IT Outsourcing - Ethiopia

Ethiopia

Revenue in the IT Outsourcing market is projected to reach US$540.30m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 15.13%, resulting in a market volume of US$1,093.00m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$8.58 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.

For more information on the data displayed, use the info button right next to the boxes.

Market

Region

Region comparison

Currency

Analyst Opinion

The IT Outsourcing market in Ethiopia has been steadily growing in recent years, driven by a combination of factors such as favorable government policies, a large pool of skilled professionals, and increasing demand from both domestic and international clients.

Customer preferences: One of the key customer preferences in the IT Outsourcing market in Ethiopia is cost-effectiveness. Many clients are drawn to Ethiopia's competitive pricing compared to other outsourcing destinations, making it an attractive option for small and medium-sized enterprises (SMEs) with limited budgets. Additionally, clients value the country's high-quality services and the availability of a large pool of skilled IT professionals.

Trends in the market: One of the major trends in the IT Outsourcing market in Ethiopia is the increasing focus on software development and testing services. This is due to the country's large pool of software engineers and developers, as well as the growing demand for customized software solutions. Another trend is the rise of cloud computing services, with many IT outsourcing firms in Ethiopia offering cloud-based solutions to clients.

Local special circumstances: One of the unique aspects of the IT Outsourcing market in Ethiopia is the government's commitment to developing the sector. The government has implemented policies and initiatives aimed at promoting the growth of the IT industry, such as tax incentives for IT companies and the establishment of technology parks. Additionally, the country's young and tech-savvy population is a major asset, providing a large pool of talent for the industry.

Underlying macroeconomic factors: The IT Outsourcing market in Ethiopia is also influenced by broader macroeconomic factors. For instance, the country's stable political environment and improving infrastructure have helped to attract foreign investment and boost the IT industry. Additionally, the growing demand for IT services in Ethiopia's domestic market is driving the growth of the sector, as more businesses seek to digitize their operations and expand their online presence.

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.