IT Outsourcing - Eastern Asia

Eastern Asia

Revenue in the IT Outsourcing market is projected to reach US$52.35bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.20%, resulting in a market volume of US$77.62bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$57.31 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 Eastern Asia has been experiencing significant growth in recent years, driven by various factors such as cost-effectiveness, high-quality services, and access to a highly skilled workforce.

Customer preferences: Customers in Eastern Asia have shown a strong preference for outsourcing services that offer cost savings while maintaining high-quality standards. This has led to an increase in demand for outsourcing services in the region, particularly in countries such as China, Japan, and South Korea. Additionally, customers are increasingly looking for providers that offer a range of services, such as software development, IT support, and data management.

Trends in the market: China has emerged as a major player in the IT Outsourcing market in Eastern Asia, with a rapidly growing IT industry and a large pool of skilled professionals. The country has also been investing heavily in infrastructure, which has helped to improve its connectivity and attract foreign investment. Japan and South Korea have also seen significant growth in their IT Outsourcing markets, driven by their advanced technology industries and highly skilled workforce.

Local special circumstances: One of the unique challenges facing the IT Outsourcing market in Eastern Asia is the language barrier. Many customers require services in their native language, which can be a challenge for providers that do not have a strong local presence. Additionally, cultural differences can also impact the outsourcing process, as customers may have different expectations and communication styles.

Underlying macroeconomic factors: The growth of the IT Outsourcing market in Eastern Asia is closely tied to the region's economic development. As countries in the region continue to develop and modernize their economies, the demand for IT services is expected to increase. Additionally, the region's large and growing middle class is also driving demand for IT services, particularly in areas such as e-commerce and mobile app development. Finally, the increasing trend towards globalization and the rise of digital technologies is also expected to fuel growth in the IT Outsourcing market in Eastern Asia.

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.