IT Outsourcing - Puerto Rico

Puerto Rico

Revenue in the IT Outsourcing market is projected to reach US$244.30m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 7.39%, resulting in a market volume of US$348.90m by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$211.30 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

Puerto Rico, an unincorporated territory of the United States, has seen a steady growth in its IT Outsourcing market in recent years.

Customer preferences: The primary reason for this growth is the increasing demand for IT services by businesses in the region. Many companies in Puerto Rico are looking to reduce costs and improve efficiency, and outsourcing IT services has become an attractive option. Additionally, the availability of a skilled workforce and a favorable business environment have also contributed to the growth of the IT Outsourcing market.

Trends in the market: One of the major trends in the IT Outsourcing market in Puerto Rico is the increasing demand for cloud computing services. Many companies are looking to move their IT infrastructure to the cloud to reduce costs and improve scalability. This has led to an increase in demand for cloud-based services such as Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS).Another trend in the market is the growing demand for cybersecurity services. With the increasing number of cyber threats, many businesses in Puerto Rico are looking to strengthen their cybersecurity defenses. This has led to an increase in demand for services such as network security, data encryption, and threat intelligence.

Local special circumstances: Puerto Rico's status as an unincorporated territory of the United States has created some unique challenges for the IT Outsourcing market. For example, the island's infrastructure has been severely impacted by natural disasters such as Hurricane Maria in 2017, which has made it difficult for businesses to operate. Additionally, the island's debt crisis has also had an impact on the business environment.

Underlying macroeconomic factors: Despite these challenges, the IT Outsourcing market in Puerto Rico has continued to grow. One of the underlying macroeconomic factors driving this growth is the region's favorable tax incentives. Puerto Rico offers a range of tax incentives to businesses, including a 4% corporate tax rate and a 0% tax rate on capital gains. This has made it an attractive location for businesses looking to reduce costs.Overall, the IT Outsourcing market in Puerto Rico is expected to continue to grow in the coming years, driven by the increasing demand for cloud computing and cybersecurity services, as well as the region's favorable business environment and tax incentives.

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.