Ahmed Sherif
Research expert covering IT services and gaming hardware
IT outsourcing industry - statistics & facts
In today's fast-paced digital landscape, businesses are increasingly turning to external partners to unlock innovation and efficiency — enter Information Technology Outsourcing (ITO). IT outsourcing refers to contracting portions of work that may typically be performed internally, such as business processes, application services, and infrastructure solutions, to outside suppliers or service providers. Moreover, it is possible to outsource entire IT departments, often to large companies, allowing organizations to reduce operational costs and focus on their core tasks. Professional services organizations primarily sell technology or IT consulting, making information technology outsourcing the largest share of the industry.
Automation is also among the trends shaping the IT outsourcing landscape because of its ability to supplement or replace traditional outsourcing services. IT automation technology was the most popular IT trend implemented in North American and European organizations in 2024. Advancements in chatbots, artificial intelligence (AI), and machine learning have also improved workflow productivity and error prevention.
Overall, the IT outsourcing industry is set to grow rapidly in the coming years, especially with increased corporate interest in digital transformation and automation.
The IT outsourcing industry continues to thrive
Figures estimating the market size of IT outsourcing vary depending on how particular sources define “outsourcing” and the type of industries, services, and segments included. Statista's Technology Market Insights divides the IT outsourcing market into administration outsourcing, application outsourcing, web hosting, and other IT outsourcing. In total, these segments accounted for a combined revenue of over 540 billion U.S. dollars in 2024 and is set to increase in the coming years. Importantly, services such as cloud computing and its sub-segments, such as software as a service (SaaS), are adjacent services but are considered part of the core service of IT outsourcing.Managed services remain a core component of ITO
Managed services, a key component of IT outsourcing, refers to the practice of outsourcing the entire responsibility of certain IT functions to specialized Managed Service Providers (MSPs). MSPs offer comprehensive and proactive management of IT infrastructure while general IT outsourcing is more about subcontracting specific IT functions. The scope of managed services can range from IT infrastructure and network management, cybersecurity, data backup, and cloud services among other IT needs. Particularly, when it comes to IT security, the managed cybersecurity services market was valued at nearly 25 billion U.S. dollars in 2024.Everything as a service and the future of IT outsourcing
There is no doubt that digital transformation efforts have been accelerating IT outsourcing. A major aspect of this is cloud computing, with market segments like infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS), which provide some of the IT outsourcing services more conveniently and at a lower cost. Accordingly, the total contract value of the global “as-a-service” market has now exceeded several tens of billion U.S. dollars annually.Automation is also among the trends shaping the IT outsourcing landscape because of its ability to supplement or replace traditional outsourcing services. IT automation technology was the most popular IT trend implemented in North American and European organizations in 2024. Advancements in chatbots, artificial intelligence (AI), and machine learning have also improved workflow productivity and error prevention.
Overall, the IT outsourcing industry is set to grow rapidly in the coming years, especially with increased corporate interest in digital transformation and automation.
