IT Outsourcing - Taiwan

Taiwan

Revenue in the IT Outsourcing market is projected to reach US$3.40bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.70%, resulting in a market volume of US$5.16bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$130.90 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.

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Market

Region

Region comparison

Currency

Analyst Opinion

Taiwan, known for its advanced technology and skilled workforce, has been a popular destination for IT outsourcing services.

Customer preferences: Companies in Taiwan are increasingly outsourcing their IT services to third-party vendors to reduce costs and increase efficiency. Small and medium-sized enterprises (SMEs) are particularly interested in outsourcing as they lack the resources to maintain an in-house IT team. Additionally, Taiwan's IT outsourcing market is seeing a rise in demand for cloud-based services as companies look to move their operations online.

Trends in the market: One trend in the IT outsourcing market in Taiwan is the increasing popularity of nearshoring. Taiwanese companies are turning to nearby countries such as Vietnam and the Philippines for outsourcing services due to lower labor costs and proximity. Another trend is the rise of artificial intelligence (AI) and machine learning (ML) outsourcing services. As Taiwan continues to invest in AI and ML technology, companies are looking to outsource these services to third-party vendors with expertise in these areas.

Local special circumstances: Taiwan's IT outsourcing market is unique due to its close proximity to China. Taiwanese companies are able to leverage their cultural and linguistic similarities with China to provide outsourcing services to Chinese companies. Additionally, Taiwan's government has been actively promoting the country as a hub for innovation and technology, which has attracted foreign companies to outsource their IT services to Taiwan.

Underlying macroeconomic factors: Taiwan's IT outsourcing market is heavily influenced by the global economy. As the world becomes increasingly interconnected, companies are looking to outsource their IT services to countries with skilled workforces and advanced technology. Additionally, Taiwan's government policies and investments in technology have helped to create a favorable environment for IT outsourcing services. However, the ongoing trade tensions between the US and China may have an impact on Taiwan's IT outsourcing market as companies may be hesitant to outsource to a country that is closely tied to China.

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.