IT Outsourcing Industry - Statistics & Facts

Information technology outsourcing, or ITO, is the use of service providers for delivering IT-reliant business processes, application services, and infrastructure solutions. Outsourcing in more general terms means the contracting of portions of work to outside suppliers, usually in an effort to reduce costs. Services such as cloud computing and its sub-segments, such as Software as a Service (SaaS), are adjacent services but are considered to be part of the core service of IT outsourcing.

Figures for the market size of IT outsourcing vary depending on how the source defines “outsourcing” and what kind of industries, services, and segments are included. According to the Information Services Group, when focusing on contracts with a total value of more than 25 million U.S. dollars, the annual global revenue from information technology outsourcing is estimated to amount to between 60 and 70 billion U.S. dollars. An estimate by Forrester Research sees global business and government spending for IT outsourcing and hardware maintenance at about 503 billion U.S. dollars in 2017. This estimate includes spending on networks, application outsourcing, infrastructure outsourcing, hosting, computer hardware support services, application management, and infrastructure cloud services.

Overall, the market size for IT outsourcing is expected to shrink over the next few years as cost-savings are achieved by enterprises moving to less expensive cloud environments. However, individual segments and markets, such as cloud computing or IT healthcare outsourcing, are projected to grow. Revenue of the global cloud infrastructure as a service (IaaS) market is forecast to grow from just 717 million U.S. dollars in 2010 to 26 billion U.S. dollars by 2020, at a CAGR of 43.2 percent in the ten year period.

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