IT Outsourcing - Asia

Asia

Revenue in the IT Outsourcing market is projected to reach US$113.90bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 11.38%, resulting in a market volume of US$175.30bn by 2028.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$143.90 in 2024.
In global comparison, most revenue will be generated in the United States (US$185.50bn 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

The demand for IT outsourcing services in Asia has been steadily increasing in recent years, driven by a variety of factors such as cost savings, access to specialized expertise, and the need for scalability.

Customer preferences: Many businesses in Asia are turning to IT outsourcing to reduce costs and improve efficiency. Outsourcing allows companies to access specialized expertise and technology that may not be available in-house, while also providing flexibility and scalability. Additionally, many businesses are looking to outsource non-core functions so they can focus on their core competencies.

Trends in the market: In China, the IT outsourcing market has been growing rapidly due to the country's large pool of skilled IT professionals and relatively low labor costs. Many multinational companies are setting up outsourcing centers in China to take advantage of these factors. In India, the IT outsourcing market remains strong, with the country being a major hub for software development and other IT services. However, there is increasing competition from other countries such as the Philippines and Vietnam, which offer lower labor costs and a growing pool of skilled IT professionals.

Local special circumstances: In Southeast Asia, the IT outsourcing market is also growing, with countries such as Vietnam, the Philippines, and Indonesia becoming increasingly popular outsourcing destinations. These countries offer a combination of low labor costs, a growing pool of skilled IT professionals, and favorable government policies. Additionally, many businesses in these countries are looking to expand their IT capabilities to stay competitive in the global market.

Underlying macroeconomic factors: The growth of the IT outsourcing market in Asia is being driven by a variety of macroeconomic factors, including increasing globalization, the rise of digital technology, and changing business models. As businesses become more globalized, they are looking for ways to reduce costs and improve efficiency, which is driving demand for outsourcing services. Additionally, the rise of digital technology has created new opportunities for outsourcing, particularly in areas such as software development, data analytics, and cloud computing. Finally, changing business models are also driving demand for outsourcing, as companies look to focus on their core competencies and outsource non-core functions to specialized providers.

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.