IT Outsourcing - Southern Africa

Southern Africa

In 2024, the projected revenue in the IT Outsourcing market in Southern Africa is expected to reach US$2.34bn.
This indicates a positive growth trend in the market.
Furthermore, it is anticipated that there will be an annual growth rate of 8.26% (CAGR 2024-2029), resulting in a market volume of US$3.48bn by 2029.
When looking at the average Spend per Employee in the IT Outsourcing market, it is projected to reach US$80.91 in 2024.
This serves as an indicator of the value and investment made by companies in Southern Africa towards IT Outsourcing market services.
In terms of global comparison, United States is anticipated to generate the highest revenue in the IT Outsourcing market, with a projected revenue of US$197.30bn in 2024.
This highlights the dominant position of the United States in the global IT Outsourcing market industry.
These numbers demonstrate the significant potential and growth opportunities that exist in the IT Outsourcing market in Southern Africa, as well as the global prominence of the United States in this sector.
The IT outsourcing market in Southern Africa is experiencing a surge in demand due to its skilled workforce and cost-effective solutions.

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

Southern Africa is experiencing significant growth in IT outsourcing services. The region is home to a growing number of technology-savvy businesses that are looking to reduce costs and improve efficiency by outsourcing IT services. This trend is being driven by a range of factors, including customer preferences, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Southern African businesses are increasingly turning to IT outsourcing services to help them reduce costs and improve efficiency. Many businesses in the region are struggling to keep up with the latest technological advancements, and outsourcing IT services allows them to access the latest technology without having to invest in expensive infrastructure and personnel. Additionally, outsourcing IT services allows businesses to focus on their core competencies, which can help them to improve their overall performance and competitiveness.

Trends in the market: One of the key trends in the Southern African IT outsourcing market is the growing popularity of cloud computing services. Many businesses in the region are turning to cloud computing services to help them reduce costs and improve efficiency. Cloud computing allows businesses to access the latest technology without having to invest in expensive infrastructure and personnel. Additionally, cloud computing allows businesses to scale their IT services up or down depending on their needs, which can help them to reduce costs and improve flexibility.Another trend in the Southern African IT outsourcing market is the growing importance of cybersecurity services. As businesses in the region become increasingly reliant on technology, they are also becoming more vulnerable to cyber threats. This has led to a growing demand for cybersecurity services that can help businesses to protect their data and systems from cyber attacks.

Local special circumstances: One of the key local special circumstances driving the growth of the Southern African IT outsourcing market is the region's shortage of skilled IT professionals. Many businesses in the region are struggling to find the skilled IT professionals they need to keep up with the latest technological advancements. Outsourcing IT services allows these businesses to access the skills and expertise they need without having to invest in expensive infrastructure and personnel.

Underlying macroeconomic factors: The Southern African IT outsourcing market is also being driven by a range of underlying macroeconomic factors. The region is home to a growing number of technology-savvy businesses that are looking to reduce costs and improve efficiency by outsourcing IT services. Additionally, the region's growing middle class is driving demand for technology services, which is creating new opportunities for IT outsourcing providers. Finally, the region's improving infrastructure and political stability are making it an increasingly attractive destination 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.