IT Outsourcing - Denmark

Denmark

Revenue in the IT Outsourcing market is projected to reach US$4.79bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 7.88%, resulting in a market volume of US$7.00bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$1.47k 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

Denmark, known for its high-tech industries and skilled workforce, has been a popular destination for IT outsourcing.

Customer preferences: Danish companies have been outsourcing their IT needs to reduce costs and increase efficiency. They prefer to work with companies that offer high-quality services, have a good reputation, and are located in a nearby time zone. Many Danish companies also prioritize environmental sustainability and social responsibility, and hence prefer to work with companies that share their values.

Trends in the market: One of the major trends in the IT outsourcing market in Denmark is the increasing demand for cloud-based services. This is driven by the need for flexibility, scalability, and cost-effectiveness. Another trend is the growing importance of cybersecurity, as companies become more aware of the risks associated with data breaches and cyber attacks. Danish companies are also increasingly outsourcing their non-core IT functions, such as infrastructure management and application development, to specialized service providers.

Local special circumstances: Denmark has a highly skilled workforce and a business-friendly environment, which makes it an attractive location for IT outsourcing. However, the country also has a relatively high cost of living and labor, which can make outsourcing more expensive compared to other locations. Additionally, Danish companies have high standards for data privacy and security, which can make it challenging for foreign service providers to comply with local regulations.

Underlying macroeconomic factors: The IT outsourcing market in Denmark is influenced by various macroeconomic factors, such as the country's GDP growth, labor market conditions, and technological advancements. The COVID-19 pandemic has also had an impact on the market, as companies have accelerated their digital transformation efforts and increased their reliance on remote work and cloud-based services. The Danish government's focus on promoting innovation and digitalization is expected to further drive the growth of the IT outsourcing market in the country.

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.