IT Outsourcing - Hong Kong

Hong Kong

Revenue in the IT Outsourcing market is projected to reach US$2.90bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 12.10%, resulting in a market volume of US$4.58bn by 2028.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$757.40 in 2024.
In global comparison, most revenue will be generated in the United States (US$185.50bn 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

Hong Kong, a bustling city known for its skyscrapers, is also a hub for the IT Outsourcing market.

Customer preferences: Hong Kong's IT Outsourcing market has been growing at a steady pace due to the increasing demand for digital transformation and the adoption of cloud computing. This has led to businesses preferring to outsource their IT needs to third-party vendors rather than in-house development.

Trends in the market: One of the trends in the IT Outsourcing market in Hong Kong is the shift towards more specialized services. Companies are now looking for vendors that can provide more than just basic IT services but also specialized services such as cybersecurity, data analytics, and cloud migration. This is due to the increasing importance of data privacy and security, which has become a major concern for businesses in Hong Kong. Another trend is the increasing adoption of artificial intelligence (AI) and machine learning (ML) technologies, which has led to businesses outsourcing their AI and ML development needs to vendors.

Local special circumstances: Hong Kong's proximity to China has made it an attractive destination for businesses looking to outsource their IT needs. Many Chinese companies have set up their IT operations in Hong Kong to take advantage of the city's favorable business environment and proximity to the Chinese market. Additionally, Hong Kong's well-developed infrastructure and skilled workforce have made it an attractive destination for IT Outsourcing.

Underlying macroeconomic factors: The IT Outsourcing market in Hong Kong has been driven by several macroeconomic factors. One of the factors is the increasing demand for digital transformation, which has led to businesses outsourcing their IT needs to third-party vendors. Another factor is the increasing adoption of cloud computing, which has made it easier for businesses to outsource their IT needs. Additionally, the ongoing trade tensions between China and the US have led to many businesses in Hong Kong looking to diversify their operations, which has led to an increase in the demand for IT Outsourcing services.

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.