IT Outsourcing - South America

South America

In 2024, the projected revenue in the IT Outsourcing market for South America is estimated to be US$9.83bn.
This market is expected to experience a compound annual growth rate (CAGR) of 9.34% from 2024 to 2029, resulting in a market volume of US$15.36bn by 2029.
The average Spend per Employee in the IT Outsourcing market is expected to reach US$47.58 in 2024.
When compared globally, United States is anticipated to generate the highest revenue, amounting to US$197.30bn in 2024.
In South America, Brazil is emerging as a leading destination for IT outsourcing due to its large pool of skilled professionals and competitive cost advantages.

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 South America has been steadily growing in recent years.

Customer preferences: South American companies are increasingly turning to IT outsourcing to reduce costs and improve efficiency. Many companies in the region are looking to outsource non-core functions such as IT support and software development, allowing them to focus on their core competencies. Additionally, there is a growing demand for specialized IT services such as cybersecurity and cloud computing.

Trends in the market: Brazil is the largest IT outsourcing market in South America, accounting for the majority of the region's outsourcing revenue. However, other countries such as Argentina, Colombia, and Chile are also experiencing significant growth in their outsourcing industries. One trend that is emerging in the region is the rise of nearshoring, where companies outsource to nearby countries rather than offshoring to more distant locations. This trend is driven by the desire for closer cultural and linguistic ties, as well as the need for faster response times and easier collaboration.

Local special circumstances: One factor that is unique to the South American outsourcing market is the prevalence of small and medium-sized outsourcing providers. These providers often specialize in niche areas and can offer more personalized service than larger multinational firms. Additionally, many South American countries have government incentives in place to attract foreign investment in the IT sector, further boosting the outsourcing industry.

Underlying macroeconomic factors: The growth of the IT outsourcing market in South America is supported by several macroeconomic factors. One of the most important is the region's large and growing pool of highly skilled IT professionals. South American countries have invested heavily in education and training programs for IT workers, creating a highly educated and skilled workforce. Additionally, the relatively low labor costs in the region make it an attractive destination for companies looking to outsource. Finally, the increasing adoption of digital technologies across all industries is driving demand for IT outsourcing services.

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.