IT Services Industry Growth 2026: Revenue Up 3%, While Cloud Hosting Grew 20%

IT services industry growth slowed to a modest pace in 2026 while the businesses selling cloud capacity and software pulled away. Census Bureau survey data put revenue for computer systems design and related services, the industry that includes managed service providers, 3.2% above a year earlier in 2Q 2026. Data processing and hosting grew 20.4%.

The growth race across service industries

Year-over-year revenue change in 2Q 2026 for the service sectors in the Quarterly Services Survey and selected information and professional services industries. IT-related industries are in bold. Among the 65 four-digit industries in the survey, IT services ranks 48 by growth, below its own sector, professional, scientific, and technical services (+6.4%).

• Data processing, hosting, and related services 518

  +20.4%

• Software publishers 5112

  +15.0%

• Transportation and warehousing 48-49

  +12.3%

• Other services (except public administration) 81

  +12.2%

• Information 51

  +10.0%

• Legal services 5411

  +8.9%

• Finance and insurance 52

  +7.6%

• Health care and social assistance 62

  +7.6%

• Utilities 22

  +6.8%

• Arts, entertainment, and recreation 71

  +6.7%

• Real estate and rental and leasing 53

  +6.6%

• Professional, scientific, and technical services 54

  +6.4%

• Management, scientific, and technical consulting services 5416

  +5.2%

• Accounting, tax preparation, bookkeeping, and payroll services 5412

  +5.2%

• Architectural, engineering, and related services 5413

  +4.1%

• Computer systems design and related services 5415

  +3.2%

• Administrative and support and waste management and remediation services 56

  +2.9%

• Educational services 61

  +2.6%

• Telecommunications 517

  -1.8%

Not seasonally adjusted, employer firms, 2Q 2026 compared with 2Q 2025. 2Q 2026 estimates are preliminary.

Quarterly revenue for IT industries

Over the four quarters to 2Q 2026, NAICS 5415 firms earned about $773 billion. The hosting industry, at $460 billion, is smaller but growing about 6 times as fast. Telecommunications revenue shrank.

Government is the growing customer

Government customers paid NAICS 5415 firms $62.8 billion in 2Q 2026, 7.5% more than a year earlier. Revenue from all other customers, business and households combined, grew 1.3%. The Census Bureau does not publish the business figure on its own because it does not meet publication standards, so the two are shown together here.

What this means for MSPs

Client budgets are moving toward cloud platforms and software subscriptions faster than toward services. Providers that resell or manage that spend, through cloud cost management, licensing, and platform operations, sit on the faster-growing side of the line. Revenue for IT services firms as a whole grew 3.2% in a year, so growth for a typical provider has to come from taking share or moving up into cloud and security work rather than from a rising market.

Frequently asked questions

How fast is the IT services industry growing?

Revenue for computer systems design and related services (NAICS 5415), the Census industry that includes IT consultancies, integrators, and managed service providers, was $195.5 billion in 2Q 2026, up 3.2% from 2Q 2025, according to the Census Bureau Quarterly Services Survey.

How big is the IT services market in the US?

About $773 billion over the four quarters to 2Q 2026 for NAICS 5415 employer firms, not seasonally adjusted. Data processing and hosting added $460 billion and software publishers $673 billion.

Is cloud growing faster than IT services?

Yes. Data processing, hosting, and related services revenue grew 20.4% year over year in 2Q 2026, and software publishers 15.0%, against 3.2% for computer systems design and related services.

How much IT services revenue comes from government?

Government customers accounted for $62.8 billion, or 32%, of NAICS 5415 revenue in 2Q 2026, and that revenue grew 7.5% from a year earlier. Revenue from all other customers combined grew 1.3%.

Where does this data come from?

The U.S. Census Bureau Quarterly Services Survey, which estimates revenue for employer firms in selected service industries each quarter. The 2Q 2026 figures are preliminary.

Methodology

References

1. U.S. Census Bureau, Quarterly Services Survey. Accessed October 2026.
2. QSS current release tables. Accessed October 2026.