In 2025, Japan’s IT market is projected to grow steadily, showing an 8.2% increase year-on-year.
The ongoing push for digital transformation (DX), regulatory compliance, and the growing adoption of IT among small and mid-sized enterprises are driving this expansion. Cloud services and SaaS are also rapidly gaining traction.

One of the key developments fueling this momentum is the modernization of legacy systems, which is enabling business innovation. IT investment has clearly evolved from a support function to a core driver of corporate growth.

In this article, we explore the connection between the expanding IT market and the rise of DX-driven strategies.

What Does an 8.2% Increase in IT Investment Really Mean?

Digital technologies become the core of corporate strategy

Japan’s IT market is forecast to reach ¥26.6412 trillion in 2025, up 8.2% from the previous year
(Source: iMagazine).

According to IDC Japan, the market is expected to grow at a compound annual growth rate (CAGR) of 6.3% from 2023 to 2028, surpassing ¥30 trillion by 2028 (Source: IDC Japan).
 

This growth is not driven by temporary factors. Rather, it is the result of widespread digital integration across all business operations.

Organizations of all sizes and industries are now placing IT investment at the center of their business strategy, with a strong focus on enhancing competitiveness and productivity.

Cloud & SaaS Accelerate DX with Affordable, Scalable Solutions

One of the key enablers of this digital shift has been changes in regulatory frameworks.

The invoice system introduced in 2023 and the revised Electronic Book Storage Act fully enforced in 2024 have prompted many companies to accelerate digitization.

Of particular interest is the growing adoption among small and mid-sized enterprises (SMEs).

Once hesitant about IT investment, these businesses are now finding it easier to adopt digital tools, thanks to the affordability and flexibility of cloud-based services and SaaS.

With low-cost subscription models, more companies are streamlining back-office operations and improving customer experience—all without massive upfront investments.

The Road Ahead: Modernizing Legacy Systems & Integrating Siloed Operations

Among large enterprises, there is a clear trend toward revisiting and modernizing legacy systems.

Outdated IT infrastructures often hinder DX efforts and require bold, strategic overhauls.

One major focus is the integration of fragmented systems across departments.

This is more than just an efficiency play—it enables the creation of new business models and enhanced service quality.

Looking ahead to 2025 and beyond, IT investment will no longer be seen merely as a cost of doing business, but as a strategic lever for driving future revenue.