Executive Summary

• AI is a dual force – the fastest-growing IT services segment globally, but also a structural challenge to the traditional time-and-materials (T&M) billable-hour model
• Regulation (NIS2, DORA, EU AI Act, CRA) and sovereign cloud requirements convert cybersecurity and modernization into non-cyclical, mandatory transformation spend
• DACH M&A activity remains structurally elevated – strategic buyers now drive ~55% of deal volume, while PE platforms continue aggressive add-on programs
• Premium multiples accrue to platforms with talent density, recurring revenue, regulated-industry exposure and proven hyperscaler partnerships

IT Services Market Data & Insights Overview

What is driving IT services demand in 2026?

Five reinforcing structural drivers shape the cycle: 1. AI & intelligent automation, 2. security & regulation, 3. cloud transformation, 4. legacy modernization, and 5. the shift to managed services / outsourcing. Regulatory frameworks – NIS2, DORA, the EU AI Act and the Cyber Resilience Act (CRA) – make resilience mandatory and drive IAM/PAM, SOC/MDR, cloud security and GRC spend. Cloud migration is moving from “lift-and-shift” to cloud-native operations; sovereign cloud and auditability requirements increase the services intensity per project. Talent scarcity and demographic-driven knowledge loss accelerate outsourcing, expanding the recurring revenue pool for MSPs and managed cloud providers.

How fast are the European IT services segments growing through 2030?

Service Segment	2025	2030	CAGR
AI Integration Services	EUR 5bn	EUR 18bn	+29%
Legacy Modernization Services	EUR 7bn	EUR 16bn	+18%
Cloud Services	EUR 11bn	EUR 24bn	+17%
Managed Services	EUR 59bn	EUR 114bn	+14%
Cybersecurity Services	EUR 21bn	EUR 41bn	+14%
Managed Cybersecurity Services	EUR 17bn	EUR 29bn	+11%

Source: Carlsquare research; Grand View Research; Mordor Intelligence; Market Research Future; Future Market Insights.

How active is the DACH IT services M&A market?

Deal volumes for DACH-headquartered IT services companies peaked in 2022 but remain structurally elevated above pre-Covid levels. Strategic buyers now drive ~55% of total deal volume, while PE-backed platforms continue aggressive add-on programs across cloud, cybersecurity, MSP and digital engineering. Selected German IT services transactions in 2025 traded at a median EV/EBITDA of ~12x, with capability-rich and recurring-revenue-heavy assets commanding premiums.

What are buyers paying premium multiples for in 2026?

• Talent density & delivery depth
• Recurring revenue & customer stickiness
• Regulated-industry know-how
• Cloud partnerships & certifications
• Scalable delivery models

Which strategic M&A trends define 2025-2026?

• MSP consolidation
• Cloud & infrastructure as the “core layer” of the stack
• Security as a default bolt-on
• Capability / IP add-ons

How are listed IT services companies trading – and what does it mean for sellers?

• Listed IT services equities – Accenture, Tata Consultancy Services (TCS), Infosys, Cognizant, Wipro, Capgemini and CGI – have de-rated 20-50% over the last 12 months
• Multiple compression reflects investor concern around AI replaceability risk – not weakening structural demand
• Median NTM EV/EBITDA stands at ~8.2x for Large-Cap IT Services, 9.4x for Global Delivery / IT Outsourcers, 11.6x for Digital Transformation specialists, and 6.5-7.4x for VARs/VADs and System Houses
• Capital is rotating toward providers with recurring managed services, productized IP, regulated-sector exposure and proven AI delivery economics – the equity story matters more than ever

Carlsquare’s View

European IT services remain a structurally attractive M&A market. While public market sentiment has softened on AI-replaceability concerns, the underlying drivers – regulation, modernization, cloud, AI integration and managed services adoption – continue to convert into multi-year, mandatory enterprise spend.

Founders, management teams and PE sponsors with platforms that combine talent density, recurring revenue, regulated-industry exposure and credible AI delivery are well positioned to access premium multiples. The active buyer field – spanning international strategics, PE platforms and corporate IT acquirers – supports competitive transaction processes for well-prepared sellers in 2026.

Carlsquare is one of Europe’s most active M&A advisors in IT services, with 40+ sector experts across our DACH, Nordic, UK, French, Polish and North American offices. Recent transactions include:

• DBAG advised on its investment in MAIT Group
• Synova advised on its acquisition of Allgeier IT Services (AITS)
• Further selected Carlsquare IT services transactions are available in our Deal History