IT Outsourcing - North America

North America

Revenue in the IT Outsourcing market is projected to reach US$202.00bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 10.75%, resulting in a market volume of US$303.90bn by 2028.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$803.50 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

The demand for IT outsourcing services in North America has been steadily increasing over the years, driven by factors such as cost savings, access to specialized skills, and the need for flexibility in managing IT operations.

Customer preferences: North American businesses are increasingly turning to outsourcing as a means of reducing costs and improving operational efficiency. Companies are looking to take advantage of the lower labor costs and greater access to specialized skills that outsourcing can provide. Additionally, businesses are seeking greater flexibility in managing their IT operations, and outsourcing allows them to scale up or down as needed.

Trends in the market: One of the major trends in the North American IT outsourcing market is the growing adoption of cloud-based services. Cloud computing has become increasingly popular in recent years, and many businesses are now looking to outsource their IT operations to cloud service providers. This trend is being driven by the need for greater flexibility, scalability, and cost savings.Another trend in the market is the rise of nearshore outsourcing. Many North American businesses are now looking to outsource their IT operations to countries in the same time zone, such as Mexico and Canada. Nearshore outsourcing offers many of the same benefits as offshore outsourcing, such as lower labor costs and access to specialized skills, but with the added benefit of being in the same time zone.

Local special circumstances: One of the unique aspects of the North American IT outsourcing market is the prevalence of onshore outsourcing. Many businesses are choosing to outsource their IT operations to companies within the United States or Canada, rather than offshore to countries such as India or China. This is due in part to concerns over data security and intellectual property protection, as well as the desire to work with companies that are closer to home.

Underlying macroeconomic factors: The North American IT outsourcing market is being driven by a number of macroeconomic factors, including the increasing use of technology in business operations, the need for cost savings and efficiency, and the growing demand for specialized skills. Additionally, the rise of cloud computing and nearshore outsourcing is being driven by the need for greater flexibility and scalability in managing IT operations. As these trends continue to evolve, we can expect to see continued growth in the North American IT outsourcing market.

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.