IT Outsourcing - ASEAN

ASEAN

Revenue in the IT Outsourcing market is projected to reach US$11.34bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 10.04%, resulting in a market volume of US$18.30bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$32.71 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 ASEAN has been steadily growing over the past few years.

Customer preferences: Customers in ASEAN countries are increasingly seeking IT outsourcing services due to the cost savings and access to specialized expertise that outsourcing provides. Many companies in the region lack the resources and expertise to handle complex IT tasks in-house, making outsourcing an attractive option. Additionally, the COVID-19 pandemic has accelerated the adoption of remote work and digitalization, further driving demand for IT outsourcing services.

Trends in the market: The IT outsourcing market in ASEAN is experiencing several trends. One is the increasing popularity of cloud computing services, which enable companies to access powerful computing resources without the need for expensive hardware and software. Another trend is the growing demand for cybersecurity services, as companies seek to protect their data and systems from cyber threats. Finally, there is a trend towards greater specialization in IT outsourcing services, with companies seeking providers that can offer highly specialized expertise in areas such as artificial intelligence, blockchain, and the Internet of Things.

Local special circumstances: Each ASEAN country has its own unique circumstances that are shaping the IT outsourcing market. For example, in Singapore, the government has been actively promoting the development of the country's IT industry, which has helped to attract IT outsourcing providers and customers. In the Philippines, the IT outsourcing industry is a major employer, providing jobs to hundreds of thousands of people. In Vietnam, the government has been investing heavily in infrastructure and education to support the development of the IT industry.

Underlying macroeconomic factors: Several macroeconomic factors are contributing to the growth of the IT outsourcing market in ASEAN. One is the region's large and growing population, which provides a large pool of talent for IT outsourcing providers. Another is the region's relatively low labor costs, which make outsourcing an attractive option for companies looking to reduce costs. Finally, the region's growing middle class is driving demand for digital services, creating opportunities for IT outsourcing providers to serve this market.

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.