IT Outsourcing - Central America

Central America

Revenue in the IT Outsourcing market is projected to reach US$852.60m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 10.01%, resulting in a market volume of US$1,374.00m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$36.46 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

Central America, a region known for its beautiful beaches, diverse culture, and delicious cuisine, has been experiencing a growing trend in the IT Outsourcing market.

Customer preferences: One of the reasons for this trend is the increasing demand for cost-effective and efficient IT services among businesses in Central America. Many companies in the region are looking to outsource their IT needs to reduce costs and improve their operational efficiency. Additionally, the availability of skilled IT professionals in the region is another factor that is driving the growth of the IT Outsourcing market in Central America.

Trends in the market: In recent years, countries like Costa Rica, Panama, and Nicaragua have emerged as popular destinations for IT Outsourcing. These countries offer a favorable business environment, modern infrastructure, and a highly educated workforce, making them attractive to businesses looking to outsource their IT needs. Furthermore, the adoption of cloud computing technology and the growing demand for mobile applications are also driving the growth of the IT Outsourcing market in the region.

Local special circumstances: Each country in Central America has its own unique set of circumstances that contribute to the growth of the IT Outsourcing market. For example, Costa Rica has a stable political environment, a highly educated workforce, and a favorable business climate that make it an attractive destination for IT Outsourcing. On the other hand, Nicaragua offers low labor costs and a growing pool of skilled IT professionals, making it an attractive destination for businesses looking for cost-effective IT solutions.

Underlying macroeconomic factors: The growth of the IT Outsourcing market in Central America can also be attributed to underlying macroeconomic factors such as government policies, trade agreements, and foreign investment. For example, many countries in the region have implemented policies to promote foreign investment and create a favorable business environment. Additionally, trade agreements such as CAFTA-DR (Central America-Dominican Republic Free Trade Agreement) have helped to increase trade and investment in the region, creating more opportunities for businesses to outsource their IT needs. In conclusion, the IT Outsourcing market in Central America is experiencing a growing trend due to a combination of factors including customer preferences, local special circumstances, and underlying macroeconomic factors. As the demand for cost-effective and efficient IT services continues to grow, it is likely that the IT Outsourcing market in Central America will continue to expand in the coming years.

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.