IT Outsourcing - MENA

MENA

Revenue in the IT Outsourcing market is projected to reach US$11.11bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.06%, resulting in a market volume of US$17.14bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$56.54 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 the Middle East and North Africa (MENA) region is experiencing significant growth and development. Customer preferences in the MENA region are driving the growth of the IT Outsourcing market.

Companies in this region are increasingly looking to outsource their IT needs in order to reduce costs, improve efficiency, and access specialized skills and expertise. Additionally, the MENA region has a large pool of young and educated professionals who are skilled in IT and can provide high-quality services to international clients. Trends in the market show that companies in the MENA region are increasingly outsourcing IT services such as software development, application management, and infrastructure management.

This trend is driven by the need for companies to focus on their core competencies while outsourcing non-core IT functions to specialized service providers. Additionally, the MENA region is becoming a popular destination for nearshore outsourcing, with companies from Europe and North America outsourcing their IT needs to countries in the region due to the close proximity and cultural similarities. Local special circumstances in the MENA region also contribute to the growth of the IT Outsourcing market.

Countries in the region, such as the United Arab Emirates, Saudi Arabia, and Egypt, have invested heavily in developing their IT infrastructure and creating a business-friendly environment to attract foreign investment. These efforts have resulted in a growing number of IT companies and service providers in the region, further fueling the growth of the IT Outsourcing market. Underlying macroeconomic factors also play a role in the development of the IT Outsourcing market in the MENA region.

The region has a young and growing population, which provides a large pool of potential IT professionals. Additionally, governments in the region are actively promoting the development of the IT sector and providing incentives for companies to invest in IT outsourcing. These factors, combined with the region's strategic location and favorable business environment, make the MENA region an attractive destination for IT outsourcing.

In conclusion, the IT Outsourcing market in the MENA region is experiencing significant growth and development due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. Companies in the region are increasingly outsourcing their IT needs to reduce costs, improve efficiency, and access specialized skills and expertise. The MENA region's young and educated workforce, growing IT infrastructure, and business-friendly environment make it an attractive destination for IT outsourcing.

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.