&A deals announced in 2025
$93B Total disclosed deal value (+82% YoY)
125 MSSP deals (up from 119 in 2024)
11 Deals exceeding $1B in enterprise value
82 GRC deals – five-year peak (was 68 in 2024)
$21B VC funding across 820 deals (+52% YoY)
Defining M&A Trends
PE-Driven MSP/MSSP Roll-Ups
Private equity accounts for 60%+ of MSP/MSSP transactions. PE-backed platforms (Blue Mantis, Markon, Sparq) executing serial tuck-in strategies. Premium valuations — up to ~20x EBITDA for scaled, recurring-revenue platforms. $1.6T+ in global dry powder fueling continued activity.
Strategic Consolidation
Non-cyber acquirers (Google/Wiz $32B, Mastercard/Recorded Future $2.65B, ServiceNow/Armis $7.7B) treating cybersecurity as core infrastructure. Security services category was most active sector at 125 deals in 2025. Cross-border transactions represent 40% of all M&A activity.