IT Outsourcing - Dominican Republic

Dominican Republic

The IT Outsourcing market in the Dominican Republic is expected to witness significant growth in the coming years.
According to projections, the market's revenue is set to reach US$240.50m by 2024.
Furthermore, it is anticipated that the market will experience a steady annual growth rate (CAGR 2024-2029) of 11.18%, resulting in a market volume of US$408.50m by 2029.
In terms of the average Spend per Employee in the IT Outsourcing market, it is estimated to reach US$43.18 in 2024.
This figure highlights the financial investment made by companies in the Dominican Republic to outsource their IT operations.
When comparing the revenue generated in the IT Outsourcing market globally, United States is expected to lead the way.
It is projected that United States will generate US$197.30bn in revenue in 2024, highlighting its dominance in this sector.
The Dominican Republic is emerging as a top destination for IT outsourcing due to its skilled workforce and competitive cost advantage.

Key regions: Brazil, Italy, United States, China, Germany

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 Dominican Republic is becoming an increasingly popular destination for IT outsourcing.

Customer preferences: Companies are drawn to the Dominican Republic for its proximity to the United States and its large pool of skilled IT professionals. The country's bilingual workforce is particularly attractive to US-based companies looking to outsource IT services. Additionally, the Dominican Republic's time zone is just one hour ahead of Eastern Standard Time, making it easy for US companies to communicate with their outsourced teams during regular business hours.

Trends in the market: One of the biggest trends in the Dominican Republic's IT outsourcing market is the rise of nearshore outsourcing. Companies are increasingly looking for outsourcing partners that are located closer to their home country, as this can offer advantages such as cultural similarity, easier travel, and better communication. The Dominican Republic's location in the Caribbean makes it an ideal nearshore outsourcing destination for US companies. Another trend in the market is the growth of the country's startup ecosystem. As more and more startups are founded in the Dominican Republic, there is a greater demand for IT outsourcing services to help these companies scale and grow. This has led to an increase in the number of IT outsourcing providers in the country, as well as a greater focus on innovation and cutting-edge technologies.

Local special circumstances: One of the unique aspects of the Dominican Republic's IT outsourcing market is the government's focus on promoting the industry. The country's government has implemented a number of policies and initiatives designed to attract foreign investment and help local IT companies grow. For example, the government has established tax incentives for IT companies and has invested in the development of technology parks and other infrastructure.

Underlying macroeconomic factors: The Dominican Republic's strong economic growth in recent years has helped to fuel the growth of the IT outsourcing market. The country's GDP has been growing at a steady rate, and the government has been investing in infrastructure and other areas to support continued economic growth. Additionally, the country's stable political environment and relatively low labor costs make it an attractive destination for companies looking to outsource 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.