IT Outsourcing - South Africa | Statista Market Forecast

The IT Outsourcing market in South Africa is forecasted to witness a substantial growth in the coming years.
According to projections, the revenue in this market is expected to reach US$2.40bn in 2025.
Furthermore, it is anticipated that the market will exhibit a promising compound annual growth rate (CAGR) of 7.88% between 2025 and 2029, resulting in a market volume of US$3.24bn by 2029.
When considering the average spend per employee in the IT Outsourcing market sector, it is estimated that it will reach US$94.64 in 2025.
This indicates the level of investment and expenditure allocated towards outsourcing IT services in South Africa.
In the global context, it is noteworthy that United States is expected to generate the highest revenue in the IT Outsourcing market, reaching a staggering US$213.57bn in 2025.
This highlights the dominance and significance of the United States in the IT Outsourcing market industry worldwide.
South Africa is emerging as a leading destination for IT outsourcing due to its skilled workforce and cost-effective services.

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.

Application outsourcing, such as ScienceSoft, Arcanys, and SumatoSoft
Administration outsourcing, such as Conduent, Genpact, and ADP (Automatic Data Processing)
Web hosting, such as GoDaddy, Bluehost, and Amazon Web Services
Infrastructure outsourcing, such as IBM Global Technology Services, Wipro Infrastructure Engineering, and Cognizant Infrastructure Services

Business process outsourcing, such as IBM, Infosys, and NTT Data
Professional payment outsourcing, such as Paychex, ADP (Automatic Data Processing), and WNS Global Services
Infrastructure as a service, such as Microsoft Azure, Alibaba Cloud, and DigitalOcean
Platform as a service, such as Microsoft Azura, Google Cloud, and Engine Yard
Non-IT related outsourcing

IT Outsourcing: market data & analysis

The IT Outsourcing market in South Africa has been experiencing steady growth in recent years.

Customer preferences: South African companies are increasingly turning to IT outsourcing to reduce costs and improve operational efficiency. Many companies are also looking to outsource IT services to take advantage of the expertise and technology of global IT service providers. Additionally, the rise of digital transformation and the need for advanced technologies such as artificial intelligence and cloud computing are driving demand for IT outsourcing services.

Trends in the market: One trend in the South African IT outsourcing market is the increasing adoption of cloud computing services. This trend is driven by the need for businesses to reduce costs and improve efficiency, as well as the growing popularity of Software as a Service (SaaS) and Infrastructure as a Service (IaaS) solutions. Another trend is the rise of digital transformation, which is driving demand for advanced technologies such as artificial intelligence and machine learning. As a result, many IT outsourcing providers are expanding their services to include these technologies.

Local special circumstances: South Africa has a well-established IT outsourcing industry, with a large pool of skilled IT professionals and a favorable business environment. Additionally, the country's time zone and cultural similarities with Europe make it an attractive destination for European companies looking to outsource IT services.

Underlying macroeconomic factors: The South African IT outsourcing market is influenced by a number of macroeconomic factors, including the country's political stability, economic growth, and regulatory environment. The government has been actively promoting the development of the IT sector, which has helped to attract foreign investment and support the growth of local IT companies. Additionally, the country's favorable exchange rate and low labor costs make it an attractive destination for foreign companies looking to outsource IT services. However, the market is also affected by challenges such as a shortage of skilled IT professionals and infrastructure limitations.

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.

This report presents a comprehensive analysis and additional information on the Technology market, in a PDF format.

Unseen yet omnipresent, Information Technology (IT) services are the invisible gears driving modern organizations. These services support business operations and digital transformation through outsourcing, managed services, security, data management, and cloud computing. By leveraging these services, companies enhance efficiency, reduce costs, and gain competitive advantages in a digital marketplace. Prominent cloud providers worldwide include Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud. In the managed services sector, Oracle, Accenture, and IBM are among the largest providers globally.

IT Outsourcing - South Africa

Revenue

Key Players

Analyst Opinion

Global Comparison

Methodology

Technology

Access more Market Insights on Technology topics with our featured report

Key Market Indicators

Explore more high-quality data on related topic

IT services - Statistics & Facts

Contact