IT Services Outsourcing Market Outlook
The global IT services outsourcing market size was valued at USD 525 Billion in 2022 and is likely reach to USD 1.06 Trillion by 2031, expanding at a CAGR of 8.2% during the forecast period, 2023–2031. The growth of the market is attributed to escalating demand of consultancy related projects and outsourcing of IT services, which substantially reduces business operational costs of company.
IT outsourcing refers to the use of external service provider to efficiently and effectively deliver IT-enabled business process, infrastructure solution for business outcomes, and application service.
It is a service related to technical expertise that enable organizations to access, manage, optimize, and create insightful business information as well as effective processes. Outsourced service provider also provides data backup and restoration services as a part of the service provided by internal IT organization or external service provider.
The COVID-19 pandemic outbreak has brought positive impact on the market due to increased digital adoption by IT companies. As companies are reorganizing business strategies to upgrade tech solutions leading to outsourcing the services to achieve this faster.
Additionally, workplace transformation from office working to remote working lead to outsourcing the services, which are specifically designed for remote business.
Market Trends, Drivers, Restraints, and Opportunities
- Rising caution about data safety and customer-centricity in projects by business organizations is a key factor driving the market growth.
- Increasing trend for outsourcing of tedious and time-consuming tasks to service providers allows to focus on organizations core function and reduces the work load on their internal resources. This is projected to drive the market expansion during the forecast period.
- Increasing count of global in-house centers of companies is a key restraining factor. This is expected to hamper the market growth during the projected timeline.
- Rising security issues while outsourcing to third party service provider acts as a major challenge that can restrict the market growth.
- Offering cloud-based services to organizations and advancement of technology in It services are projected to create significant growth opportunities for the market.
Scope of IT Services Outsourcing Market Report
The report on the global IT services outsourcing market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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IT Services Outsourcing Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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End-Users (Retail & E-commerce, BFSI, Telecom & Media, Aerospace & Defense, Healthcare, and Others), Services (Managed Security Operations, Helpdesk Services, Emerging Technology Services, Network Operations, Infrastructure Capacity Services, Data Center Operations, Application Services, and Others), and Locations (Off-shore and On-shore)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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IBM Corp.; Hewlett Packard Enterprise Development LP; Cognizant; NTT Data Corp.; Accenture PLC; Fujitsu Limited; SAP SE Corp.; Infosys Limited; Oracle Corp.; and Capgemini
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IT Services Outsourcing Market Segment Insights
BFSI segment is expected to grow at a rapid pace
Based on end-users, the global IT services outsourcing market is divided into retail & E-commerce, BFSI, telecom & media, aerospace & defense, healthcare, and others. The BFSI segment is expected to grow at a rapid pace during the forecast period attributed to its escalating investment in cyber security, automation, and Artificial Intelligence-based conversational systems.
However, the healthcare segment is anticipated to expand at a substantial CAGR during the forecast period due to increasing demand of customized software from healthcare providers.
Additionally, digital management of healthcare information is important in the healthcare sector and various players outsourcing their IT solutions and services to the healthcare sector to ensure safety of data and information related to patients.
Infrastructure capacity services segment to expand at a considerable CAGR
In terms of services, the market is segregated into managed security operations, helpdesk services, emerging technology services, network operations, infrastructure capacity services, data center operations, application services, and others.
The managed security operations segment is expected to account for a major market share during the projected timeline owing to rise in demand for threat management, vigilance of data security, and governance & compliance.
On the other hand, the infrastructure capacity service segment is projected to expand at a considerable CAGR during the projected period due to rapid deployment of cloud computing, infrastructure design & implementation, and remote infrastructure management to organizations.
Off-shore segment to account for a significant market share.
On the basis of locations, the global IT services outsourcing market is bifurcated into off-shore and on-shore. The off-shore segment is expected to account for a significant market share during the forecast period owing to wide requirement of off-shoring IT operations for emerging economies.
Off-shore operations provides several advantages such as availing cost benefits, fulfillment of offset obligations, and mitigation of currency risks.
However, the on-shore segment is anticipated to register a substantial growth rate during the projected timeline owing to reduction in indirect costs of quality lapse, security & intellectual property risks, and communication gap risks.
IT Services Outsourcing Market Regional Outlook
North America is anticipated to constitute a key market share
In terms of region, the market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to constitute a key share of the market during the projected period owing to fast and early adoption of new technologies and expansion of IT sector in the region.
However, the Asia Pacific market is anticipated to expand at a rapid pace during the forecast period due to rising partnerships in IT service providers and business in several countries of the region.
Segments
End-Users
- Retail & E-commerce
- BFSI
- Telecom & Media
- Aerospace & Defense
- Healthcare
- Others
Services
- Managed Security Operations
- Helpdesk Services
- Emerging Technology Services
- Network Operations
- Infrastructure Capacity Services
- Data Center Operations
- Application Services
- Others
Locations
Regions
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
Competitive Landscape
Key players competing in the global IT services outsourcing market are IBM Corp.; Hewlett Packard Enterprise Development LP; Cognizant; NTT Data Corp.; Accenture PLC; Fujitsu Limited; SAP SE Corp.; Infosys Limited; Oracle Corp.; and Capgemini.
Companies are now focusing on quality of service, cost effectiveness, and innovations in their services to enhance their competitive position in the market. In February 2021, VMware and Accenture PLC announced to set up a dedicated business group that aimed at helping business to adopt cloud-first strategy and expanded their partnership.
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