Market Insights Technology IT Services IT Outsourcing

Application Outsourcing - Malaysia

Malaysia

Revenue in the Application Outsourcing market is projected to reach US$0.41bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 2.77%, resulting in a market volume of US$0.47bn by 2029.
The average Spend per Employee in the Application Outsourcing market is projected to reach US$22.80 in 2024.
In global comparison, most revenue will be generated in the United States (US$42,860.00m in 2024).

Key regions: Brazil, Germany, United Kingdom, Netherlands, China

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Analyst Opinion

The demand for Application Outsourcing services in Malaysia has been increasing steadily over the past few years, driven by various factors such as cost savings, access to specialized skills, and the need for greater agility in software development.

Customer preferences: Malaysian companies are increasingly looking to outsource their application development and maintenance needs to third-party providers. This is driven by a desire to reduce costs and increase efficiency, as well as to access specialized skills and expertise that may not be available in-house. Many companies are also looking to leverage the latest technologies and development methodologies, such as Agile and DevOps, which require a high degree of expertise and experience.

Trends in the market: One of the key trends in the Malaysian Application Outsourcing market is the growing adoption of cloud-based services. This is driven by the need for greater flexibility and scalability, as well as the desire to reduce infrastructure costs. Another trend is the increasing focus on digital transformation, as companies look to leverage new technologies such as AI, IoT, and blockchain to drive innovation and improve customer experiences. Finally, there is a growing trend towards nearshore outsourcing, as companies look to work with providers that are closer to home, in order to reduce costs and improve communication.

Local special circumstances: Malaysia has a strong and growing IT sector, with a large pool of skilled professionals and a supportive government that is committed to promoting the growth of the industry. The country also enjoys a strategic location in the heart of Southeast Asia, with good connectivity to major markets in the region. These factors make Malaysia an attractive destination for outsourcing services, particularly for companies looking to access the Southeast Asian market.

Underlying macroeconomic factors: The Malaysian economy has been growing steadily over the past few years, driven by strong domestic demand and robust exports. This has created a favorable business environment for outsourcing services, as companies look to take advantage of the country's growing prosperity and expanding middle class. In addition, the government has been actively promoting the development of the IT sector, with initiatives such as the Digital Malaysia program, which aims to transform the country into a digital economy by 2020. These factors bode well for the continued growth of the Application Outsourcing market in Malaysia.

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.