IT Outsourcing - United Arab Emirates

United Arab Emirates

Revenue in the IT Outsourcing market is projected to reach US$1.39bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.01%, resulting in a market volume of US$2.14bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$199.90 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 United Arab Emirates (UAE) is a growing market for IT outsourcing services, with increasing demand from both domestic and international clients.

Customer preferences: There is a growing trend of companies in the UAE outsourcing their IT services to reduce costs and improve efficiency. Many businesses prefer to outsource their IT needs to third-party providers, allowing them to focus on their core competencies and leave IT management to the experts. Additionally, the IT outsourcing market in the UAE is seeing an increase in demand for cloud-based services, as businesses seek to adopt more flexible and scalable IT solutions.

Trends in the market: One of the key trends in the IT outsourcing market in the UAE is the increasing demand for cybersecurity services. As businesses become more reliant on technology, the need to protect their sensitive data from cyber threats has become more important than ever. This has led to a growing demand for cybersecurity services such as threat detection and response, vulnerability management, and risk assessment.Another trend in the market is the rise of artificial intelligence (AI) and machine learning (ML) in IT outsourcing services. Many IT outsourcing providers in the UAE are now offering AI and ML solutions to help businesses automate their processes, improve decision-making, and reduce costs. This trend is expected to continue as AI and ML technologies become more advanced and widespread.

Local special circumstances: The UAE has a highly diversified economy with a strong focus on technology and innovation. The government has been actively promoting the development of the technology sector in the country, with initiatives such as the Dubai Smart City project and the Abu Dhabi Economic Vision 2030. These initiatives have helped to create a favorable environment for IT outsourcing providers in the UAE, with many international companies setting up operations in the country to take advantage of its business-friendly policies and infrastructure.

Underlying macroeconomic factors: The UAE has a stable political environment and a strong economy, with a GDP of over $400 billion. The country has a highly skilled workforce and a favorable business environment, which has attracted many international companies to set up operations in the country. Additionally, the UAE has a strategic location between Europe, Asia, and Africa, making it an ideal hub for businesses looking to expand their operations in these regions. These underlying macroeconomic factors have contributed to the growth of the IT outsourcing market in the UAE, and are expected to continue to drive growth in the future.

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.