IT Outsourcing - Tanzania

Tanzania

The IT Outsourcing market in Tanzania is anticipated to witness significant growth, with projected revenue reaching US$220.80m by 2025.
This upward trend is expected to continue, as the market is estimated to exhibit an impressive Compound Annual Growth Rate (CAGR) of 12.98% between 2025 and 2029.
Consequently, the market volume is projected to expand to US$359.80m by 2029.
Furthermore, the average Spend per Employee in the IT Outsourcing market is projected to reach US$6.50 in 2025, reflecting the growing importance and investment in this sector.
When it comes to global comparison, United States is expected to generate the highest revenue in the IT Outsourcing market, with an estimated US$213.60bn in 2025.
This highlights the dominant position of the United States in this market segment.
Tanzania's IT outsourcing market is rapidly growing, attracting international companies seeking cost-effective solutions and access to a skilled workforce.

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

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Analyst Opinion

The IT outsourcing market in Tanzania is rapidly evolving to meet the needs of businesses seeking to leverage technology to improve their operations and connect with customers.

Customer preferences: Tanzanian businesses are increasingly turning to IT outsourcing to access specialized skills and technologies that they may not have in-house. This is especially true for small and medium-sized enterprises (SMEs) that may not have the resources to invest in expensive IT infrastructure or hire full-time IT staff. Additionally, businesses are seeking IT outsourcing providers that can offer flexible and scalable solutions to meet their changing needs.

Trends in the market: One of the key trends in the Tanzanian IT outsourcing market is the growing demand for cloud-based solutions. This is driven by the need for businesses to access their data and applications from anywhere, at any time, and on any device. Additionally, businesses are increasingly looking for IT outsourcing providers that can offer end-to-end solutions, including consulting, implementation, and ongoing support.

Local special circumstances: Tanzania has a young and tech-savvy population, which is driving demand for digital services and solutions. However, the country also faces challenges such as limited access to reliable internet connectivity and a shortage of skilled IT professionals. This has led to the development of innovative solutions such as mobile-based applications and training programs to bridge the skills gap.

Underlying macroeconomic factors: Tanzania has experienced steady economic growth in recent years, which has created opportunities for businesses to invest in technology and expand their operations. Additionally, the government has implemented policies to support the growth of the ICT sector, such as tax incentives for IT companies and the establishment of technology parks. However, the country still faces challenges such as corruption, bureaucracy, and limited access to financing, which can hinder the growth of the IT outsourcing 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.