IT Outsourcing - Southeast Asia

Southeast Asia

Revenue in the IT Outsourcing market is projected to reach US$11.35bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 10.05%, resulting in a market volume of US$18.32bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$32.67 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

Southeast Asia is experiencing a significant growth in its IT Outsourcing market, driven by various factors contributing to the development of the industry.

Customer preferences: The increasing demand for customized software development solutions is driving the IT Outsourcing market in Southeast Asia. Customers are looking for cost-effective and high-quality software development services, which are readily available in the region. The region's IT Outsourcing market is also benefiting from the increasing preference for cloud-based solutions, which is driving the demand for software development services.

Trends in the market: The IT Outsourcing market in Southeast Asia is experiencing a trend towards more complex software development projects, as customers are seeking solutions that are tailored to their specific needs. The market is also experiencing a shift towards more agile development methodologies, which enable faster delivery of software solutions.

Local special circumstances: The IT Outsourcing market in Southeast Asia is characterized by a highly skilled workforce, which is capable of delivering high-quality software development solutions. The region's IT Outsourcing market is also benefiting from the availability of advanced technology infrastructure, which is enabling companies to deliver cutting-edge software solutions.

Underlying macroeconomic factors: The IT Outsourcing market in Southeast Asia is benefiting from various macroeconomic factors, such as the region's favorable business environment, which is attracting foreign investment. The region's IT Outsourcing market is also benefiting from the availability of a large pool of skilled IT professionals, which is enabling companies to deliver high-quality software development solutions. Additionally, the region's IT Outsourcing market is benefiting from the availability of cost-effective labor, which is making it an attractive destination for 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.