IT Outsourcing - Australia & Oceania

Australia & Oceania

Revenue in the IT Outsourcing market is projected to reach US$15.14bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.49%, resulting in a market volume of US$22.76bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$711.80 in 2024.
In global comparison, most revenue will be generated in the United States (US$197.30bn 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 IT Outsourcing market in Australia & Oceania has been growing steadily in recent years.

Customer preferences: Customers in Australia & Oceania are increasingly looking for outsourcing solutions that can provide them with higher quality services at a lower cost. This has led to an increase in demand for IT outsourcing services, particularly in the areas of software development, cloud computing, and cybersecurity.

Trends in the market: One of the key trends in the IT outsourcing market in Australia & Oceania is the growing popularity of nearshoring. This involves outsourcing IT services to countries that are geographically close to Australia & Oceania, such as Indonesia, Malaysia, and the Philippines. This trend is being driven by the desire to reduce costs while still maintaining close proximity to the outsourcing provider.Another trend in the market is the increasing use of automation and artificial intelligence (AI) in IT outsourcing. This is particularly evident in the area of software development, where AI is being used to automate many of the repetitive tasks involved in the software development process. This trend is expected to continue as more companies look to streamline their IT operations and reduce costs.

Local special circumstances: One of the key challenges facing the IT outsourcing market in Australia & Oceania is the shortage of skilled IT professionals in the region. This has led to a situation where many companies are struggling to find the right talent to meet their IT outsourcing needs. To address this challenge, many companies are turning to outsourcing providers in other countries, such as India and China, where there is a larger pool of skilled IT professionals.

Underlying macroeconomic factors: The IT outsourcing market in Australia & Oceania is being driven by a number of macroeconomic factors, including the growing demand for digital transformation, the increasing adoption of cloud computing, and the need for cybersecurity services. These factors are expected to continue to drive growth in the IT outsourcing market in the region in the coming years. Additionally, the ongoing COVID-19 pandemic has accelerated the shift towards remote work and digitalization, which is expected to further fuel demand for IT outsourcing services in the region.

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.