IT Outsourcing - Algeria

Algeria

The IT Outsourcing market in Algeria is projected to reach a revenue of US$375.50m in 2024.
This represents a significant growth opportunity for the country.
The market is expected to grow at an annual growth rate (CAGR 2024-2029) of 7.48%, leading to a market volume of US$538.60m by 2029.
Furthermore, the average Spend per Employee in the IT Outsourcing market is projected to reach US$29.20 in 2024.
This indicates the potential for increased investment and productivity in the industry.
In global comparison, United States is anticipated to generate the highest revenue in the IT Outsourcing market, with an estimated amount of US$197.30bn in 2024.
This highlights the dominant position of the United States in this sector.
Algeria's IT outsourcing market is experiencing steady growth, driven by the country's expanding pool of skilled IT professionals.

Key regions: Brazil, Italy, United States, China, Germany

Definition:
The IT Outsourcing market refers to the external contracting of IT functions, services, or projects instead of relying on company-owned resources. By outsourcing IT tasks (e.g., to IT suppliers or software developers), enterprises are able to focus on their core functions and save internal resources and costs (e.g., office space, maintenance, and utilities). Thus, outsourcing teams becomes a viable cost resilience strategy in an environment where companies are looking to save money more than ever.

In an IT context, these activities include IT administration, IT application, and web hosting services. Non-IT-related outsourcing services are excluded.

Structure:

IT Outsourcing contains four distinct markets that are based on different services:

Administration Outsourcing refers to the market for services associated with the external sourcing of typical IT administration tasks such as hardware supply, setup, configuration, maintenance, security, and support.
Application Outsourcing refers to the market for all IT application services in a software production context, spanning from requirement assessments to concept and design of software applications.
Web Hosting includes all types of internet hosting services that allow companies or individuals to provide access to their web page via the World Wide Web.
Other IT Outsourcing refers to aggregated revenues of the types of IT outsourcing that are not specifically mentioned in the other IT Outsourcing markets, such as infrastructure outsourcing, network outsourcing, and managed services.

Additional Information:

The IT Outsourcing market comprises revenues, revenue change, average spend per employee, and revenues of the outsourcing types. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Accenture, Capgemini, NTT, and Hewlett Packard Enterprise.

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Market

Region

Region comparison

Currency

Analyst Opinion

IT outsourcing has become a significant trend in the Algerian market as the country is striving to develop its economy and reduce its dependence on oil and gas.

Customer preferences: Algerian companies are increasingly turning to IT outsourcing to reduce costs and improve efficiency. Many companies are looking for specialized IT services that are not available in-house. Additionally, the country's young and tech-savvy population is driving demand for innovative IT solutions.

Trends in the market: The IT outsourcing market in Algeria is witnessing a shift towards cloud-based services, as companies seek to reduce their IT infrastructure costs. Furthermore, there is a growing trend towards outsourcing non-core IT functions, such as software development and maintenance, to specialized service providers. The government is also promoting the development of the IT sector, which is expected to drive demand for IT outsourcing services.

Local special circumstances: Algeria's IT outsourcing market is relatively small compared to other countries in the region, such as Morocco and Tunisia. However, the country's strategic location and proximity to Europe make it an attractive destination for IT outsourcing. Additionally, the government's efforts to diversify the economy and promote the development of the IT sector are expected to boost the IT outsourcing market in the country.

Underlying macroeconomic factors: Algeria's economy is heavily dependent on oil and gas exports, which account for more than 90% of the country's export revenues. However, the decline in oil prices in recent years has led to a significant drop in government revenues, prompting the government to diversify the economy and reduce its dependence on oil and gas. The development of the IT sector is seen as a key driver of economic diversification, and the government has taken several measures to promote the sector, including tax incentives and the establishment of technology parks. This is expected to drive demand for IT outsourcing services in the country.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.