IT Outsourcing - Sri Lanka

Sri Lanka

The IT Outsourcing market in Sri Lanka is poised for significant growth, with projected revenue of US$292.80m in 2025.
This indicates a promising future for the country's IT industry.
Looking ahead, experts anticipate an annual growth rate of 1.73% from 2025 to 2029, resulting in a market volume of US$313.60m by 2029.
These numbers highlight the potential for expansion and development in the IT Outsourcing market sector.
When it comes to the average Spend per Employee in the IT Outsourcing market, in Sri Lanka is expected to reach US$33.17 in 2025.
This figure demonstrates the value and efficiency of the country's workforce in delivering IT services.
In terms of global comparison, United States is anticipated to generate the highest revenue in the IT Outsourcing market, reaching a staggering US$213.60bn in 2025.
This showcases United States' dominant position in the global IT industry and its significant contribution to the overall market.
Overall, these numbers paint a promising picture for Sri Lanka's IT Outsourcing market, with projected growth and the potential for increased revenue in the coming years.
Sri Lanka's IT outsourcing market is experiencing significant growth, driven by its skilled workforce and competitive costs.

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

Sri Lanka, an island nation in South Asia, has been emerging as a popular destination for IT outsourcing in recent years.

Customer preferences: One of the main reasons for the growth of the IT outsourcing market in Sri Lanka is the increasing demand for cost-effective and high-quality IT services. Many businesses in developed countries are looking for ways to reduce their operational costs without compromising on the quality of their services. Sri Lanka's IT outsourcing industry offers a compelling value proposition, with its highly skilled workforce, competitive pricing, and favorable time zone.

Trends in the market: The IT outsourcing market in Sri Lanka is experiencing significant growth, with a focus on software development, data analytics, and digital marketing. The country's IT industry is also expanding into emerging technologies such as artificial intelligence, blockchain, and the Internet of Things. The growth of the IT outsourcing market in Sri Lanka is also driven by the government's initiatives to promote the country as a hub for IT and business process outsourcing.

Local special circumstances: Sri Lanka's IT outsourcing industry has several unique advantages. The country has a large pool of highly skilled IT professionals, with a strong focus on education and training. The government has also implemented policies to support the growth of the IT industry, including tax incentives, investment promotions, and the establishment of technology parks. Additionally, Sri Lanka's strategic location and favorable time zone make it an attractive destination for businesses in Europe, the Middle East, and Asia.

Underlying macroeconomic factors: Sri Lanka's IT outsourcing industry is also benefiting from the country's improving macroeconomic conditions. The government's efforts to promote economic growth and stability have resulted in a favorable business environment, with low inflation, stable exchange rates, and improving infrastructure. The country's geographical location and growing regional connectivity have also contributed to the growth of the IT outsourcing industry, with Sri Lanka serving as a gateway to the South Asian market.

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.