IT Outsourcing - Nepal

Nepal

Revenue in the IT Outsourcing market is projected to reach US$93.08m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 12.16%, resulting in a market volume of US$165.20m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$9.99 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

Nepal, a landlocked country in South Asia, is known for its breathtaking mountains and diverse culture. However, in recent years, Nepal has also gained attention for its growing IT outsourcing market.

Customer preferences: Nepal's IT outsourcing market has seen an increase in demand for software development, web development, and mobile application development services. Clients from various industries prefer Nepal for its cost-effective solutions and skilled workforce. Additionally, Nepal's time zone proximity to major countries like India, China, and Australia makes it an attractive outsourcing destination.

Trends in the market: One of the significant trends in Nepal's IT outsourcing market is the rise of small and medium-sized enterprises (SMEs) offering specialized services. These SMEs cater to niche markets and provide personalized solutions to clients. Another trend is the growth of e-commerce and digital marketing services, which has led to an increase in demand for web development and mobile application development services.

Local special circumstances: Nepal's IT outsourcing market faces challenges due to its underdeveloped infrastructure, lack of government support, and political instability. However, despite these challenges, Nepal's IT outsourcing market is growing due to its young and educated workforce. Additionally, the Nepalese government is taking steps to promote the IT industry by providing tax incentives and establishing IT parks.

Underlying macroeconomic factors: Nepal's IT outsourcing market is influenced by global economic trends, such as the increasing demand for cost-effective solutions and the rise of e-commerce. The country's proximity to major markets like India and China also plays a significant role in its IT outsourcing market. Furthermore, Nepal's growing young population and increasing literacy rate provide a skilled workforce for the IT industry.

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.