IT Outsourcing - Nordics

Nordics

In 2024, the projected revenue for the IT Outsourcing market in the Nordics is estimated to reach US$17.51bn.
This market segment is expected to experience a steady annual growth rate of 7.81% from 2024 to 2029, resulting in a market volume of US$25.50bn by 2029.
Furthermore, the average Spend per Employee in the IT Outsourcing market is expected to reach US$1.15k in 2024.
When comparing the global market, United States is predicted to generate the highest revenue in the IT Outsourcing market, reaching US$197.30bn in 2024.
In the IT Outsourcing market in the Nordics, Sweden is leading the way with its highly skilled workforce and strong focus on innovation.

Key regions: Brazil, Italy, United States, China, Germany

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

Nordics, comprising of Denmark, Finland, Norway, and Sweden, has been a hub for IT outsourcing for several years now.

Customer preferences: The Nordics region is known for its highly skilled workforce, advanced infrastructure, and favorable business environment. These factors have made the region an attractive location for outsourcing IT services. Customers in the Nordics prefer outsourcing IT services to reduce operational costs, improve efficiency, and access specialized skills that are not available in-house. Additionally, companies in the region are increasingly adopting digital technologies, which has led to a surge in demand for IT outsourcing services.

Trends in the market: One of the key trends in the IT outsourcing market in Nordics is the shift towards cloud-based services. Companies in the region are increasingly adopting cloud-based solutions to reduce costs, improve scalability, and enhance security. This trend has led to a rise in demand for cloud-based outsourcing services, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).Another trend in the market is the growing demand for nearshoring services. Companies in the Nordics are increasingly outsourcing IT services to neighboring countries such as Estonia, Latvia, and Lithuania. This trend is driven by the availability of skilled IT professionals in these countries, as well as the proximity to the Nordics region, which allows for easier communication and collaboration.

Local special circumstances: The IT outsourcing market in Nordics is characterized by a high degree of collaboration between customers and service providers. Customers in the region prefer to work closely with service providers to ensure that their specific requirements are met. Additionally, the region has a strong focus on sustainability, and customers are increasingly looking for service providers that have a strong environmental and social responsibility record.

Underlying macroeconomic factors: The IT outsourcing market in Nordics is driven by several macroeconomic factors, including the region's highly skilled workforce, advanced infrastructure, and favorable business environment. Additionally, the region's focus on innovation and digitalization has led to a surge in demand for IT outsourcing services. The region's strong economy and stable political environment have also contributed to the growth of the IT outsourcing market in Nordics.

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.