Ahmed Sherif
Research expert covering IT services and gaming hardware
IT outsourcing industry - statistics & facts
Information technology outsourcing (ITO) involves using service providers to deliver IT-reliant business processes, application services, and infrastructure solutions. In other words, outsourcing refers to contracting portions of work - that may typically be performed internally - to outside suppliers or service providers. Professional services organizations primarily sell technology or IT consulting, making information technology outsourcing the largest share of the industry.
Outsourced IT services vary from programming and application development to technical support. In fact, it is possible to outsource entire IT departments, often to large companies, allowing organizations to reduce operational costs and focus on their core tasks.
With a market size valued at over 31 billion U.S. dollars in 2023, the managed security services market can also be segmented into different deployment types (on-premises and cloud), managed security service providers (MSSPs), and end-user verticals. Generally, MSSPs provide managed security services tailored to their customers' information technology (IT) infrastructure.
Automation is also among the trends shaping the IT outsourcing landscape because of its ability to supplement or replace traditional outsourcing services. IT automation technology was the most popular IT trend implemented in North American and European organizations. Advancements in chatbots, artificial intelligence (AI), and machine learning have improved workflow productivity and error prevention.
Outsourced IT services vary from programming and application development to technical support. In fact, it is possible to outsource entire IT departments, often to large companies, allowing organizations to reduce operational costs and focus on their core tasks.
Market size and segments
Figures estimating the market size of IT outsourcing vary depending on how particular sources define “outsourcing” and the type of industries, services, and segments included. Statista's Technology Market Insights divides the IT outsourcing industry into administration outsourcing, application outsourcing, web hosting, and other IT outsourcing. In total, these segments accounted for a combined revenue of over 460 billion U.S. dollars in 2023. Importantly, services such as cloud computing and its sub-segments, such as software as a service (SaaS), are adjacent services but are considered part of the core service of IT outsourcing.Managed Services
Managed services, a key component of IT outsourcing, refers to the practice of outsourcing the entire responsibility of certain IT functions to specialized Managed Service Providers (MSPs). MSPs offer comprehensive and proactive management of IT infrastructure while general IT outsourcing is more about subcontracting specific IT functions. The scope of managed services can range from IT infrastructure and network management, cybersecurity, data backup, and cloud services among other IT needs.With a market size valued at over 31 billion U.S. dollars in 2023, the managed security services market can also be segmented into different deployment types (on-premises and cloud), managed security service providers (MSSPs), and end-user verticals. Generally, MSSPs provide managed security services tailored to their customers' information technology (IT) infrastructure.
Everything as a service and the future of IT outsourcing
There is no doubt that digital transformation efforts accelerate IT outsourcing. A major aspect of this is cloud computing, with market segments like infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS) that provide some of the IT outsourcing services more conveniently and at a lower cost. Accordingly, the total contract value of the global “as-a-service” market has now exceeded several tens of billion U.S. dollars annually.Automation is also among the trends shaping the IT outsourcing landscape because of its ability to supplement or replace traditional outsourcing services. IT automation technology was the most popular IT trend implemented in North American and European organizations. Advancements in chatbots, artificial intelligence (AI), and machine learning have improved workflow productivity and error prevention.
