IT Outsourcing - CIS

Revenue in the IT Outsourcing market is projected to reach US$4.06bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.12%, resulting in a market volume of US$6.00bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$35.06 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 CIS has been steadily growing over the past few years, with several countries in the region becoming increasingly popular destinations for outsourcing services.

Customer preferences: One of the main factors driving the growth of the IT Outsourcing market in CIS is the increasing demand for cost-effective and high-quality IT services. Many companies in Western Europe and North America are looking for ways to cut costs without compromising on quality, and outsourcing to countries in CIS has proven to be an effective solution. Additionally, many companies are attracted to the region because of the highly skilled workforce, particularly in the areas of software development and engineering.

Trends in the market: One of the key trends in the IT Outsourcing market in CIS is the increasing focus on innovation and digital transformation. Many companies in the region are investing heavily in emerging technologies such as artificial intelligence, blockchain, and the internet of things, and are positioning themselves as leaders in these areas. Additionally, there is a growing trend towards nearshoring, with companies in Western Europe and North America looking to outsource to countries in CIS that are closer to home.

Local special circumstances: One of the unique characteristics of the IT Outsourcing market in CIS is the diversity of the region. While there are some common trends across the region, each country has its own unique strengths and challenges. For example, Ukraine has a highly skilled workforce in software development and engineering, while Belarus has a strong focus on emerging technologies such as AI and blockchain. Additionally, political and economic instability in some countries, such as Russia, can impact the outsourcing market.

Underlying macroeconomic factors: One of the key macroeconomic factors driving the growth of the IT Outsourcing market in CIS is the low cost of living and labor in many countries in the region. This allows companies to offer competitive pricing for their services while still maintaining high-quality standards. Additionally, many countries in the region have favorable tax policies and government incentives for foreign companies looking to invest in the region. However, political instability and economic sanctions can also impact the outsourcing market, as seen in recent years with Russia.

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.