IT Outsourcing - Lithuania

Lithuania

Revenue in the IT Outsourcing market is projected to reach US$180.80m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.01%, resulting in a market volume of US$278.30m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$117.40 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

Lithuania, a small but innovative country in the Baltic region, has been making significant strides in the IT outsourcing market.

Customer preferences: Lithuania has become a popular destination for IT outsourcing due to its highly skilled workforce, competitive prices, and proximity to Western Europe. Many companies are attracted to Lithuania's strong IT education system, which produces a large pool of talented IT professionals. Additionally, Lithuanian IT companies have a reputation for providing high-quality services at lower costs compared to other European countries.

Trends in the market: In recent years, Lithuania has experienced a surge in demand for IT outsourcing services. This is due to several factors, including the country's favorable business climate, its strategic location, and the growing trend of companies outsourcing non-core functions to focus on their core competencies. The COVID-19 pandemic has also accelerated the trend of remote work, leading to an increased demand for IT outsourcing services.

Local special circumstances: Lithuania has a vibrant startup ecosystem, which has contributed to the growth of the IT outsourcing market. Many Lithuanian startups have developed innovative technologies and solutions, which have attracted the attention of international companies. Additionally, the Lithuanian government has been actively promoting the country as a destination for IT outsourcing, offering various incentives and support programs to attract foreign investment.

Underlying macroeconomic factors: Lithuania's strong macroeconomic fundamentals have also contributed to the growth of the IT outsourcing market. The country has a stable political environment, a highly educated workforce, and a favorable business climate. Additionally, Lithuania has invested heavily in its infrastructure, including its telecommunications network, which has made it easier for companies to do business in the country. The country's membership in the European Union has also provided access to a large market and has made it easier for Lithuanian companies to do business with other European countries. In conclusion, Lithuania's IT outsourcing market is thriving due to its highly skilled workforce, competitive prices, favorable business climate, and innovative startup ecosystem. The country's strategic location, strong macroeconomic fundamentals, and government support have also contributed to its success. As the trend of remote work continues to grow, it is likely that the demand for IT outsourcing services in Lithuania will continue to increase.

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.