IT Outsourcing - Saudi Arabia

Saudi Arabia

Revenue in the IT Outsourcing market is projected to reach US$0.96bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 7.21%, resulting in a market volume of US$1.36bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$57.89 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.

For more information on the data displayed, use the info button right next to the boxes.

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.