IT Outsourcing - Kenya

Kenya

Revenue in the IT Outsourcing market is projected to reach US$292.20m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 10.27%, resulting in a market volume of US$476.40m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$11.00 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

Kenya, a country in East Africa, has been experiencing a steady growth in its IT outsourcing market in recent years.

Customer preferences: Kenyan businesses have been increasingly outsourcing their IT services to cut down on costs and improve efficiency. This trend is driven by a growing demand for specialized IT services, such as software development, cloud computing, and cybersecurity. Additionally, Kenyan businesses are looking to leverage the expertise of global IT service providers to improve their operations and gain a competitive edge.

Trends in the market: One of the key trends in the Kenyan IT outsourcing market is the rise of small and medium-sized enterprises (SMEs) outsourcing their IT services. SMEs are increasingly realizing the benefits of outsourcing their IT services, such as reduced costs and access to specialized skills. Another trend is the growing popularity of cloud computing services, which offer businesses a cost-effective way to store and manage their data.

Local special circumstances: Kenya has a young and tech-savvy population, which has led to the growth of a vibrant tech startup ecosystem. This ecosystem has attracted significant investment and has led to the emergence of a number of successful tech startups. These startups are increasingly outsourcing their IT services to global providers to access specialized skills and improve their operations.

Underlying macroeconomic factors: Kenya's economy has been growing steadily in recent years, driven by a range of factors such as infrastructure development, a growing middle class, and political stability. This growth has led to increased investment in the country's IT sector, which has created opportunities for IT outsourcing providers. Additionally, Kenya's strategic location in East Africa and its strong ties to other African countries make it an attractive destination for global IT service providers looking to expand their operations in the region.In conclusion, the IT outsourcing market in Kenya is growing due to a range of factors such as the demand for specialized IT services, the rise of SMEs outsourcing their IT services, the popularity of cloud computing services, a young and tech-savvy population, and a growing economy. These factors are expected to continue driving the growth of the IT outsourcing market in Kenya in the coming years.

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.