Application Outsourcing - Estonia

Revenue in the Application Outsourcing market is projected to reach US$21.38m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 1.65%, resulting in a market volume of US$23.21m by 2029.
The average Spend per Employee in the Application Outsourcing market is projected to reach US$28.33 in 2024.
In global comparison, most revenue will be generated United States (US$42.86bn in 2024).

Definition :
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. Furthermore, it includes the development (production), support, and maintenance of such software products and services by contracted service providers.

Application outsourcing allows organizations to leverage specialized skills, accelerate development timelines, reduce costs, and ensure efficient management of their applications.

Additional Information:

The Application Outsourcing market comprises revenues, revenue change, average spend per employee, and a list of the key players in the market and their consolidated revenues. 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 NEC, Accenture, Capgemini, VMware, and Hewlett Packard Enterprise.

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Concept and design of software applications, such as IBM iX (IBM Interactive Experience), Tata Consultancy Services (TCS), and EPAM Systems
Development and maintenance of software products, such as Infosys, Wipro, and HCL Technologies
Requirement assessments, such as ThoughtWorks, Accenture, and Intellectsoft

Administration outsourcing, such as Conduent, Genpact, and ADP (Automatic Data Processing)
Web hosting, such as GoDaddy, Bluehost, and Amazon Web Services
Strategic Technology Planning, such as BCG (Boston Consulting Group), EY (Ernst & Young), and PwC (PricewaterhouseCoopers)
Support or maintenance for business-internal software products

Estonia, a small country in Northern Europe, has been experiencing a steady growth in the Application Outsourcing market in recent years.

Customer preferences: One of the reasons for this growth is the increasing demand for cost-efficient and high-quality IT services from businesses in Estonia. Many companies in the country have been outsourcing their application development and maintenance to third-party providers, allowing them to focus on their core competencies and reduce their operational costs. Additionally, the rise of digitalization has led to an increased need for software development and maintenance services in various industries, including finance, healthcare, and retail.

Trends in the market: Another trend in the Application Outsourcing market in Estonia is the growing popularity of nearshoring. Many businesses in Western Europe and Scandinavia are outsourcing their IT services to Estonia due to its proximity and cultural similarities. This has led to an increase in the number of foreign companies establishing their presence in Estonia, creating new job opportunities and contributing to the country's economy.

Local special circumstances: Estonia's small size and agile business environment have also contributed to the growth of the Application Outsourcing market. The country has a highly skilled workforce, with many professionals proficient in English, which makes it easier for foreign companies to communicate and collaborate with local service providers. Additionally, Estonia has a favorable business environment, with low taxes and a supportive government that encourages entrepreneurship and innovation.

Underlying macroeconomic factors: The growth of the Application Outsourcing market in Estonia is also influenced by macroeconomic factors, such as the country's GDP growth and its membership in the European Union. Estonia's GDP has been steadily increasing in recent years, which has led to a rise in disposable income and increased spending on IT services. Furthermore, Estonia's membership in the EU has made it easier for local companies to access the wider European market, which has led to increased demand for their services.In conclusion, the Application Outsourcing market in Estonia is experiencing steady growth due to increasing demand for cost-efficient and high-quality IT services, the rise of digitalization, the popularity of nearshoring, Estonia's small size and agile business environment, and underlying macroeconomic factors such as GDP growth and EU membership.

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.

This report presents a comprehensive analysis and additional information on the Technology market, in a PDF format.

Unseen yet omnipresent, Information Technology (IT) services are the invisible gears driving modern organizations. These services support business operations and digital transformation through outsourcing, managed services, security, data management, and cloud computing. By leveraging these services, companies enhance efficiency, reduce costs, and gain competitive advantages in a digital marketplace. Prominent cloud providers worldwide include Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud. In the managed services sector, Oracle, Accenture, and IBM are among the largest providers globally.