IT Outsourcing - Madagascar

Madagascar

Revenue in the IT Outsourcing market is projected to reach US$39.65m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 12.15%, resulting in a market volume of US$70.34m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$2.38 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 Madagascar has been steadily growing over the past few years, with increasing demand for IT services from both domestic and international clients.

Customer preferences: Madagascar has become an attractive destination for IT outsourcing due to its low labor costs, skilled workforce, and favorable business environment. Many international companies are choosing to outsource their IT services to Madagascar to take advantage of these benefits. Additionally, domestic businesses are also increasingly relying on IT outsourcing to improve their operations and remain competitive.

Trends in the market: One of the major trends in the IT outsourcing market in Madagascar is the growth of the software development industry. There has been a significant increase in demand for software development services from both domestic and international clients. This is due to the availability of a highly skilled workforce, as well as the relatively low cost of labor in Madagascar compared to other countries in the region.Another trend in the market is the increasing focus on digital transformation. Many businesses are looking to modernize their operations and improve their efficiency by adopting new technologies. This has led to a growing demand for IT services such as cloud computing, cybersecurity, and data analytics.

Local special circumstances: Madagascar has a number of unique characteristics that make it an attractive destination for IT outsourcing. The country has a young and dynamic population, with a high proportion of people under the age of 25. This means that there is a large pool of talented and ambitious workers who are eager to learn new skills and take on new challenges.Additionally, Madagascar has a relatively stable political environment and a growing economy. The government has implemented a number of policies to encourage foreign investment and promote economic growth, which has helped to create a favorable business environment for IT outsourcing companies.

Underlying macroeconomic factors: The growth of the IT outsourcing market in Madagascar is being driven by a number of underlying macroeconomic factors. These include the country's low labor costs, favorable business environment, and growing pool of skilled workers. Additionally, the increasing focus on digital transformation and the adoption of new technologies is creating new opportunities for IT outsourcing companies in Madagascar.Overall, the IT outsourcing market in Madagascar is expected to continue to grow in the coming years, driven by increasing demand from both domestic and international clients. With its skilled workforce, favorable business environment, and growing economy, Madagascar is well-positioned to become a leading destination for IT outsourcing 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.