Application Outsourcing - G7 | Statista Market Forecast

Revenue in the Application Outsourcing market is projected to reach US$76.65bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 0.71%, resulting in a market volume of US$79.40bn by 2029.
The average Spend per Employee in the Application Outsourcing market is projected to reach US$190.30 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.

For more information on the data displayed, use the info button right next to the boxes.

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

The Application Outsourcing market in G7 countries is a dynamic and ever-evolving market. As businesses continue to digitize their operations, the demand for application outsourcing services has increased significantly. In this write-up, we will explore the trends and developments in the Application Outsourcing market in G7 countries.

Customer preferences: Businesses in G7 countries are increasingly looking to outsource their application development and maintenance services to third-party vendors. This is mainly driven by the need to reduce costs, improve efficiency, and focus on their core competencies. Additionally, businesses are also looking for vendors that can provide flexible engagement models, agile development methodologies, and expertise in emerging technologies such as cloud computing, artificial intelligence, and blockchain.

Trends in the market: In the United States, the Application Outsourcing market is witnessing a shift towards agile and DevOps methodologies. This is driven by the need for faster time-to-market, better quality, and improved collaboration between development and operations teams. Additionally, there is a growing demand for cloud-native application development and migration services.In the United Kingdom, Brexit has created uncertainty in the market, leading to a slowdown in demand for application outsourcing services. However, businesses are still looking for vendors that can provide cost-effective services and expertise in emerging technologies such as automation and analytics.In Germany, the Application Outsourcing market is witnessing a shift towards digital transformation services. Businesses are looking for vendors that can provide end-to-end services, from strategy consulting to application development and maintenance. Additionally, there is a growing demand for cybersecurity and data privacy services.In France, the Application Outsourcing market is witnessing a shift towards outcome-based pricing models. Businesses are looking for vendors that can provide services that are aligned with their business objectives and can deliver measurable outcomes. Additionally, there is a growing demand for mobile application development and testing services.In Italy, the Application Outsourcing market is witnessing a shift towards industry-specific solutions. Businesses are looking for vendors that can provide services that are tailored to their industry needs, such as healthcare, finance, and retail. Additionally, there is a growing demand for application modernization and legacy system migration services.In Japan, the Application Outsourcing market is witnessing a shift towards automation and artificial intelligence. Businesses are looking for vendors that can provide services that can help them automate their business processes and improve efficiency. Additionally, there is a growing demand for cloud migration and application management services.In Canada, the Application Outsourcing market is witnessing a shift towards nearshore outsourcing. Businesses are looking for vendors that can provide services that are geographically closer to them, such as in South America and the Caribbean. Additionally, there is a growing demand for digital transformation and customer experience services.

Local special circumstances: Each G7 country has its own unique set of circumstances that affect the Application Outsourcing market. For example, Brexit has created uncertainty in the UK market, while the aging population in Japan has created a demand for healthcare applications. Additionally, the COVID-19 pandemic has accelerated the adoption of digital technologies in all G7 countries, leading to an increased demand for application outsourcing services.

Underlying macroeconomic factors: The Application Outsourcing market in G7 countries is influenced by several macroeconomic factors, such as GDP growth, inflation, and unemployment rates. Additionally, government policies such as tax incentives and regulations also play a role in shaping the market. For example, the US government's restrictions on H-1B visas have led to a shortage of skilled IT workers, which has affected the Application Outsourcing market.

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.