IT Outsourcing - Costa Rica

Costa Rica

Revenue in the IT Outsourcing market is projected to reach US$215.40m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.41%, resulting in a market volume of US$337.70m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$83.32 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

Costa Rica, a country known for its beautiful beaches, lush rainforests, and diverse wildlife, has become a popular destination for IT outsourcing in recent years.

Customer preferences: One of the main reasons for this trend is the preference of many companies for nearshore outsourcing. Costa Rica's location in Central America allows it to offer convenient time zones and easy travel for clients in North America. Additionally, Costa Rica's highly educated workforce is proficient in English and Spanish, making communication with clients seamless.

Trends in the market: The IT outsourcing market in Costa Rica has seen significant growth in recent years, with many multinational companies setting up operations in the country. One trend that has emerged is the increasing demand for software development services. Costa Rica has a strong talent pool in this area, and many companies are taking advantage of this expertise. Another trend is the growth of the business process outsourcing (BPO) industry, with companies outsourcing services such as customer service, accounting, and human resources to Costa Rica.

Local special circumstances: Costa Rica has several factors that make it an attractive location for IT outsourcing. One of the most significant is the country's stable political and economic environment. Costa Rica has a long history of democracy and has a highly educated workforce, with a literacy rate of over 97%. Additionally, the government has made significant investments in education and infrastructure, including high-speed internet and modern office spaces.

Underlying macroeconomic factors: The growth of the IT outsourcing market in Costa Rica is also driven by macroeconomic factors. The country has a favorable business climate, with low taxes and a streamlined bureaucracy. Additionally, Costa Rica has free trade agreements with several countries, including the United States, which has helped to attract foreign investment. The country's proximity to the United States also makes it an attractive location for companies looking to outsource IT services.In conclusion, the IT outsourcing market in Costa Rica is thriving due to the country's location, highly educated workforce, stable political and economic environment, and favorable business climate. As the demand for software development and BPO services continues to grow, Costa Rica is well-positioned to continue its success in the IT outsourcing industry.

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.