IT Outsourcing - Saudi Arabia

Saudi Arabia

The IT Outsourcing market in Saudi Arabia is expected to witness a significant growth in the coming years.
According to projections, the revenue in this market is estimated to reach US$0.96bn by 2024.
Furthermore, it is anticipated that the market will experience an annual growth rate of 7.21% between 2024 and 2029, resulting in a market volume of US$1.36bn by 2029.
In terms of spending, the average Spend per Employee in the IT Outsourcing market is expected to reach US$57.89 in 2024.
This indicates the level of investment and resources allocated to IT Outsourcing market services in Saudi Arabia.
When compared globally, it is worth noting that United States is projected to generate the highest revenue in the IT Outsourcing market.
In 2024, United States is expected to generate a revenue of US$197.30bn, highlighting its dominance in this sector.
These figures demonstrate the significant potential and growth opportunities that lie ahead for the IT Outsourcing market in Saudi Arabia.
As businesses continue to rely on external IT services, the market is poised for further expansion and development in the coming years.
The IT outsourcing market in Saudi Arabia is experiencing a significant growth due to the country's focus on digital transformation and its favorable business environment.

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

The IT Outsourcing market in Saudi Arabia has been steadily growing over the past few years, with an increasing number of businesses seeking to outsource their IT needs to external providers.

Customer preferences: One of the main reasons for this growth is the increasing demand for digital transformation and cloud-based solutions. Many businesses in Saudi Arabia are looking to modernize their IT infrastructure and move towards more flexible and scalable solutions that can support their growth and expansion plans. This has led to a rise in demand for IT outsourcing services that can provide these solutions in a cost-effective and efficient manner.

Trends in the market: Another key trend in the IT outsourcing market in Saudi Arabia is the growing popularity of nearshoring. Many businesses are now looking to outsource their IT needs to nearby countries such as Egypt, Jordan, and the UAE, rather than to more distant locations such as India or the Philippines. This is due to a number of factors, including the cultural and linguistic similarities between these countries and Saudi Arabia, as well as the lower costs and shorter travel times involved.

Local special circumstances: Saudi Arabia's Vision 2030 initiative is also playing a significant role in the growth of the IT outsourcing market in the country. This ambitious program aims to diversify the Saudi economy away from its reliance on oil and gas, and towards a more knowledge-based economy. To achieve this, the government is investing heavily in the development of the country's IT infrastructure, and is actively encouraging businesses to adopt digital technologies and solutions.

Underlying macroeconomic factors: In addition to these factors, there are a number of underlying macroeconomic factors that are driving the growth of the IT outsourcing market in Saudi Arabia. These include the country's large and growing population, its strategic location at the crossroads of Europe, Asia, and Africa, and its strong and stable economy. With the right policies and investments in place, the IT outsourcing market in Saudi Arabia is well-positioned to continue its growth trajectory in the years to come.

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.