IT Outsourcing - G7

Revenue in the IT Outsourcing market is projected to reach US$351.00bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.15%, resulting in a market volume of US$519.40bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$871.70 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 G7 has been experiencing a steady growth in recent years.

Customer preferences: The customers in G7 countries are increasingly looking for cost-effective solutions without compromising on quality. IT outsourcing offers a viable solution to this by providing access to a pool of skilled professionals at a lower cost. Additionally, customers are also looking for customized solutions that cater to their specific needs, which is a key factor driving the growth of the IT outsourcing market.

Trends in the market: In the United States, the IT outsourcing market is being driven by the need for specialized skills such as cybersecurity and cloud computing. The demand for these skills is expected to continue to grow in the coming years. In Canada, the IT outsourcing market is being driven by the increasing adoption of digital technologies by businesses. This has led to a growing demand for IT services such as software development and data analytics. In the United Kingdom, the IT outsourcing market is being driven by the need for cost-effective solutions in the wake of Brexit. Companies are looking to cut costs wherever possible, and IT outsourcing provides a viable solution. In France, the IT outsourcing market is being driven by the increasing adoption of cloud computing and big data analytics. Companies are looking for ways to leverage these technologies to gain a competitive edge. In Germany, the IT outsourcing market is being driven by the need for customized solutions that cater to the unique needs of businesses. This has led to a growing demand for IT services such as software development, data analytics, and cybersecurity. In Italy, the IT outsourcing market is being driven by the increasing adoption of digital technologies by businesses. This has led to a growing demand for IT services such as software development and data analytics. In Japan, the IT outsourcing market is being driven by the need for cost-effective solutions in the wake of the aging population. Companies are looking for ways to cut costs and increase efficiency, and IT outsourcing provides a viable solution.

Local special circumstances: Each G7 country has its own unique set of circumstances that are driving the growth of the IT outsourcing market. In the United States, the increasing demand for cybersecurity and cloud computing skills is being driven by the growing threat of cyber attacks and the need to move to the cloud. In Canada, the increasing adoption of digital technologies by businesses is being driven by the need to stay competitive in a rapidly changing business environment. In the United Kingdom, the need for cost-effective solutions in the wake of Brexit is driving the growth of the IT outsourcing market. In France, the increasing adoption of cloud computing and big data analytics is being driven by the need to gain a competitive edge. In Germany, the need for customized solutions that cater to the unique needs of businesses is driving the growth of the IT outsourcing market. In Italy, the increasing adoption of digital technologies by businesses is being driven by the need to stay competitive in a rapidly changing business environment. In Japan, the need for cost-effective solutions in the wake of the aging population is driving the growth of the IT outsourcing market.

Underlying macroeconomic factors: The underlying macroeconomic factors driving the growth of the IT outsourcing market in G7 countries include globalization, digitalization, and the need for cost-effective solutions. Globalization has led to increased competition among businesses, which has in turn led to a growing demand for cost-effective solutions. Digitalization has led to a growing demand for IT services such as software development, data analytics, and cybersecurity. The need for cost-effective solutions is being driven by the need to cut costs and increase efficiency in a rapidly changing business environment.

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.