IT Outsourcing Market

Global IT Outsourcing Market Size (2024 to 2029)

The global IT outsourcing market is projected to reach USD 898.70 billion in 2024 and USD 1,326.61 billion by 2029, growing at a CAGR of 8.10% during the forecast period.

Current Scenario of the Global IT Outsourcing Market

Information Technology (IT) Outsourcing refers to the legal offering of specific functions or the provisioning of resources outside an organization for all or part of an IT function that does not require many skills. Companies outsource work because of short-term assistance or the cheapest rates on a single task. Outsourcing allows flexibility in staffing for an organization and allows them to bring in additional resources when needed and free them up when completed, thus meeting cyclical or seasonal demand. IT outsourcing is a business model in which information technology (IT) service providers provide IT services to companies. Computing is the application of computers to transmit, study, store, retrieve, and manipulate information or data, often in the context of companies or other companies. The IT service provider can be an external IT service provider or an internal IT organization. IT Outsourcing allows organizations to develop, manage, optimize, and access data and business processes. IT outsourcing also provides backup and data recovery services. This has resulted in higher productivity and lower operating costs for organizations.

MARKET DRIVERS

The global IT outsourcing market is promoted by the rise in the number of start-up companies and a surge in the implementation of various cutting-edge to create, test, manage, install, troubleshoot, and configure IT hardware and software in an organization regularly. In addition, the focus on developing efficient IT infrastructure and the growing demand for IT services, such as systems integration services and consulting services by organizations, are driving the market. Also, the growing need to support a virtualized IT ecosystem is a significant driver of the IT outsourcing market. Increased migration and digitization to the cloud framework are also fueling demand for IT outsourcing models worldwide.

In value terms, around 84.2% of subcontracting contracts came from the United States, followed by the United Kingdom with 5.2%. Spain and Australia are two crucial outsourcing markets.  Software development is among the most in-demand occupations and ranks at the top of the median income. These regions are the most faced with a lack of labor. As demand exceeds supply, available specialists have significantly increased the prices of their services. However, security and privacy concerns and increasing incidents of piracy in application-based services are some of the main factors restricting the market. Furthermore, the high cost of advanced infrastructure to manage IT services is hampering the market.

Impact of COVID-19 on the Global IT Outsourcing Market

The COVID-19 crisis is still unfolding. Different countries have taken different measures to respond, from ignoring the virus threat to announcing more or less complete blockades. Countries are now at different stages of the virus's spread; it is unknown if another wave of infections is coming. The current crisis is a new experience the world has seen so far. Almost every day, a new theory clarifies what seems to be happening and why one country is more affected than another. Due to the actions taken by most governments, it is clear that economies worldwide will go into a deep recession. There is also fear that as a side effect of the crisis, more people in less developed countries will starve to death from the virus.

REPORT COVERAGE

REGIONAL ANALYSIS 

The North American IT Outsourcing market is expected to grow at a high rate during the forecast period. This is mainly due to the presence of many technical experts and the growing demand for IT services among regional companies.  The Asia Pacific IT Outsourcing market is expected to expand significantly during the outlook period. The demand for IT outsourcing in the region is mainly driven by countries such as India, China, and Japan. In addition, technological advances, increasing globalization, and product escalation in developing countries in the region are expected to present exciting opportunities for the growth of the IT Outsourcing market in the Asia Pacific. The increasing complexity of IT companies' business processes also drives demand for IT services in the Asia Pacific.

KEY PLAYERS IN THE GLOBAL IT OUTSOURCING MARKET

The major companies operating in the global IT outsourcing market include BMC Software Inc., Hewlett Packard Enterprise Company, IBM Corporation, Red Hat Inc., VMware Inc., Accenture plc, Adaptive Computing Enterprises Inc., CA Technologies, Cisco Systems Inc., Citrix Systems Inc., CloudBolt Software Inc., Conviture Inc., CSC Computer Sciences Limited, Dell EMC, Egenera Inc., Embotics Corporation, GigaSpaces Technologies Inc., Micro Focus International plc.

RECENT HAPPENINGS IN THE GLOBAL IT OUTSOURCING MARKET

• In 2017, a German electric utility E. ON SE outsourced its network system to T-systems International GmbH and its office and data center operations to Hewlett Packard Enterprise Development LP. Several key industry companies, such as NTT Data and Capgemini, have implemented the models from multiple sources.
• In 2017, over 700 ITO contracts worth more than $ 130 billion and more than 150 BPO contracts worth more than $ 25 billion were signed worldwide.

DETAILED SEGMENTATION OF THE GLOBAL OUTSOURCING MARKET INCLUDED IN THIS REPORT

This research report on the global IT outsourcing market has been segmented and sub-segmented based on the service model, implementation, business size, industry, and region.

By-Service Model

• Software as a Service (SaaS)
• Platform as a Service (PaaS)
• Infrastructure as a Service (IaaS)

By Implementation

• Public
• Private
• Hybrid 

By Business Size

• Small and Medium
• Large

By Industry

• Banking, Financial Services, and Insurance (BFSI)
• IT & Telecommunications
• Retail
• Healthcare
• Energy and Public Services
• Others

By Region:

• North America
  • The United States
  • Canada
  • Rest of North America
• Europe
  • The United Kingdom
  • Spain
  • Germany
  • Italy
  • France
  • Rest of Europe
• The Asia Pacific
  • India
  • Japan
  • China
  • Australia
  • Singapore
  • Malaysia
  • South Korea
  • New Zealand
  • Southeast Asia
• Latin America
  • Brazil
  • Argentina
  • Mexico
  • Rest of LATAM
• The Middle East and Africa
  • Saudi Arabia
  • UAE
  • Lebanon
  • Jordan
  • Cyprus