IT Outsourcing Market Size is Projected to Reach USD 770.98 Billion by 2032, Growing at a CAGR of 9.3%: Straits Research
New York, United States, Aug. 13, 2024 (GLOBE NEWSWIRE) -- As per the Latest Report by Straits Research, The global IT outsourcing market size was valued at USD 342.60 billion in 2023. It is estimated to reach USD 770.98 billion by 2032, growing at a CAGR of 9.3% during the forecast period (2024–2032).
IT outsourcing is the usage of service providers externally to effectively deliver IT-enabled business processes, application services, and infrastructure solutions for business outcomes. IT has become a competitive edge for most organizations. IT Outsourcing has become more than a simple cost reduction technique with the cloud migrations and options of cloud services. Several studies have suggested that Application Development and Maintenance have become the most commonly outsourced functions amidst the partial IT outsourcing trends.
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Demand for Scalable Option, Differentiation, and Adoption of Cloud Surging Market
The future technology adoption plans hover around the adoption of emerging technologies that are predicted to grow exponentially as businesses look to replace outdated infrastructure. Public cloud giants like Google and AW; require on-demand, dynamic, enormous scalability needs. The adoption of 5G is expected to lead to the demand for efficient and scalable network infrastructure in the near future. Also, AI, IoT, and robotic process automation are transforming the customer experience across fintech sectors, enabling the preference for scalable IT infrastructure in the wake of increased P2P transfers and global payments, use of contactless bank cards, and management of cryptocurrency via digital channels. This adoption of software development outsourcing and cloud services has emerged as a viable option for small-scale organizations that want to scale by adding newer customers.
For small or medium-sized businesses, the availability of highly trained technicians is easier with IT operations outsourcing. By employing multiple dedicated IT professionals, the larger companies cannot always find technology generalists to leverage upgraded network maintenance and security. From being a cost reduction tool to a key strategic player, digital transformations and organizations turning to AI, RPA, Cloud, and IoT have opened up the role of IT outsourcing. As a result, enterprises have moved from just focusing on core competencies and leveraging IT as a competitive edge. Managed IT, and service providers, with large teams having trained specialists to address impossible situations. Outsourcing software applications has fastened the time-to-market for companies who do not have a tech background as a core competency.
While focusing on more flexible, tailorable, and evolution-friendly solutions, cloud migration, and adoption of software has made outsourcing customers divert resources from low-value assets to specialized employees. More flexible and asset-free IT services are available on an on-demand basis with the rise of cloud-based services. On the other hand, cloud computing has led to a fundamental shift in how companies pay for and access IT services. Companies that are looking forward to outsourcing cloud services have considered cost optimization as a significant aspect. Therefore, multi-cloud strategies have been gaining momentum and allowing multiple providers in order to reduce concentration risk.
Regional Analysis
Asia-Pacific will hold the largest market share during the forecast period due to cost factors and talented skill pool. The Asia-Pacific IT outsourcing market was valued at USD 214 billion in 2021 and is expected to be valued at USD 349 billion by 2030 at a CAGR of 6%. North America will account for the second-largest market share and was valued at USD 172 billion in 2021, owing to the cost-cutting, expansion of footprint, and adoption of cloud, RPA, and AI transitioning.
Europe will witness steady growth, with the UK occupying the majority of market value. The business transformation and improvement of service quality are driving the market. Latin America and Middle East Africa will account for a competitively lower growth owing to the developing economy.
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Key Highlights
- The global IT outsourcing market size was valued at USD 342.60 billion in 2023. It is estimated to reach USD 770.98 billion by 2032, growing at a CAGR of 9.3% during the forecast period (2024–2032).
- Based on the size of the organization, the large enterprise is the major shareholder in the global IT outsourcing market. The global market for large enterprises is projected to generate USD 488 billion in 2030 and grow at a CAGR of 5% by 2030.
- End-user vertical-wise, BFSI is the largest market holder. The global market for BFSI is projected to generate USD 226 billion in 2030 and grow at a CAGR of 5% by 2030.
- Geographically, the market is divided into North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa. The market in Asia-Pacific is anticipated to generate USD 349 billion and grow at a CAGR of 6% during the forecast period.
Competitive Players
- IBM Global Services
- Accenture
- Cognizant
- Infosys
- Tata Consultancy Services (TCS)
- Wipro
- HCL Technologies
- DXC Technology
- Capgemini
- NTT Data
- LTI (L&T Infotech)
- Tech Mahindra
- UST Global
- EPAM Systems
- Atos
- Syntel
- Mindtree
- CGI
- Hexaware Technologies
- WNS Global Services
- Others
Recent Developments
- In March 2021, Capgemini announced a five-year agreement with the Metropolitan Police Service (MPS), the UK’s largest police service, to become its strategic IT infrastructure services provider.
- In March 2021, SCC AVS partnered with Utelogy to enhance the management, monitoring, and control of video-enabled workplace software solutions.
- In March 2021, TCS launched a new version of its Data and Analytics Target Operating Model, which allows customers to evaluate the data and analytics and further leverage it to get business transformation outcomes with Microsoft Azure.
- In February 2021, WNS announced that they deployed a custom intelligent automation solution in collaboration with Automation Anywhere to equip Virgin Atlantic to process the sudden spike in COVID-19-related refund requests with speed and efficiency while maintaining customer service standards.
- In November 2022, Cognizant has been selected by VodafoneZiggo, a leading provider of communication and entertainment services in the Netherlands, as its managed services partner. This partnership aims to consolidate and support VodafoneZiggo's IT and virtualized mobile network infrastructure operations. The goal is to improve the reliability and availability of communication services through proactive infrastructure monitoring, more precise planning, and expedited deployment of new services to their extensive customer base of over five million consumers and businesses in the Netherlands.
Segmentation
- By Service Type
-
- Application Development And Maintenance
- Infrastructure Management Services
- Quality Assurance And Testing
- Cybersecurity Services
- Cloud Services
- Data Analytics And Business Intelligence
- Enterprise Resource Planning (ERP) Services
- Mobility Solutions
- Artificial Intelligence (AI) And Machine Learning Services
- Others
- By Location
-
- Offshore
- Onshore
- By Organization Size
-
- Small and medium enterprises
- Large enterprises
- By End-User Vertical
- BFSI
- Healthcare
- Media & Telecommunications
- Retail & E-commerce
- Transportation and Logistics
- Manufacturing
- Energy and Utilities
- Others
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About Straits Research Pvt. Ltd.
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