IT Outsourcing - GCC

Revenue in the IT Outsourcing market is projected to reach US$3.19bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.24%, resulting in a market volume of US$4.74bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$101.30 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 demand for IT outsourcing services in the GCC region has been steadily increasing in recent years.

Customer preferences: Customers in the GCC region are increasingly looking for cost-effective and efficient IT solutions. Outsourcing IT services to specialized companies has become a popular option for businesses looking to reduce costs and improve their operational efficiency. Additionally, many companies in the region are looking for specialized IT services that are not available locally and are turning to outsourcing to meet their needs.

Trends in the market: One of the major trends in the IT outsourcing market in the GCC region is the growing demand for cloud computing services. As businesses in the region continue to grow, they are looking for more flexible and scalable IT solutions that can be easily adapted to their changing needs. Cloud computing services offer a cost-effective and efficient way to manage IT infrastructure, making them an attractive option for businesses of all sizes.Another trend in the market is the increasing use of artificial intelligence (AI) and machine learning (ML) technologies. As businesses in the region look for ways to improve their operational efficiency and gain a competitive edge, they are turning to these advanced technologies to automate routine tasks and improve decision-making processes.

Local special circumstances: One of the unique challenges facing the IT outsourcing market in the GCC region is the need to navigate complex regulatory environments. Each country in the region has its own set of regulations and requirements governing the use of IT services, making it difficult for businesses to navigate the market. Additionally, there is a shortage of skilled IT professionals in the region, which can make it difficult for businesses to find the right talent to meet their needs.

Underlying macroeconomic factors: The growth of the IT outsourcing market in the GCC region can be attributed to a number of underlying macroeconomic factors. The region's strong economic growth and increasing investment in technology infrastructure have created a favorable environment for IT outsourcing services. Additionally, the region's young and tech-savvy population has created a strong demand for advanced IT solutions, driving growth in the market. Finally, the region's strategic location at the crossroads of Europe, Asia, and Africa has made it an attractive destination for businesses looking to expand their operations 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.