IT Outsourcing - Iceland

Iceland

Revenue in the IT Outsourcing market is projected to reach US$93.41m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 11.00%, resulting in a market volume of US$157.40m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$370.00 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

Iceland, the land of fire and ice, is a small island nation located in the North Atlantic Ocean. Despite its small size, Iceland has a thriving IT outsourcing market that has been growing steadily over the past few years.

Customer preferences: Icelandic companies are increasingly turning to IT outsourcing to reduce costs and improve efficiency. Many companies prefer to outsource their IT needs to specialized firms that can provide them with the latest technology and expertise. Outsourcing also allows companies to focus on their core business and leave the IT management to the experts.

Trends in the market: One of the key trends in the Icelandic IT outsourcing market is the growing demand for cloud-based services. Cloud computing has revolutionized the IT industry by providing companies with flexible and scalable solutions that can be customized to their specific needs. Another trend is the increasing popularity of nearshoring, which involves outsourcing IT services to companies located in nearby countries. This allows Icelandic companies to take advantage of lower labor costs and access to a larger pool of skilled workers.

Local special circumstances: Iceland has a highly educated workforce with a strong background in technology and engineering. The country also has a favorable business environment with low corporate taxes and a stable political climate. Iceland's location also makes it an ideal location for disaster recovery and data backup services. The country is located in a geologically stable region with a low risk of natural disasters such as earthquakes and hurricanes.

Underlying macroeconomic factors: Iceland has a small and open economy that is heavily dependent on international trade. The country's IT outsourcing market has benefited from the growth of the global IT industry and the increasing demand for technology services. Iceland's government has also been supportive of the IT industry, providing incentives for companies to invest in the country. The country's membership in the European Economic Area (EEA) has also made it easier for Icelandic companies to do business with other countries in the region.

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.