IT Services - Japan

Japan

The IT Services market in Japan is forecasted to achieve a revenue of ¥US$89.45bn in 2024.
Within this market segment, IT Outsourcing is expected to be the dominant player, with a projected market volume of ¥US$36.14bn in 2024.
Looking ahead, the revenue is anticipated to grow at an annual growth rate of 5.61% (CAGR 2024-2029), resulting in a market volume of ¥US$117.50bn by 2029.
Additionally, the IT Services market in Japan is expected to witness an average spend per employee of ¥US$1,293.00 in 2024.
It is worth noting that in global comparison, United States is projected to generate the highest revenue, reaching US$522.00bn in 2024.
Japan's IT services market is experiencing a surge in demand for cloud computing solutions, driven by the country's focus on technological innovation and digital transformation.

Key regions: United States, China, India, Japan, Germany

Definition:
The IT Services market encompasses a wide range of services used by organizations to create, manage, and deliver information, and it includes services that provide assistance with various other business functions. The primary goal of IT services is to ensure that information technology infrastructure, applications, and systems are effectively implemented, operated, and optimized to support an organization's business objectives and requirements. The specific range of services offered may vary depending on the service provider and the client's requirements.

Structure:

IT Services contains four distinct markets that are based on different services:

IT Consulting & Implementation covers advisory services that help businesses evaluate their technology strategies and align them with their business strategies or internal processes.
Business Process Outsourcing (BPO) refers to the transfer of entire business processes or individual activities from a company to a third party and is often IT based. BPO covers a wide variety of business processes, usually either in the back office (e.g., human resources) or in the front office (e.g., customer service in call centers).
IT Outsourcing refers to the external contracting of all IT-related services instead of relying on company-owned resources. In an IT context, these activities include IT administration, IT application, and web hosting services.
The Other IT Services market covers revenues for areas that are not specifically mentioned in the other markets, such as system integration, software installation and support, and IT education and training.

Additional Information:

The IT Services market comprises revenues, revenue change, average spend per employee, and a list of the key players in the market and their consolidated revenues. 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, Cognizant, Hewlett Packard Enterprise, and TCS.

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Analyst Opinion

Japan, known for its technological advancements, has a thriving IT Services market that has been growing at a steady pace over the years.

Customer preferences: In Japan, customers prefer IT services that are innovative, efficient, and reliable. They also value customer service and support, which is why IT service providers must ensure that they provide excellent customer service to maintain customer loyalty.

Trends in the market: One of the trends in the IT Services market in Japan is the rise of cloud computing services. With the increase in remote work and the need for data storage and management, cloud computing has become a popular choice for businesses. Another trend is the adoption of artificial intelligence (AI) and machine learning (ML) technologies in various industries. These technologies are being used to automate processes, improve efficiency, and provide better customer experiences.

Local special circumstances: Japan has a unique business culture that values long-term relationships and trust. IT service providers must understand and respect this culture to succeed in the market. Additionally, the Japanese government has been promoting digital transformation and investing in IT infrastructure to drive economic growth.

Underlying macroeconomic factors: The Japanese economy has been recovering from the effects of the COVID-19 pandemic, with the government implementing stimulus measures to support businesses and consumers. This has led to an increase in demand for IT services, as businesses look for ways to adapt to the new normal. The aging population and the shortage of skilled workers in Japan have also contributed to the growth of the IT Services market, as companies look for ways to automate processes and improve productivity.

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.