Amazon Web Services (AWS) is now the UK’s top provider of software and IT services according to data from analyst TechMarketView (TMV).

Figures from 2022 show that the UK IT services sector grew by £67.7 billion in the 12 months of 2022, an increase of 12.2% and the fastest rate in over a decade.

AWS alone grew year-on-year UK revenues by 30.1% to £3.78 billion compared to 2021 where growth was 35.5%.

The second place IT service provider was consultancy firm Accenture, followed by TCS, the former market leader, in fourth place. This means that Microsoft has now slipped out of the top 3 and into fourth position. In fifth is Capgemini followed by Capita.

Looking at AWS versus Microsoft in particular, Amazon Web Services is growing and scaling particularly fast against its fiercest rival. In fact, according to TMV’s data, AWS outpaces Microsoft Azure.

IT Services Growth in 2023

Since the Autumn of 2022 a number of factors have started to feed into the IT services sector. Record inflation, increased interest rates, and uncertainty stemming from the war in Ukraine have all caused firms to be more conservative with their IT spend.

Yet at the same time, cyberthreats continue to grow and businesses should be ever more vigilant and continue to invest in cybersecurity.

With the limiting factors in mind, TMV predicts that software and IT services spending will continue to grow in 2023 but at a more sedate pace. However, the analysis did flag up an “ongoing productivity crisis” in the UK and that this was driving British businesses to continue investing to stay competitive.

Speaking to The Register, Georgina O’Toole, chief analyst at TMV told the IT news website;

“The UK tech industry has a big role to play in improving the UK productivity picture,”

She continued:

“With the right investment, it is perfectly placed to improve the productivity of its clients’ organisations, as well as supporting the productivity of the UK more generally.”

Urging UK organisations to analyse the productivity and inflationary pressure conundrum, O’Toole added:

“Our analysis suggests that current challenges, and the potential opportunities for technology to help address them, will continue to push strong demand in the UK software and IT services market – albeit at a more measured pace – over the forecast window.”

With demand for cloud services and infrastructure being driven by business best practice and innovation from demand in AI-powered tools, the IT services sector continues to be an exciting place for UK firms in the year ahead.