Global Business Products and Services Industry Report

The global market for business products and services set record billion-dollar results in 2024, rising to its highest level since its previous peak of $26.4 billion in early 2022.

The market is expected to expand at a compound annual growth rate (CAGR) of 11.9% through 2030. 

The business services sector accounts for four of the 20 fastest-growing industries and is seeing a surge in demand for specialized skills such as management, scientific, and technical consulting services. As companies increasingly focus on optimizing costs, using consulting services for specific tasks rather than hiring full-time employees is a trend that is gaining momentum.

Areas currently surging and seeing the most activity heading into 2025 include:

• Infrastructure-as-a-service (IaaS)
• Software-as-a-service (SaaS)
• Managed services 
• IT outsourcing (ITO)
• Business process outsourcing (BPO)

Recent interest rate cuts in the U.S. and Europe are expected to propel spending in these areas in 2025, in addition to the popularity of generative AI and other new technological advancements.

Market Segmentation

By type, the business services market is segmented into:

• Consulting
• Outsourcing
• Technology Services

By application, the market is segmented into:

• Finance
• Human Resources
• Marketing
• IT
• Legal

By Software:

• Finance
• Sales & Marketing
• Human Resource
• Supply Chain
• Others

By Service:

• Consulting
• Managed Services
• Support & Maintenance

By Deployment:

• Cloud
• On-premise

The right resources, the right process, the right buyer – the right time is now.

By End-use:

• Aerospace & Defense
• BFSI
• Government
• Healthcare
• IT & Telecom
• Manufacturing
• Retail
• Transportation
• Others

Key Market Trends & Drivers

The market's growth can be attributed to remote work adoption, sustainability, data analytics, and AI integration, increasing automation across end-use industries, regulatory and compliance changes, and supply chain resilience. Other significant business service trends include digital transformation, technological advancements, cybersecurity, customized business solutions, cloud-based services, blockchain, hybrid architecture, and outsourcing growth. Enterprise software and services across IT infrastructure are being adopted to drive better decision-making, lower inventory costs, improve profits, and boost business market positioning.

The overall state of the economy also plays a vital role in the growth of the business services sector. Businesses are more likely to invest in services that improve operations when the economy grows. During economic downturns, cost-saving services may be in higher demand.

The growing creation of new businesses is also expected to drive growth in the industry. Business support services provide a range of services for newly established businesses. 

The business services market includes outsourcing to offshore locations, contributing to market growth. Many businesses are choosing to outsource non-core functions to specialized service providers to cut costs and boost their focus on their core competencies. About 60% of companies outsource their non-core business operations.

The growing need for digital marketing and e-commerce is creating more demand for services related to online advertising, search engine optimization (SEO), website development, and e-commerce platform management.

Cybersecurity is also a major area of activity. Geopolitical tensions are playing out mo661.re in the realm of cyberspace, amplifying risks to consumers as well as critical infrastructure. Cybercrime has been projected to cost the world $10.5 trillion annually by 2025.

Recruiting, talent acquisition, training, and employee benefit services are all critical for companies in managing their workforces. As remote work and the gig economy evolve, the business services segment has been in higher demand for these human resources and talent management needs.

With growing global awareness of environmental and sustainability issues, there has been growth in services related to sustainability reporting, energy-efficiency consulting, and green supply-chain management.

Legal services have also been in demand as businesses look to protect their assets and navigate legal complexities, such as contract review, intellectual property protection, and compliance.

M&A

The 2024 Citizens M&A Outlook revealed that 43% of business services respondents indicate that sellers will have the advantage, the most prominent result of any sector surveyed. In the same study, private equity respondents reported the most opportunity in the business services and tech, media & telecom sectors, with business services poised for a strong M&A year as the rate environment becomes amenable.

The business services sector continues to make a compelling case for investment in 2024. Ongoing worker shortages in developed economies mean that companies with experienced and capable employees are being increasingly valued for their ability to enhance operational workflow and improve business efficiency. This makes service-centric models that deliver measurable value for clients’ desirable assets.

Through January 2024, the business services sector has raised $6.41 billion in equity funding across 13 rounds. In the same period last year (through January 2023), these companies raised $842 million across 144 rounds. Therefore, 2024 saw a 661.44% rise in funding in business services companies over 2023.

There is an ongoing need for more cybersecurity due to increased data breaches, newer mobile technologies, and custom programming services. This need will increase actual output in the business services sector and create opportunities for M&A strategies.

As businesses expand globally, they need services related to international market entry, cross-border transactions, trade, and international marketing. This is leading to growth in the global business services space.

Our Recent Success Stories in the Sector

Some of Benchmark International’s more recent successful deals in the business products and services space include:

• The sale of Plant Drives & Systems to AES, Inc.
• The acquisition of Label Express Limited by Lynx Private Equity
• The deal between Fulfill Plus, Inc. and private buyers
• The sale of Scapes Group, LLC by Charter Vista Landscaping, LLC
• The purchase of The Romack Group by Excel Management Systems, Inc.
• The transaction between Signcraft Solutions, LLC, and two individual buyers
• The sale of Robertson Lowstuter, Inc. to The Center for Sales Strategy
• The purchase of Rubline Marketing, LLC by CorePHP, LLC
• The deal between Awnclean U.S.A., Inc. and The Valcourt Group
• The transaction between Monarch Title and The Walker Agency
• The sale of Digital Prism Advisors, Inc. to Mod Op
• The buyout of SRM Group, Inc. by a high-net-worth individual
• The sale of Corptemps, Inc. to an undisclosed buyer
• The transaction between C4 Laboratores, LLC and the Riverside Company
• The sale of Inspirant Group, Inc. to 10Pearls
• The purchase of Integrity Arts & Technology, Inc. by the Swagger Agency
• The deal between Premier Lawn Service, Inc. and Monarch Landscaping Companies

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