IT Services Outsourcing Market Overview
The global IT Services Outsourcing Market size was valued at USD 525.2 billion in 2021 and is projected to reach USD 905.9 billion by 2028, growing at a CAGR of 8.1 % during the forecast period.
IT services outsourcing is a contractual arrangement in which IT service providers have entire ownership and control over the infrastructure and companies outsource some of their software development in order to save costs and maintain complete control over all operations. The rising focus on the increasing task efficiency of core tasks at low prices is primarily driving the market demand. Factors such as rising concern for customer-centricity and data security in projects, growing utilization across various verticals, and rising digital transformation are contributing to market growth around the world. In addition, the increasing need for competent formulating and streamlining of IT strategy, portfolio consulting, and enterprise architecture advisory further augments the industry growth. The surging demand for efficiency and scalable IT infrastructure, as well as rising inclination towards the cloud and adoption of virtualized infrastructure, are also creating various lucrative opportunities in the foreseen period.
COVID-19 Impact Analysis
The emergence of COVID-19 across the globe has highly affected almost every sector of the economy and capital investments across various verticals. The IT services outsourcing market also considerably grew during this outbreak owing to the rising shift towards IT services and digitalization. During this period, various government bodies worldwide executed strict lockdown procedures and social distancing norms that halted various production and other business activities. Accordingly, the population is inclined towards digital platforms to carry out their business performances. The IT outsourcing service gains huge prominence because these services frequently offer maintenance and part of development work to third parties. Thus, the widespread coronavirus has exhibited a positive influence on the growth of the market.
IT Services Outsourcing Market Segmentation:
The global IT Services Outsourcing Market is segmented on the basis of Service (Application services, Emerging technology services, Data center operations, Helpdesk services, Infrastructure capacity services, Managed security operations, Network Operations, and Others), on the basis of Location (On-shore, Off-shore), on the basis of End-use (Aerospace & Defense, BFSI, Healthcare, Retail & E-commerce, Telecom & Media, Others)
The off-shore segment is expected to be the largest segment of the IT Services Outsourcing Market
Based on location, the market has been classified into on-shore and off-shore locations. The offshore is dominating the market with the highest shares in terms of revenue in 2021. The growth of the segment is attributed to factors such as growing investment in R&D activities, rising preference for IT outsourcing services, and high availability of skilled talent and low-cost labor in emerging countries. Moreover, information technology operations in offshoring offer various cost benefits, eliminating the incidences of currency risks, and meeting offset obligations are projected to witness a shift in trend for penetrating IT services outsourcing in offshore locations. Therefore, these factors are propelling the growth of the segment around the world.
Retail & e-commerce is expected to record the fastest growth during the forecasted period
On the basis of End-use, the retail & e-commerce segment is exhibiting a substantial CAGR over the forthcoming years due to the rising number of start-ups focusing on deploying an online shopping platform for customers. In addition, the growing spending on technological developments in order to facilitate customized shopping experiences through Virtual Reality (VR), Artificial Intelligence (AI), and deep learning techniques are also supporting the growth. Thus, the rapid digital transformation in organizations assists in the introduction of creative applications and extensions, which supports retail & e-commerce to grow extensively.
IT Services Outsourcing Market Dynamics:
Drivers:
Rising inclination towards cloud and adoption of virtualized infrastructure
The growing trends of digitalization have shown a rapid shift towards cloud-based platforms and the proliferation of software, which allows outsourcing customers to relocate funds from low-value assets to specialized workers while concentrating on more customizable, adaptable, and evolutionary solutions. IT outsourcing has historically been physical, involving the deployment of servers, data centers, networks, man-hours, specifications, and various lines of code but the emergence of cloud-based services offers greater flexibility and asset-free IT services and enables businesses to access and pay for IT services. Accordingly, the rising focus on cost optimization is a key component that boosts the outsourcing of cloud services and enables many providers to increase concentration risk. As per Flexera’s State of the Cloud Report for 2021, 36% of businesses indicated their annual spending on the cloud reached around USD 12 million, and 83% stated that their expenditure on the cloud surpassed USD 1.2 million. This was a substantial improvement over the previous year, in which 20% of businesses claimed to spend more than USD 12 million per annum and 74% estimated to spend above USD 1.2 million annually. Hence, the increasing penetration and expenditure on the cloud are acting as catalyzing factors for the growth of the market over the forthcoming years.
Regional Analysis:
Asia-Pacific IT Services Outsourcing Market is expected to grow with the highest CAGR over the forecasting years
The Asia Pacific is expected to account for the fastest-growing region in terms of market size over the forecasting years. The increased growing preference for advanced digital transformation and penetrating effective digital solutions, coupled with the increasing industry expansion. The rising number of initiatives among businesses and IT service providers, along with cost efficiency, time management, improved quality, and accessibility to skilled and competent developers, is leading software development as one of the major IT tasks, which is outsourced to various countries in this region. China is estimated to account for the largest regional market shares because the low development costs are acting an essential role in maintaining the primary uses of outsourcing applications. In addition, the region is attracting various global companies owing to its potential to become one of the lucrative outsourcing markets. Moreover, IT outsourcing companies have been intensifying their business operations worldwide subsequent to the increasing demand for skilled software developers, which also supports India’s dominance among the top IT outsourcing destinations. Therefore, the rapid development of the regional emerging economies is fueling the growth of the IT service outsourcing market.
Furthermore, Europe is also developing at a significant rate due to the growing demand for subcontracting services in the region because of market saturation, fierce competition, and challenging economic conditions. Also, the increasing technological developments and rising investments across various verticals are further anticipated to drive the growth of the regional market during the estimated years.
Key Market Players and Competitive Landscape
Some of the key market players operating in the global IT Services Outsourcing Market are:
- Accenture PLC (Ireland)
- International Business Machines (IBM) Corporation (US)
- Fujitsu Limited (Japan)
- Hewlett Packard Enterprise Development LP (US)
- SAP SE (Germany)
- Capgemini SE (France)
- Cognizant (US)
- Infosys Limited (India)
- NTT Data Corporation (Japan)
- Oracle Corporation (US)
The Beyond Market Insights research has segmented the Global IT Services Outsourcing Market report on the basis of Service, Location, End Use, and region:
IT Services Outsourcing Market, Service Outlook:
- Application services
- Emerging technology services
- Data center operations
- Helpdesk services
- Infrastructure capacity services
- Managed security operations
- Network operations
- Others
IT Services Outsourcing Market, Location Outlook
IT Services Outsourcing Market, End-use Outlook
- Aerospace & Defense
- BFSI
- Healthcare
- Retail & e-commerce
- Telecom & Media
- Others
IT Services Outsourcing Market, Regional Outlook
- North America
- Europe
- France
- Germany
- United Kingdom
- Italy
- Rest of the Europe
- Asia Pacific
- China
- India
- Japan
- South Korea
- Australia
- Rest of the APAC
- Latin America
- Mexico
- Brazil
- Rest of Latin America
- Middle East & Africa
- UAE
- Saudi Arabia
- Israel
- South Africa
- Rest of the Middle East & Africa
Table of Content
IT Services Outsourcing Market Size, Share, Growth, and Forecast Report
1. Introduction
1.1. Report Description
1.1.1. Aim of the Report
1.1.2. Prospective Audience
1.1.3. Unique Selling Prepositions and Key Takeaways from the Report
1.2. Scope of the Research Study
1.3. Approach/Research Methodology
1.3.1. Secondary Research
1.3.2. Primary Research
1.3.3. Expert Panel Review
1.3.4. Market Data Breakdown and Data Triangulation
1.3.5. Research Approach for Market Size Estimation
1.3.5.1. Top-Down Approach
1.3.5.2. Bottom-Up Approach
1.3.6. Key Assumptions
1.4. Market Segmentation
1.4.1. Service
1.4.2. Location
1.4.3. End-use
2. IT Services Outsourcing Market Overview
2.1. Introduction
2.2. Analysis by Service, 2016-2028 (US$ Million)
2.3. Analysis by End-use, 2016-2028 (US$ Million)
2.4. Analysis by Location, 2016-2028 (US$ Million)
2.5. Market Analysis by Region, 2016-2028 (US$ Million)
3. IT Services Outsourcing Market Dynamics
3.1. Introduction
3.2. Growth Drivers
3.3. Growth Restraints
3.4. Growth Opportunities
3.5. Porter’s Five Forces Analysis
3.5.1. Threat of New Entrants
3.5.2. Bargaining Power of Buyers/Consumers
3.5.3. Bargaining Power of Suppliers
3.5.4. Threat of Substitute Services
3.5.5. Intensity of Competitive Rivalry
3.6. Attractiveness Analysis
3.6.1. Service
3.6.2. Location
3.6.3. End-use
3.6.4. Region
3.7. Value Chain Analysis
4. IT Services Outsourcing Market Competition Analysis
4.1. IT Services Outsourcing Market Share Analysis by Company, 2019 – 2021
4.1.1. Top 3 Players, 2019 – 2021
4.1.2. Top 6 Players, 2019 – 2021
4.2. Strategic Initiatives
4.2.1. New Products Launch
4.2.2. Mergers/Acquisitions
4.2.3. Agreement and Collaborations
4.2.4. Partnerships, Joint Ventures, Expansion, and Distribution
5. Global IT Services Outsourcing Market Analysis by Service and End-use, 2016-2028 (US$ Million)
5.1. Service
5.1.1. Global IT Services Outsourcing Market Share, by Service, 2021 and 2028
5.1.2. Global IT Services Outsourcing Market Revenue, by Service, 2016-2028 (US$ Million)
5.1.3. By Application services Market Analysis 2016-2028 (US$ Million)
5.1.4. By Emerging technology services Market Analysis 2016-2028 (US$ Million)
5.1.5. By Data center operations Market Analysis 2016-2028 (US$ Million)
5.1.6. By Helpdesk services Market Analysis 2016-2028 (US$ Million)
5.1.7. By Infrastructure capacity services Market Analysis 2016-2028 (US$ Million)
5.1.8. By Managed security operations Market Analysis 2016-2028 (US$ Million)
5.1.9. By Network operations Market Analysis 2016-2028 (US$ Million)
5.2. Location
5.2.1. Market Share, by Location, 2021 and 2028
5.2.2. Market Revenue, by Location, 2016-2028 (US$ Million)
5.2.3. By On-shore Market Analysis 2016-2028 (US$ Million)
5.2.4. By Off-shore Market Analysis 2016-2028 (US$ Million)
5.3. End-use
5.3.1. Market Share, by End-use, 2021 and 2028
5.3.2. Market Revenue, by End-use, 2016-2028 (US$ Million)
5.3.3. By Aerospace & Defense Market Analysis 2016-2028 (US$ Million)
5.3.4. By BFSI Market Analysis 2016-2028 (US$ Million)
5.3.5. By Healthcare Market Analysis 2016-2028 (US$ Million)
5.3.6. By Retail & e-commerce Market Analysis 2016-2028 (US$ Million)
5.3.7. By Telecom & Media Market Analysis 2016-2028 (US$ Million)
6. Global IT Services Outsourcing Market Service Analysis by Region, 2016-2028 (US$ Million)
6.1. App Service Market Analysis 2016-2028 (US$ Million)
6.1.1. North America
6.1.2. Europe
6.1.3. Asia Pacific
6.1.4. Latin America
6.1.5. Middle East & Africa
6.2. Emerging technology Market Analysis 2016-2028 (US$ Million)
6.3. Data Center Operations Market Analysis 2016-2028 (US$ Million)
6.4. Helpdesk Services Market Analysis 2016-2028 (US$ Million)
6.5. Infrastructure capacity services Market Analysis 2016-2028 (US$ Million)
6.6. Managed security operations Market Analysis 2016-2028 (US$ Million)
6.7. Network operations Market Analysis 2016-2028 (US$ Million)
6.8. Other Services Market Analysis 2016-2028 (US$ Million)
7. Global IT Services Outsourcing Market Location Analysis by Region, 2016-2028 (US$ Million)
7.1. On-shore Market Analysis 2016-2028 (US$ Million)
7.1.1. North America
7.1.2. Europe
7.1.3. Asia Pacific
7.1.4. Latin America
7.1.5. Middle East & Africa
7.2. Off-shore Market Analysis 2016-2028 (US$ Million)
8. Global IT Services Outsourcing Market End-use Analysis by Region, 2016-2028 (US$ Million)
8.1. Aerospace & Defense Market Analysis 2016-2028 (US$ Million)
8.1.1. North America
8.1.2. Europe
8.1.3. Asia Pacific
8.1.4. Latin America
8.1.5. Middle East & Africa
8.2. BFSI Market Analysis 2016-2028 (US$ Million)
8.3. Healthcare Market Analysis 2016-2028 (US$ Million)
8.4. Retail & e-commerce Market Analysis 2016-2028 (US$ Million)
8.5. Telecom & Media Market Analysis 2016-2028 (US$ Million)
9. IT Services Outsourcing Market Analysis by Geography, 2016-2028 (US$ Million)
9.1. North America IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.1.1. U.S. IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.1.1.1. Service
9.1.1.2. Location
9.1.1.3. End-use
9.1.2. Canada IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.1.3. Mexico IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2. Europe IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2.1. UK IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2.1.1. Service
9.2.1.2. Location
9.2.1.3. End-use
9.2.2. France IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2.3. Germany IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2.4. Spain IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2.5. Russia IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2.6. Italy IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.2.7. Rest of Europe IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3. Asia Pacific IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.1. China IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.1.1. Service
9.3.1.2. Location
9.3.1.3. End-use
9.3.2. Japan IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.3. South Korea IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.4. India IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.5. Australia IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.6. Southeast Asia IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.7. Taiwan IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.3.8. Rest of Asia Pacific IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.4. Latin America IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.4.1. Brazil IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.4.1.1. Service
9.4.1.2. Location
9.4.1.3. End-use
9.4.2. Argentina IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.4.3. Rest of Latin America IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.5. Middle East IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.5.1. Israel IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.5.2. Turkey IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.5.3. Saudi Arabia IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.5.4. UAE IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.5.5. Rest of Middle East IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.6. Africa IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.6.1. Egypt IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.6.1.1. Service
9.6.1.2. Location
9.6.1.3. End-use
9.6.2. South Africa IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
9.6.3. Rest of Africa IT Services Outsourcing Market Analysis 2016-2028 (US$ Million)
10. Company Profiles
10.1. Accenture PLC (Ireland)
10.1.1. Company Overview
10.1.2. Financial Performance
10.1.3. Product Benchmarking
10.1.4. Strategic Initiatives
10.2. International Business Machines (IBM) Corporation (US)
10.3. Fujitsu Limited (Japan)
10.4. Hewlett Packard Enterprise Development LP (US)
10.5. SAP SE (Germany)
10.6. Capgemini SE (France)
10.7. Cognizant (US)
10.8. Infosys Limited (India)
10.9. NTT Data Corporation (Japan)
10.10. Oracle Corporation (US)
11. COVID-19 Impact Analysis
11.1. Global IT Services Outsourcing Market, 2020 – 2028, Pre-V/S Post COVID 19
11.2. Estimated Impact of The Coronavirus (Covid-19) Epidemic on the IT Services Outsourcing Market Size In 2022, By Scenario
11.3. Impact on Supply Chain and Production in IT Services Outsourcing Market
11.4. Impact on Import and Export
12. Import-Export Analysis
12.1. North America IT Services Outsourcing Import-Export, 2016 – 2021
12.2. Europe IT Services Outsourcing Import-Export, 2016 – 2021
12.3. Asia Pacific IT Services Outsourcing Import-Export, 2016 – 2021
12.4. Latin America IT Services Outsourcing Import-Export, 2016 – 2021
12.5. Middle East America IT Services Outsourcing Import-Export, 2016 – 2021
12.6. Africa IT Services Outsourcing Import-Export, 2016 – 2021
13. IT Services Outsourcing Marketing Channel Analysis
13.1. Marketing Channel
13.1.1. Direct Marketing
13.1.2. Indirect Marketing
13.1.3. Development Trend
13.2. Market Positioning
14. IT Services Outsourcing Manufacturing Cost Analysis
14.1. Key Raw Materials
14.2. Key Raw Material Suppliers
14.3. Market Concentration Rate
14.4. Manufacturing Cost Structure
14.5. Process Analysis
15. Conclusion
IT Services Outsourcing Market, Service Outlook:
- Application services
- Emerging technology services
- Data center operations
- Helpdesk services
- Infrastructure capacity services
- Managed security operations
- Network operations
- Others
IT Services Outsourcing Market, Location Outlook
IT Services Outsourcing Market, End-use Outlook
- Aerospace & Defense
- BFSI
- Healthcare
- Retail & e-commerce
- Telecom & Media
- Others
