The global software & services industry grew by 4.6% in 2012 to reach a value of $2,596 billion. The compound annual growth rate (CAGR) of the industry in the period 2008-12 was 4.8%. In 2017, the global software & services industry is forecast to have a value of $3,223.4 billion with an anticipated CAGR of 4.4% for the five-year period 2012 - 2017. Information Technology (IT) services are the largest segment of the global software & services industry, accounting for 48.3% of the industry's total value. Americas account for 36.2% of the global software & services industry. IBM is the leading player in the global software & services industry, generating a 3.5% share of the industry's value. This industry group is fragmented, with large incumbents operating alongside smaller companies, although diverse product portfolios and strong growth help to alleviate rivalry slightly. 1 This paper attempts to trace the evolution of IT services industry, its current state, its challenges, mitigation of those challenges and a sneak peek at what the future has in store for this rapidly evolving area. The paper briefly discusses about the evolution of computing as a whole, the evolution of the graphical user interface, client-server architecture, and evolution of the internet, the current state of the IT industry and future prospects and outlook. It also touches upon several existing opportunities and challenges within this industry sector and space. New dimension segments such as Cloud, Big Data, Mobility and In Memory Computing are exciting new areas of research and development that have the capability to further revolutionize the industry. The study is rounded off by discussing challenges that exist within this sector and its future outlook. The study is purely literature review based and is exploratory in nature. Reference materials include Journals, Government and analyst reports, white papers and web repositories.