IT Outsourcing - Bulgaria

Bulgaria

Revenue in the IT Outsourcing market is projected to reach US$162.70m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.21%, resulting in a market volume of US$252.80m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$54.36 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

Bulgaria, a country located in Southeast Europe, has been experiencing a steady growth in its IT outsourcing market in recent years.

Customer preferences: The country has become an attractive destination for IT outsourcing due to its highly skilled and cost-effective workforce, as well as its favorable tax policies and business-friendly environment. Many companies from Western Europe and the United States have been outsourcing their IT projects to Bulgaria, particularly in the areas of software development, data analytics, and customer support.

Trends in the market: One of the key trends in the IT outsourcing market in Bulgaria is the increasing demand for nearshoring services. This means that companies are choosing to outsource their IT projects to nearby countries, such as Bulgaria, rather than to more distant locations like India or China. This trend is driven by factors such as time zone proximity, cultural similarities, and ease of communication.Another trend in the market is the growing popularity of cloud computing and digital transformation services. As more companies are looking to modernize their IT infrastructure and move their operations to the cloud, there is a rising demand for IT outsourcing services that specialize in these areas. This trend is expected to continue in the coming years, as more companies seek to optimize their operations and stay competitive in the digital age.

Local special circumstances: Bulgaria has several unique characteristics that make it an attractive destination for IT outsourcing. For one, the country has a large pool of highly skilled IT professionals, many of whom have received training in top universities in Bulgaria and other European countries. Additionally, the country has a relatively low cost of living and a favorable tax regime, which makes it an affordable location for outsourcing IT projects.

Underlying macroeconomic factors: The growth of the IT outsourcing market in Bulgaria is also being driven by broader macroeconomic factors. For one, the country has a stable political environment and a growing economy, which has helped to attract foreign investment and create new business opportunities. Additionally, Bulgaria is a member of the European Union, which has helped to facilitate trade and investment with other countries in the region. Finally, the country has invested heavily in its IT infrastructure in recent years, which has helped to create a supportive environment for the growth of the IT outsourcing industry.

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.