IT Outsourcing - Czechia

Czechia

Revenue in the IT Outsourcing market is projected to reach US$2.28bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.01%, resulting in a market volume of US$3.51bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$424.80 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 Czechia has been growing rapidly in recent years, making it one of the most attractive destinations for outsourcing services in Europe.

Customer preferences: One of the main reasons for this growth is the country's highly skilled workforce, which is known for its technical expertise and proficiency in English. Czechia is also located in a convenient time zone, making it easier for companies in Western Europe to communicate and collaborate with their outsourcing partners. Additionally, the country offers competitive prices for outsourcing services, making it an attractive option for companies looking to save costs while maintaining high quality standards.

Trends in the market: One trend that has been observed in the Czech IT Outsourcing market is the increasing demand for nearshoring services. This involves outsourcing services to countries that are geographically close to the client's home country, offering the benefits of outsourcing without the challenges of operating in a distant time zone or cultural environment. Czechia's proximity to major Western European markets, combined with its technical expertise, make it an ideal destination for nearshoring services.Another trend in the Czech IT Outsourcing market is the growing demand for specialized services. As companies become more focused on innovation and digital transformation, they are increasingly looking for outsourcing partners that can offer specialized expertise in areas such as cloud computing, big data analytics, and artificial intelligence. Czechia's highly skilled workforce and advanced technical infrastructure make it an ideal destination for companies looking for specialized outsourcing services.

Local special circumstances: One of the unique characteristics of the Czech IT Outsourcing market is the strong presence of small and medium-sized enterprises (SMEs). These companies often specialize in niche areas and offer highly specialized services that are in high demand in the global market. Additionally, Czechia has a vibrant startup ecosystem, with many innovative companies developing cutting-edge technologies that are attracting the attention of investors and clients from around the world.

Underlying macroeconomic factors: Czechia's strong economic growth and stable political environment have also contributed to the growth of the IT Outsourcing market. The country's membership in the European Union and its adoption of the euro have made it an attractive destination for foreign investment, while its well-developed infrastructure and skilled workforce have made it an ideal location for outsourcing services. Overall, the Czech IT Outsourcing market is expected to continue to grow in the coming years, driven by increasing demand for specialized services and the country's favorable business environment.

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.