IT Outsourcing - Americas

Americas

Revenue in the IT Outsourcing market is projected to reach US$227.00bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.13%, resulting in a market volume of US$335.60bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$450.30 in 2024.
In global comparison, most revenue will be generated in the United States (US$197.30bn in 2024).

Key regions: Netherlands, United States, Japan, Germany, Italy

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

The IT Outsourcing market in Americas has been experiencing significant growth in recent years, driven by various factors such as cost savings, access to skilled talent, and the need for digital transformation.

Customer preferences: Customers in the Americas are increasingly turning to IT outsourcing services as a means of reducing costs and accessing specialized skills. With the rising demand for digital transformation, businesses are seeking to partner with outsourcing providers that can help them implement new technologies and stay ahead of the competition. Additionally, customers are placing greater emphasis on data security and privacy, which has led to an increase in demand for outsourcing providers that can offer robust security solutions.

Trends in the market: The IT Outsourcing market in the Americas is marked by a number of trends that are shaping the industry. One of the key trends is the rise of nearshoring, which involves outsourcing services to countries that are geographically closer to the customer's home country. This trend has emerged as a result of the need for faster turnaround times and more effective communication between outsourcing providers and their clients. Another trend is the growing popularity of cloud-based outsourcing services, which offer greater flexibility and scalability compared to traditional outsourcing models. Finally, there is a trend towards greater specialization, with outsourcing providers focusing on specific areas such as cybersecurity, data analytics, and software development.

Local special circumstances: The IT Outsourcing market in the Americas is highly diverse, with different countries and regions experiencing unique circumstances. For example, in the United States, the market is driven by the need for cost savings and access to skilled talent, particularly in the areas of software development and IT infrastructure. In Canada, the market is characterized by a focus on nearshoring, with businesses outsourcing services to countries such as Mexico and Costa Rica. In Latin America, the market is driven by a combination of factors, including cost savings, access to specialized skills, and the need for digital transformation.

Underlying macroeconomic factors: The growth of the IT Outsourcing market in the Americas is underpinned by a range of macroeconomic factors, including the increasing adoption of digital technologies, the rising cost of labor in developed countries, and the need for greater efficiency and productivity. Additionally, the growth of the outsourcing market is being driven by changing demographics, with a growing number of young, tech-savvy professionals entering the workforce. Finally, the political and economic stability of the region is also an important factor, with businesses seeking to partner with outsourcing providers that operate in stable and secure environments.

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.