IT Outsourcing - North America

North America

The IT Outsourcing market in North America is expected to witness significant growth in the coming years.
According to projections, the revenue in this market is estimated to reach a staggering US$215.30bn by 2024.
This impressive figure highlights the immense potential and demand for IT outsourcing services in the region.
Furthermore, the market is anticipated to exhibit a healthy annual growth rate of 8.07% from 2024 to 2029, resulting in a substantial market volume of US$317.40bn by the end of the forecast period.
This sustained growth reflects the continuous reliance on IT outsourcing solutions by businesses across various industries in North America.
When it comes to analyzing the spending patterns in this market, the average Spend per Employee is projected to reach US$843.70 in 2024.
This metric serves as an indicator of the level of investment made by companies in outsourcing their IT functions.
The increasing average spend per employee signifies the growing importance and value placed on outsourcing IT services in North America.
In terms of global comparison, it is worth noting that United States is expected to generate the highest revenue in the IT Outsourcing market, with an estimated US$197.30bn in 2024.
This highlights the dominance and prominence of the US market in the IT outsourcing industry, further emphasizing its position as a key player in the global arena.
Overall, the IT Outsourcing market in North America is poised for substantial growth, with significant revenue projections and a robust annual growth rate.
The region's strong focus on IT outsourcing, exemplified by countries like United States, solidifies its position as a major market player in the global IT outsourcing landscape.
In North America, the trend in IT outsourcing in the IT services market is driven by the high demand for cost-effective solutions and access to a large pool of skilled IT professionals.

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

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Analyst Opinion

The demand for IT outsourcing services in North America has been steadily increasing over the years, driven by factors such as cost savings, access to specialized skills, and the need for flexibility in managing IT operations.

Customer preferences: North American businesses are increasingly turning to outsourcing as a means of reducing costs and improving operational efficiency. Companies are looking to take advantage of the lower labor costs and greater access to specialized skills that outsourcing can provide. Additionally, businesses are seeking greater flexibility in managing their IT operations, and outsourcing allows them to scale up or down as needed.

Trends in the market: One of the major trends in the North American IT outsourcing market is the growing adoption of cloud-based services. Cloud computing has become increasingly popular in recent years, and many businesses are now looking to outsource their IT operations to cloud service providers. This trend is being driven by the need for greater flexibility, scalability, and cost savings.Another trend in the market is the rise of nearshore outsourcing. Many North American businesses are now looking to outsource their IT operations to countries in the same time zone, such as Mexico and Canada. Nearshore outsourcing offers many of the same benefits as offshore outsourcing, such as lower labor costs and access to specialized skills, but with the added benefit of being in the same time zone.

Local special circumstances: One of the unique aspects of the North American IT outsourcing market is the prevalence of onshore outsourcing. Many businesses are choosing to outsource their IT operations to companies within the United States or Canada, rather than offshore to countries such as India or China. This is due in part to concerns over data security and intellectual property protection, as well as the desire to work with companies that are closer to home.

Underlying macroeconomic factors: The North American IT outsourcing market is being driven by a number of macroeconomic factors, including the increasing use of technology in business operations, the need for cost savings and efficiency, and the growing demand for specialized skills. Additionally, the rise of cloud computing and nearshore outsourcing is being driven by the need for greater flexibility and scalability in managing IT operations. As these trends continue to evolve, we can expect to see continued growth in the North American IT outsourcing market.

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.