Application Outsourcing - Worldwide

Revenue in the Application Outsourcing market is projected to reach US$118.10bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 0.98%, resulting in a market volume of US$124.10bn by 2029.
The average Spend per Employee in the Application Outsourcing market is projected to reach US$33.18 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

The demand for Application Outsourcing services has been increasing worldwide, driven by the need for cost optimization, focus on core competencies, and digital transformation initiatives.

Customer preferences: Customers are increasingly looking for reliable and efficient Application Outsourcing services that can help them optimize their IT costs without compromising quality. They also prefer providers who can offer flexible engagement models, agile methodologies, and innovative solutions to help them stay ahead of the competition.

Trends in the market: In North America, the Application Outsourcing market is driven by the need for digital transformation, cloud adoption, and automation. The United States is the largest market in the region, followed by Canada and Mexico. The market is highly competitive, with several large players dominating the landscape.In Europe, the Application Outsourcing market is driven by the increasing adoption of cloud-based services, big data analytics, and the Internet of Things (IoT). The United Kingdom, Germany, and France are the largest markets in the region, with several local and global players competing for market share.In Asia-Pacific, the Application Outsourcing market is driven by the increasing demand for digital services, mobile applications, and e-commerce. China, India, and Japan are the largest markets in the region, with several local and global players offering a wide range of services to meet the diverse needs of customers.

Local special circumstances: In Latin America, the Application Outsourcing market is driven by the increasing adoption of cloud-based services, big data analytics, and artificial intelligence. Brazil and Mexico are the largest markets in the region, with several local and global players competing for market share. However, political instability, economic uncertainty, and regulatory challenges pose significant risks for businesses operating in the region.In the Middle East and Africa, the Application Outsourcing market is driven by the increasing demand for digital services, mobile applications, and cybersecurity. The United Arab Emirates, Saudi Arabia, and South Africa are the largest markets in the region, with several local and global players offering a wide range of services to meet the diverse needs of customers. However, geopolitical tensions, security risks, and economic volatility pose significant challenges for businesses operating in the region.

Underlying macroeconomic factors: The Application Outsourcing market is expected to continue growing in the coming years, driven by the increasing demand for digital services, cloud-based solutions, and automation. However, geopolitical tensions, economic volatility, and regulatory challenges pose significant risks for businesses operating in the market. To succeed in this competitive landscape, businesses need to stay agile, innovative, and customer-centric, and be able to offer a wide range of services to meet the diverse needs of customers.

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.