IT Outsourcing - Croatia

Croatia

Revenue in the IT Outsourcing market is projected to reach US$304.70m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.17%, resulting in a market volume of US$472.40m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$176.20 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

Amidst the global trend of IT outsourcing, Croatia has also seen an increase in the demand for outsourcing services.

Customer preferences: Businesses in Croatia are increasingly looking to outsource their IT services to reduce costs and improve efficiency. The majority of the demand for IT outsourcing in Croatia comes from small and medium-sized enterprises (SMEs) that lack the resources to maintain an in-house IT team. These businesses are looking for reliable and cost-effective outsourcing partners that can provide high-quality services.

Trends in the market: The IT outsourcing market in Croatia is still in its early stages, but it is growing rapidly. One of the major trends in the market is the increasing demand for nearshore outsourcing services. Croatia's proximity to Western Europe makes it an attractive destination for businesses looking to outsource their IT services. Additionally, the country has a highly educated workforce with strong technical skills, which is another factor driving the growth of the IT outsourcing market.Another trend in the market is the increasing adoption of cloud computing services. Businesses in Croatia are increasingly looking to move their IT infrastructure to the cloud to reduce costs and improve flexibility. This trend is driving the demand for cloud-based outsourcing services, such as software-as-a-service (SaaS) and platform-as-a-service (PaaS) solutions.

Local special circumstances: One of the challenges facing the IT outsourcing market in Croatia is the shortage of skilled IT professionals. While the country has a highly educated workforce, there is a shortage of workers with specialized technical skills. This shortage is driving up the cost of IT outsourcing services in the country and making it difficult for businesses to find reliable outsourcing partners.Another challenge facing the market is the lack of government support for the IT outsourcing industry. While the Croatian government has taken steps to promote the country as a destination for foreign investment, there is little support specifically targeted towards the IT outsourcing industry.

Underlying macroeconomic factors: Croatia's economy has been growing steadily in recent years, which is driving the demand for IT outsourcing services. The country's GDP grew by 2.9% in 2019, and it is expected to continue growing in the coming years. Additionally, Croatia's membership in the European Union has made it an attractive destination for foreign investment, which is also driving the growth of the IT outsourcing market.Overall, the IT outsourcing market in Croatia is still in its early stages but is growing rapidly. While there are challenges facing the market, such as a shortage of skilled IT professionals and a lack of government support, the country's proximity to Western Europe and highly educated workforce make it an attractive destination for businesses looking to outsource their IT services.

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.